Turn TVs into a simple system
15 June 2009
A few weeks ago I talked about the ‘search for the killer app’, and it has been obvious for some time that the digital TV market has been created as such an app. It has been a strong market for several year, but what potential does it offer the UK electronics market?
Barely a murmur when the first region switched over from analogue to digital broadcast, but then that region was the small Cumbrian town of Whitehaven. The next series is due to switch over in the middle of this year while the first high-population region (Granada and North Wales) will become digital at the end of 2009. This may prove to be the first real test case of whether or not the Government’s advertising campaign has worked. I am not sure if people particularly want to know what analogue and digital really mean, they just want to know what equipment they need to carry on watching their favourite shows, which you would imagine is a message that has largely hit home. The advertising and BBC ‘public service announcements’ are designed to take the intimidation out of the technology, and make the options as obvious and easy to use as possible. But even so, and although the campaign was in its infancy, an estimated 6000 homes (out of a population of only 25,000) remained unprepared in Whitehaven – that hot-bed of technology that was chosen to be the UKs digital guinea pig back in 2007.
Equally, the American experience also demonstrates that there are still plenty of holes for the technically-challenged to fall through. For all that I didn’t see any of the American publicity for its switchover, the cost of its promotion and facilitation (coupons for digital equipment) was in the region of $2bn, which sounds like a big enough advertising campaign to get the message across. But the message still hadn’t reached around three million households by the time the analogue signal was switched off last week, despite the switchover having been delayed by four months to give people more time to adapt. These TV-less individuals who are currently left listening to radios or watching DVDs are unlikely to be in this situation through poverty (a simple set-top box is very cheap now and they were subsidised in the US), but more likely through lack of confidence in their ability to use the technology. The elderly and those with language barriers seem obvious examples.
So when the high population regions of the UK switchover, mostly in 2011 and 2012, will we be ready? In general we probably will be. The five year roll-out plan (rather than the US approach of doing it all at the same time) should have a smoothing effect on problems and enable authorities to cater for the most determined members of the ‘head-in-the-sand’ community. But, returning to my question in the introduction, does this have any beneficial effect for the UK TV market? The TVs themselves are largely designed and made in the Far East, so the benefit of increased sales of those is purely for the retailers. But I still think there is an opportunity out there.
Until fairly recently flat screens looked great until you turned them on, at which point it became clear that in terms of depth of colour and resolution they were still no match for the CRT. Over the past few years this has changed – screens are brighter, crisper and are a fraction of the cost. Some HD-ready screens nearly match the quality of the HD signals! Equally, optical drives are as cheap as chips and set-top boxes are virtually free when used as a loss-leader. However, more often than not most people will have effectively a rack of instruments underneath their TV, each needing to interact with each other yet each having independent controls. Most consumers feel there is no choice in this – there are ‘systems’ available, but as soon as one service improves or is introduced it will still need a new box to take advantage of it. Adding computer functionality, internet through TV and other next generation capabilities bringing IT and entertainment together, need to be catered for, without danger of obsolescence and while still catering for those who might have a huge back catalogue of DVDs (or maybe even videos).
So while the digital TV bonanza really benefits the retailer, I still think there is a ‘killer app within a killer app’ for the (British?) company who can successfully turn a number of components into a single TV system that is both flexible and future proof. If a company could achieve this I think there would be a huge opportunity to cash in on the digital TV bonanza.
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