Blu-ray Awareness Picking Up

As more and more consumers in the U.S. are jumping on the HDTV bandwagon (especially in wake of the country's transition to digital TV), the familiarity with Blu-ray is also increasing. The NPD Group reports that awareness in the technology has jumped 10% in the past year, from 35% to 45% of HDTV owners. Despite this, only 6% said they would buy a Blu-ray device in the next 6 months (9% for existing HDTV owners).

"With HDTVs now in approximately 40 million U.S. households, that percentage translates to a pool of almost 4 million potential BD player buyers," said Russ Crupnick, Entertainment Industry Analyst for NPD.

The study reiterates what many others have said over the past few months: that customers are still quite happy with their standard-definition DVD players. However, as the life-cycle of these devices come to an end, it's safe to assume that many of those looking for a replacement will invest in a Blu-ray player rather than another standard DVD product. This will rely, of course, on the hope that, by then, the pricing of both Blu-ray hardware and software comes down to a point that the average consumer deems the technology an "acceptable" alternative.

In the meantime, what can retailers and manufacturers do to help ramp up interest in the category? The first recommendation is obvious: demonstrate the benefits of Blu-ray over standard-def fare in your store via a side-by-side comparison. What would make most sense is to do so with an upconverting standard DVD player rather than an old, $50 model: using the latter will only convince the customer that you think he's an idiot. Any consumer that's really interested in getting the best picture quality will need to be convinced that Blu-ray is better than a higher-end upconverting player.

The second recommendation is to offer incentives. People love free stuff, so to include a Blu-ray movie or two with the purchase of a Blu-ray player, or, in the retailer's case, to offer in-store promotions, could help bring attention toward the product category.

Third, make the products easy to use, and tout those features. Consumers that are interested in high-quality video but aren't exactly technophiles, might worry that a Blu-ray player is too complex for them to understand how to use. Show them that this isn't the case.

Finally, carefully outline what is required to fully enjoy a Blu-ray player (i.e. an HDTV and Blu-ray discs; not to mention a favourable audio system) so that your customer doesn't go home disappointed. More important, explain what he can't use one for (e.g. to play old HD DVDs!)

Over time, Blu-ray can make it to become the Compact Disc (or should I say digital download?) of the video world.

U.S. Digital TV Transition Rife with Confusion

A new study by Consumer Reports finds that almost three-quarters of American citizens have misconceptions about the impact of the transition to digital TV one year from now; while a third are completely unaware of it.

"Confusion about the digital television transition will cost consumers a lot of money for equipment they may not want or need," said Joel Kelsey, a policy analyst for Consumers Union, the non-profit publisher of Consumer Reports. "Based on these survey results, it is now clear that our government and every media company that profits from consumers watching television must do whatever it takes to help consumers keep getting broadcast TV, without paying a dime more than necessary."

I'd be surprised if this transition occurs without a hitch, and especially without a consumer having to pay "a dime more than necessary". The study discovered that 61% of those who would be affected think they won't be; while about 33% who won't be affected are ready to head out and purchase either a converter box or new TV even though they don't need one.

U.S. CE retailers really should expect a flood of consumers coming in last minute to purchase required equipment; and conversely, another flood arriving to return equipment that they realize they don't actually need. Will they change return policies during that time? Hmm....

Anyway, for the U.S. readers out there, here's the skinny on the transition:

1) You DO NOT need to shove your old analog TV in the dumpster. If you have an analog TV and are viewing free, over-the-air programming, you might just need to connect it to a digital converter box, or subscribe to a cable or satellite service provider.

2) Only analog sets that view free, over-the-air programming, will no longer be able to access programming as of February 2009 because all analog broadcasts will cease to exist. Therefore, if you have an analog set, but subscribe to digital cable or satellite service, you shoud be OK.

3) For those who will need to purchase a converter box, the U.S. government is offering a coupon to help offset its cost. The $40 coupon can be acquired by phone, web, or mail.

4) If you decide that you want to use the digital TV transition as an opportunity to upgrade to a digital TV "just because", make sure that you dispose of any old analog TVs safely, or donate it to someone who could use it. It's just common sense.

Consumer Reports adds that the U.S. government plans to spend about US$6.5 million in public education funding on the transition; while the U.K. has budgeted $450 million. One could argue that's a lot of money to allocate to consumer education on the subject; but on the flip side, will it help avoid a major outcry once the time comes? We've got one year to find out.

Half of U.S. Consumers Now Have Digital TVs

If you have cable or satellite TV and watch any U.S. channels, you've likely seen those commercials urging customers to switch their old analog TVs to digital. The approx. one-minute commercial explains that that the Federal Communications Commission will stop all analog broadcasts by February 2009, and that as of that date, analog TVs will no longer work. Last week, the Consumer Electronics Association (CEA) noted that Americans are well on their way to this transition, with more than half of the population having made the switch to digital. The fact that mammoth retailer Best Buy stopped offering analog TVs in the U.S. in October 2007 might also have helped make the transition easier.

It's important to note that the 50% penetration of digital TVs shouldn't be confused with high-definition TV, for which penetration is likely lower. I'm not sure of the exact U.S. figures, to date but the Consumer Electronics Marketers of Canada (CEMC) projected in August 2007 that, by the end of the year, almost 48% of Canadian consumers would own an HD-capable TV.

However, as many studies and reports have noted over the past year or so, even consumers who own an HDTV-capable TV don't necessarily view high-definition programming, nor have the necessary cable or satellite TV equipment to make this possible.

With the increasingly attractive prices of flat-panel TVs today, it would make sense for customers to use those extra bucks saved on the TV itself to invest in a high-definition set-top box and channel package. If you're going to upgrade, go big, right? It looks like many U.S. consumers agree, as the CEA estimates that 79% of all digital TVs shipped in 2008 (in the U.S.)will boast high-definition resolution.

Hopefully as customers begin asking questions about digital TV, they'll also receive answers on how to fully enjoy the high-definition experience. If you aren't sure how to go about getting digital TV, take a peek at this "uninformed customer's guide" from a previous blog entry.

It's also worth noting that, the CRTC in Canada has not made a similar mandate for the transition to digital TV, and a spokesperson for Best Buy Canada told me back in October that the retailer would continue to sell analog products "as long as there is a demand for them".

Even my 60+ year-old parents have upgraded to flat-panel; and with third-tier digital TVs available at sub-$500 price points these days, it's likely that anyone upgrading at this point will opt for digital anyway.

The End of an Era: U.S. Best Buy Stores Say No More Analog TVs

According to a Reuters report, Best Buy's U.S. stores will no longer be offering analog TVs, opting for a digital-only tuner environment. Of course this goes in line with the FCC's decision to stop all analog broadcasts by February 2009.

In Canada, the CRTC has not made a similar mandate, and a spokesperson for Best Buy Canada tells me that the retailer will continue to sell analog products "as long as there is a demand for them".

Although a demand certainly still does exist, there's no telling for how long. After all, even my 60+ year old parents recently expressed to me that they'd like "one of those TVs that you can hang on the wall." Not to mention that both plasma and LCD TVs are available for reasonable prices that even the severely budget-conscious could afford.

That said, I do think it's a good move on Best Buy U.S.'s part to help push lagging customers toward digital TV.

Will the CRTC follow suit with the U.S. FCC and make similar moves for digital TV? Although the organization has taken steps to encourage the adoption of digital TV (like requesting that, by the end of this year, Canadian broadcasters offer at least two-thirds of their TV schedules in HD), there has been no specific deadlines (to my knowledge) that would absolutely ensure that this happens. Stay tuned (pun intended).