The future is highly defined

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Over the past year, there has been a concerted push to offer consumers an increasing amount of high-definition product and content. Sky now has almost 30 HD channels to choose from, and SkyHD has been joined by Freesat, which offers 140 TV and radio channels, some of which are in HD. Sony’s PS3 console includes a Blu-ray drive and prices of dedicated Blu-ray players have been falling as new features like online service BD Live are arriving. More and more Blu-ray titles are being launched.

Market drivers

Graham North, commercial director at Humax, says: “The HD market developed rapidly in 2008, with HD becoming an increasingly key factor in consumer buying decisions for TV and home entertainment products. Sky has continued to add new channels and content, developing promotions to drive uptake from both its existing subscriber base and new customers.” However, North also says that Freesat’s launch is causing disruption in the market by offering UK viewers access to a subscription-free HD service for the very first time.

Fabrice Estornel, Panasonic’s product manager, says interest in HD has increased thanks to: “The introduction of Freesat, and a larger number of HD channels available, together with the increase in sales of Blu-ray players and the increasing availability of Blu-ray discs.  Consumer awareness of HD has increased and consumers are looking for compatible HD products.”  Matt Coombe, Sony’s general manager, notes that Blu-ray sales have increased significantly: “The amount of units sold in the twelve months leading up to October 2008 show an amazing growth, for a product that only really launched this time last year. According to GfK, the Blu-ray market saw volume growth of 1360% in October 2008 in comparison with October 2007, and the latest figures that we have from October show that Sony are the market leader with 42.9% volume. The HD camcorder market has demonstrated growth in both value and volume.”

Peter Johnson, Hitachi’s product technical manager, notes that flat screen performance has improved dramatically since the first models were introduced, adding that: “We continue to push the boundaries of performance now that we have real HD content to work with. Digital connections between the source and the panels mean that we can take advantage of deeper colour and can accept a wider range of frame rates than before.” Paul Hobden, Philips’ flat TV consumer marketing director, says: “For Philips, the key area of the HD market is the flat panel TV sector, where both volume and even value have shown growth overall in the past twelve months.”

But Hobden also notes that the sector was under a lot of pressure throughout the last quarter of 2008, and this will continue into 2009, when the market will either level out or possibly go into gentle decline, “This is a combination of the current economic climate and the fact that the flat TV sector is a well established and maturing market, where most people who want a flat screen have already bought into the category,” he says.

The milestones

When it comes to choosing the most significant HD development over the past year, Sony’s Coombe, points to his company’s BDP-S350 Blu-ray player, which includes features such as 24p True Cinema, BonusView, Precision Cinema HD Upscale and BD-Live Ready. For Humax’s North it’s the launch of Freesat: “It was a huge milestone and the new digital satellite TV service quickly became the fastest growing route for TV viewers to access HD content, with sales of over 100,000 Freesat boxes and TVs just months after launch,” he says. Freesat’s HD channels can be accessed via a digital HD set-top box (entry level prices are now below £100), a Freesat HD TV recorder like Humax’s  Foxsat-HDR, or a television set with a built-in HD tuner, as offered by Panasonic.

No surprise then, that for Panasonic’s Estornel, the most significant milestone was: “The introduction of Freesat and 1080p screens. We currently have five high-definition plasma and LCD TVs in our range with Freesat built-in. This is the PZ81 series and sets are available in five screen sizes: 32, 37, 42, 46 and 50in. Our latest Blu-ray players feature BD-Live, which allows users to access the internet to download data such as images and subtitles, and to join in quizzes and multi-player interactive games that are linked to bonus movie content contained on Blu-ray disc.”

Philips’ Hobden, says a major development has been consumer expectation that 1080p HD panels are now on all sets at 37in and above: “And they are already starting to take a slice of the 32in market,” he adds: “We recently introduced the 32PFL9613D which is a high spec 32in 1080p model.  Average screen sizes have also been increasing with the 37in segment proving very successful and the 42in sector rapidly becoming very popular.”

Hodben thinks that this development has been one of the biggest drivers for HD: “Without doubt, the main driver is picture quality, which for most consumers means an enormous improvement in picture sharpness. The availability of larger screen sizes has also been important as they make the benefits of HD all the more apparent. And price erosion over the past twelve months has inevitably made the sector accessible to all.”

