TI, the third-biggest chipmaker in the world, is aggressively working with TV manufacturers, bureaucrats, producers and movie theaters to promoteprogramming and technology, with a particular emphasis on dropping the cost of HDTV sets and building digital cinemas.
"We're working with our customers to move the price (of HDTV sets) to $1,000," Texas Instruments CEO Rich Templeton said in a meeting with reporters at the tail end of the in Las Vegas. "This is the year of HDTV."
TI's interest in high-definition entertainment stems from its, a line of chips used in rear-projection TVs and projectors. In DLPs, transistors manipulate thousands of tiny mirrors to create an image that then appears on-screen (there are HD DLP TVs and DLP TVs for regular programming).
While TI chips are now found in roughly 16 percent of HDTVs sold, DLP-based TVs are currently targeted to a somewhat limited market. DLP-based TVs typically start at more than $2,000 (though projection TVs with alternative technology can be had for $1,000 and HD sets can be bought for $1,300 or more). Most DLP chips produced today get incorporated into projectors sold to office buildings.
Moreover, rear-projection TVs take up more room than John Madden: The screen diameter typically starts at 40 inches, and the back of the TV can sometimes run 30 inches deep. As a result, most manufacturers only try to sell them in the United States, skipping regions such as Japan and Europe, wherearen't the norm. LCD TV manufacturers are gobbling up the growth in the under-40-inch market.
To cut costs, TI has been working with manufacturers of other components, such as light sources and lenses, to reduce the cost of parts that go into projection TVs.
"DLP TV will be the most cost-effective delivery vehicle for high-definition TV," Templeton said.
The bulk issue is being hammered out, as well, with smaller-diameter TV sets likely on the way for people who don't want to rearrange their cabinets or furniture, Templeton said.
Thinner DLP TVs have already begun to arrive. At CES, TCL-Thomson Electronics showed off an RCA Scenium TV that measures only 7 inches deep. The reduction in size was accomplished by blowing up the TV images through multiple magnification steps, rather than one, said John Van Scoter, senior vice president of Texas Instruments and general manager of DLP Products.
Analysts are mixed on whether DLPs, and projection TVs in general, can begin to cut into the base for LCD TVs or plasma, although the public so far seems to like projection-style TVs. "There has been a question of whether DLP can move up in resolution with other technologies, but given the acceleration in shipments, it seems to be doing well," Kim Allen, an analyst at iSuppli, said in a recent interview.
For digital cinema, TI is working with producers and film distributors to reduce the cost of retrofitting existing movie theaters for digital. Typically, the procedure costs about $100,000 to $150,000, depending on the theater. Movie exhibitors, however, don't want to incur the capital costs. One proposal on the table is to have film producers charge theaters an incremental fee for existing movies and bank those fees into a retrofit fund, Scoter said.
Although it's uncertain who will fund the retrofits, film producers assert that the conversion is essential.
"The experience of digital cinema is unparalled. For this business to stay robust, exhibition must be better," said Jeffrey Katzenberg, a founder of DreamWorks Animation who joined Templeton during a presentation at the show. (As an aside, Katzenberg noted that the cost of computer-animated movies hasn't increased for six years, meaning that the cost savings achieved from technology have offset rising personnel costs).
TI is also trying to convince the Federal Communications Commission to set a firm deadline for the conversion from standard-broadcast TV to HDTV. While this would force analog viewers to upgrade their sets, Templeton said consumers would end up with a better viewing experience. It could also potentially help U.S. industry, he asserted. Executives from Europe and China often mention the lead the United States has already carved out in this area, and HD will expand outside the home and onto phones. Among others, TI will come out with a chip, code-named Hollywood, for HD phones. These will begin to appear in 2007.
"The U.S. did not lead in broadband," Templeton said. "We have an opportunity to take the lead in high-definition TV and the broadcast signal. It will be a painful transition, as any, but it will be beneficial for more reasons than not."
Currently, there are about 5,000 hours of HD broadcasts per week, and the upcoming Super Bowl will be broadcast in HD.