High Definition television – The perfect picture

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The industry is riding the HD wave, with TV manufacturers and HD service providers working in tandem to satisfy customers’ huger for increasingly larger TV panels with life-like picture clarity. George Cole analyses the market.
Today’s consumers want television pictures that are larger, brighter and clearer. The arrival of DVD and now blue laser formats like Blu-ray Disc and HD-DVD are driving the demand for HD Ready sets that offer amazing clarity. Last year (2007) saw a number of major developments in the HDTV market: BSkyB added more HD channels to its service; the BBC got the go-ahead for an HD channel; Channel 4 launched an HD service and it looks like Freeview viewers could be receiving an HD service by the 2012 Olympics. Then there was the hardware; HD ready sets continued to fall in price, while cheaper Blu-ray and HD-DVD players entered the market. Sales of HD camcorders are also growing, albeit more slowly than HD-ready sets.
The picture of the market
So how have manufacturers responded to market conditions and how has their HD line-up evolved? Graham North, Humax’s commercial director, says “We will continue to develop our large screen range, which already includes 32 and 40in LCD models, and plan to introduce new sizes that will include 1080p screens. However, 1080p  has not achieved a position as the industry standard and will continue to be restricted to the larger screen sizes for the foreseeable future.” North adds that Humax is focusing on the development of feature-rich LCD TVs with integrated digital TV receivers and built-in digital TV recorders. “Virtually all Flat Panel TVs (26in plus) sold today are HD ready and hence the HD market is very healthy. There is also a significant increase in the number of Full HD products available to the consumer in screen sizes from 37in and upwards,” says Daryl Street, Hitachi’s general manager, UK sales.
Rob Bond, Philips’ flat TV business manager, says: “The market is moving towards larger panels. There are three reasons for this: consumer demand – people want larger screens; the old CRT standard size of 28in is now 32in and moving to 40-42in. The second reason is that the industry is able to produce larger panels on a more economic scale, and third, the availability of HD content means consumers can see what a better picture you get with HD.” Panasonic has seven full HD and seven HD-ready plasma TVs in its current range, with screen sizes from 37 to 103in. It has also launched a 37in Full HD LCD TV and also has six HD ready LCD TVs in its line-up, ranging from 26 to 32in. “Sales of 1080p sets have increased and represent more than 20% of the 37in plus screen size market,” notes Fabrice Estornel, Panasonic’s plasma TV product manager.
Sharp’s HD ready line-up ranges from 32 to 65in, including several models with the option of 100Hz technology. Tommaso Monetto, Sharp’s LCD product manager, notes that: “In Japan and the US, we’ve launched 22 and 26in  full HD screens, which is quite a step forward. Until now, it’s all been about bigger screens.” The compact HD screens are aimed at PC users, not least because more and more PCs are coming with Blu-ray and HD-DVD drives. David Brewis, Sony’s TV product manager, says that Sony’s BRAVIA range continues to expand in the 40in and above segment with 1080p LCD TV technology, whilst maintaining a strong core of smaller screen models across 20, 26 and 32in. “Into 2008, we expect all screen sizes to continue to grow on a volume basis, but the larger screen segments at a faster rate,” he says.
Rob Shaw, Samsung’s senior CTV product manager, says that during the second half of 2007, Samsung had focused more on 1080p panels, with the launch of step-up LCD 1080p panels. “Generally speaking, UK consumers are slowly moving towards larger screens so naturally our focus is leaning towards this, but there is still very much a market for smaller screen sizes, especially with the digital switchover,” he adds. Like Panasonic, Samsung continues to offer both LCD and Plasma sets. Hitachi is another company that still markets both types of flat panel sets. “Both technologies are selling well but LCD is taking an increasingly larger share of the market,” says Hitachi’s Street, “This is mainly due to the fact that LCD is the only choice in smaller screen sizes and there are now fewer manufacturers supplying Plasma products. Plasma is still the popular choice in the large screen sizes for the more discerning consumer.”
George Mead, LG’s marketing manager, says his company is focusing on producing larger screen sets in response to the increased demand for the large screen cinematic experience, and 2008 will see the introduction of 52in 1080p LCD TV from the company. Mead is convinced that 1080p will become the industry standard, but notes that: “Industry research shows the majority of consumers are still not aware that to watch high definition they still require an HD source. With this in mind, HD-ready (720p) still has a big part to play in the HD product line-up and will for the next two years.”
The HD service provision
The announcement by Ofcom that spectrum could be put aside for HDTV broadcasts on Freeview is a boost to the HD market, although some are cautious about developments. “It’ll be a good thing if they can get the bandwidth. It’s a positive step because a lot of people are buying for the future,” says Sharp’s Monetto. “This is still dependent on Ofcom’s decision, but it will be a good thing to keep buoyancy in the market,” adds Shaw. “For consumers it will be superb if they can watch high definition TV for free,” says LG Mead, “Other European countries have this service already.  As a TV manufacturer, this is very important to us, as it allows consumers to see the real benefits of the high quality products that we’re making. We believe the government could be doing more to support HDTV on the Freeview platform by allocating available bandwidth from the digital switchover to allow for a greater selection of HD channels. We will almost certainly all be watching the Olympics in high definition whether we pay subscription or not. ” Sony’s Brewis is also cautiously optimistic: “We are happy with the prospect of HD on DTT, but Sony believes that adopting additional spectrum from the digital dividend would be a more consumer friendly solution because the legacy sets in the market.”