HD consumers

So who is buying HD product and why? Philips’ Hobden says: “In the early days of HD, the consumer would have nearly always been either a home cinema or gaming enthusiast but as the choice of available products has increased and prices have reduced, just about any consumer currently looking to buy or replace a TV will opt to buy an HD Ready or Full HD set.” Humax’s North adds: “The tech-savvy, home cinema enthusiast is the early adopter, driven by a want to be the first to experience the incredible colour, sound and crystal-clear images. Other consumers are driven by content.  For example, some UEFA Champions League, international and FA Cup matches are only available exclusively through ITV HD on Freesat, which is a big appeal to sports fans.” 

Panasonic’s Estornel identifies potential HD customers as: “People who aspire to the best picture quality available and those who do not want to pay for a HD satellite subscription service.   Also people who are currently upgrading their sets – Freesat has raised a lot of interest with consumers.”  Greater affordability of HD products is also drawing in more consumers, says Sony’s Coombe: “HD is becoming more readily available to the masses as production costs fall and more affordable propositions hit the market. Average pricing has already come down close to the £200 level.”

Wide choice

Another reason is the wide range of HD products on the market. Sony’s HD product range covers camcorders, Blu-ray players, Bravia TVs and the PS3 games console. Philips offers HD TVs and Blu-ray players, with plans to launch HD cinema systems in 2009. Humax is focusing on the digital TV recorder and HD set-top box market, while Panasonic’s HD offering encompasses flat display sets, Blu-ray players, home cinema systems, camcorders and digital cameras offering HD output. Barnaby Sykes, Panasonic’s camcorder product manager, says: “We offer the HDC-SD100, HDC-HS100, HDC-SD9 and HDC-HS9 – allowing users to capture HD images with superb detail and deep, vivid colours.”

Sharp’s HD product range includes the Aquos LC-46D6VE, which has three HDMI sockets for connecting to various HD devices, and the XS1 ultra-slim range offers 1080p performance. Sharp also offers the BD-HP21H Blu-ray player. Loewe’s Art SL set includes an integrated HDTV tuner and the company also markets the Individual Compose HD+ 100 HD cinema system, and the Blu-tech Blu-ray player. Hitachi’s HD offerings includes its range of ultra-slim LCD flat panels and the company plans to launch a media station with a wireless HDMI syst

HD content is growing

There may be plenty of HD products out there, but what will really drive consumer take up of HD is the amount of compelling content that is available. “Generally, there is not enough HD content widely available at this time,” says Humax’s North, “Sky has clearly taken the lead and has continued to expand its HD channels, however this is only available to subscribers who wish to pay for it. For those who don’t want to commit to a monthly subscription the choice is more limited, but HD content on free-to-air services is already growing and will continue to expand in 2009.”

Philips’ Hobden says: “The availability of HD content is good and consistently getting stronger but the key issue remains the relative cost between the HD to the SD version.” In the packaged media market, the cost of a Blu-ray title can be two or three times that of a DVD version. Hobden adds that there is now an enormous and growing pool of consumers who have bought HD Ready or Full HD sets, and once the price of content falls, consumers will become more regular HD users. Sony’s Coombe notes that: “Blu-ray Disc has received wide industry support, ensuring that an increasingly wide variety of Blu-ray titles are becoming available. High street entertainment retailers like HMV is now dedicating large sections, front-of-store to the display of movie titles, with multi-buy offers.” Panasonic’s Erstonel says: “There are a wide range of HD programmes available across all BBC and ITV channels plus more and more Blu-ray titles are becoming available in many retail outlets.”

Looking ahead

There is much optimism about HD’s future prospects, although Philips’ Hobden, warns that: “The market for flat TVs came under enormous pressure throughout the last quarter of 2008, a situation which will continue into 2009, when the market will either level out or possibly go into gentle decline.”

Panasonic’s Estornel says:  “We can expect an even larger percentage of TV sales to be 1080p models, thanks to the increased sales of Blu-ray and a larger number of HD channels available to the public from Pay TV or Freesat.” Humax’s North is also upbeat about HD’s prospects: “HD is here to stay and the market is likely to continue to expand considerably. Freesat will continue to grow rapidly and Ofcom has recently confirmed HD over Freeview will be available from 2009. It may take some time for HD to become mainstream in the UK, but I do believe it will become the de facto standard, just as colour broadcasts replaced black and white TV.”

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