HDTV makers want consumers to do their homework

Amid big changes in a maturing industry, TV manufacturers say they must focus on teaching consumers the true meaning of "high definition."

UNIVERSAL CITY, Calif.--To borrow from the real estate cliche, selling the "HD experience" is about education, education, education, according to the top-tier TV manufacturers.

Mainstream consumers, apparently, still don't quite get it, and the blame falls squarely on the shoulders of TV manufacturers, according to Randy Waynick, senior vice president of marketing for Sony's home products division.

Manufacturers such as Vizio have come out of nowhere to take away market share. Vizio

"In the past year, if we were to grade ourselves, we were barely passing as an industry," he told an audience at the DisplaySearch HDTV conference here. Citing a study by Best Buy, 40 percent of consumers that own already own high-definition televisions don't know they need HD channel services or HD movies to take advantage of their TV's high resolution, he said.

While Sony sounds upset on behalf of their customers not getting the full HD experience, it's quite likely that they would be mollified if the general public were purchasing HD camcorders and Blu-ray Disc players en masse. And, of course, more TVs. Sony had a bit of a wake-up call earlier this year when some no-name TV manufacturers--Vizio and others--came out of nowhere to eat way into Sony's market share. The change is rooted in the club store model that Vizio has used to its advantage.

"There was a shift from traditional consumer electronics and A/V retailers to warehouses, clubs and mass merchants," said Edward Taylor, vice president of TV market research for DisplaySearch. "Now the retail market is shifting--clubs have low-risk return policies, and much lower channel margin they operate on, (which) ends up in lower prices for consumers. Vizio, Funai and Polaroid have exploited that successfully."

It also helps that, according to DisplaySearch data, a 42-inch 1080p LCD TV from Vizio is 20 percent to 30 percent cheaper than the same TV from other manufacturers. Sony, for its part, says it's determined not to play that game.

The flat-panel TV industry is "in a race to see how fast we can take the price points down," said Waynick, leaving it in a "sad state." Value, he pressed, is determined by more than price point. "We play differently, and we take a lot of hits for it sometimes because we want to provide a better value." It should be noted, of course, that Sony has already started to rebound since dropping to sixth place among LCD makers during the second quarter. Its market share is up a few points to 21.6 percent now, DisplaySearch said.

Though it's successfully played the underdog in its battle for brand-name recognition, Vizio's director of marketing Jeff Schindler agreed with Sony, saying that his company would also like for consumers to have a better understanding of the nuances of high-def TV watching, particularly in the area of plasma versus LCD, he said.

Another TV maker that hopes change is in the wings is Mitsubishi, which is on the verge of releasing the very first laser-based television. The long awaited rear-projection TV technology will finally arrive at CES in January, said Frank DeMartin, vice president of marketing for Mitsubishi. At the same time, Mitsubishi wants to use laser to create "a whole new category" of large-screen TV, starting with the preferred nomenclature. "'Rear projection,' I really hope we lose that as an industry going forward. 'Microdisplay' is not much better," he said.

That's likely because the prognosis for rear-projection TVs is not good, thanks to the success of LCD and plasma. DisplaySearch projects that there will be fewer than 100,000 rear-projection units selling in 2011, down from 1.6 million units this year.

Lucky for Mitsubishi, even if rear-projection isn't what consumers go shopping for when looking to buy a TV, the large size could potentially catch their eye. DisplaySearch data predicts that 50-inch and larger size TVs will be the biggest growth category in the next five years.

About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.

 

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