Hitachi’s Street says that the Freesat service (expected to launch in the spring) should see many public broadcasters presenting an HD offering on the service. Humax is planning to launch a range of HD satellite products in readiness for the arrival of Freesat. Humax’s North, adds that his company is also preparing for another development – DVBT2, which uses advanced compression technology. This standard is likely to be ready in time for the 2012 Olympics and so a new range of products supporting this format will arrive.
The hardware developments
Many sets are offering 24p compatibility, which Panasonic’s Estornel says is important because: “Our products appeal to enthusiasts and early adopters.  These are the sort of people likely to buy products that output 24p.” Samsung’s Shaw adds: “All our current step-up range and future 1080p ranges have 24p compatibility. We believe this to be a very important function as we continue to link Blu-ray with the ultimate 1080p experience. Studio films in 24p can therefore be viewed in their natural state.” Sharp’s Monetto also thinks that 24p compatibility matters: “The real movie enthusiast wants to watch Blu-ray in its original state to get that cinematic effect.”
Everyone expects sales of 1080p sets to continue to grow. “HD technology in 2008 will continue to evolve, with more focus on 1080p and picture enhancement systems such as BRAVIA Engine,” says Sony’s Brewis. Philips’ Bond also thinks that picture enhancement systems are important. “Picture quality is not just driven by the panel but the chassis – the software that’s in the television. That’s why we developed technologies such as Pixel Plus and the Perfect Pixel Plus HD engine, which ensure that consumers continue to get the best picture quality possible.”
HD content
A good supply of HD content will drive consumers to HD ready sets, so is there enough out there? Sharp’s Monetto observes that: “If you walk through Blockbuster now, you’ll see a huge selection of Blu-ray and HD-DVD titles. PS3 owners are automatically getting HD content and that’s driving the request for more movies. SkyHD and other satellite operators have limited content but that will grow over time. PCs and camcorders can display or output in HD – the material is out there.” Humax’s North thinks: “There is not enough HD content in the market today. Sky currently offers the best choice to viewers. However, the launch of Freesat next year promises to offer even more choice for the consumer, who is crying out for the opportunity to easily access and enjoy HD programming.” 
Panasonic’s Estornel is fairly happy with the supply of HD content: “Consumers now have a lot more access to full HD content:  Blu-ray players becoming widely available, film studios are producing more movies in HD, gaming is available in HD,  plus more and more TV programmes are now being filmed in HD,” he says. Hitachi’s Street also believes the content is out there: “There is substantial HD programme material from Sky and it’s not just football. There is a varied mix of movies, dramas and additional sporting  events including football. There’s also much HD output on the BBC channel and Channel 4 has announced that it too will carry HD output via Sky. Add to this Blu-ray and HD DVD discs and games, and consumers have a wide and varied selection of HD output to enhance their viewing pleasure.” 
Price erosion
But Samsung’s Shaw feels that content is slowly emerging, although he thinks HD on Freeview will boost HD content development. LG’s Mead says: “Blu-ray, HD-DVD and video gaming titles are increasing, making pre-recorded content more widely available. The price of these next generation players is also decreasing, making them more accessible to consumers.” Sony’s Brewis points out that: “There could always be more HD content out there, but we shouldn’t lose sight of other key factors in consumers’ buying decisions, such as design. The market remains dynamic from a pricing perspective across all segments, with no-brands competing more successfully in the smaller screen sizes.”
But as screen sizes have increased, margins have decreased. As Philips’ Bond points out: “The market has experienced pretty severe price erosion.” The key, adds Bond, is to offer something that differentiates your product from the rest and in the case of Philips that means technologies like Ambilight. Sharp’s Monetto says that price erosion at the high end (37in and above) has been around 30-40%. The smaller end of the market has not been so affected, although packages have been affected. On a brighter note, Monetto adds that because HD-ready sets are a considered purchase, most consumers prefer to buy a recognised brand.
Humax’s North says: “Pricing has continued to fall for HD-ready products, however the panel prices have hardened and so we do not expect to see such dramatic falls in overall costs in 2008. No-brands are starting to come into the market, mainly through the mass merchandisers and this in turn is having an effect on pricing. This is why we are always looking to introduce feature-rich products, such as TVs with built-in digital recorders.” Hitachi’s Street agrees that prices are continuing to fall, but adds, “As Full HD and screen sizes bigger than 32in become more popular, manufacturers are able to add value to the average prices.” LG’s Mead says: “Price pressure in the large screen TV market especially has decreased up to 60% in certain screen sizes in the last twelve months, but good technology and design are attracting consumers to premier brands.”

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