Ross Rubin: A Defining Moment for High-Definition ... Again

Dec. 20, 2006 — -- It's big, loud, shiny, and calls Las Vegas its home.

No, it's not an Elvis impersonator, but rather the Consumer Electronics Show, which enters its 40th year.

One of the star attractions of the exhibit has long been video -- CES was host to some of the earliest VCRs, video games, camcorders, and DVD players -- and this year will clearly mark the year of high-definition.

Hold on, though. Wasn't last year the year of high-definition? Or, come to think of it, the year before that? And the ones going at least as far back as 2001? Yes, they all were in a sense. But what separates this year from those is that in 2007, high-definition will go far beyond HDTV.

For years, the world's major consumer electronics companies have flaunted larger, thinner, and more expensive televisions, culminating in the 103-inch plasma television shown by Panasonic at last year's CES. It's too bad that the glass on these TVs is relatively fragile since, at that size, it would be one hydraulic lift away from converting into a reasonable Murphy bed.

But it is really this holiday season that has primed the pump for what we will see at CES -- an explosion of more reasonable TVs that will drive high-definition into the mainstream living room and beyond.

In particular, the glut of 32-inch or larger LCD televisions that plastered retailer fliers at $700 or less made these sleek TVs competitive with clunky old tube TVs. According to NPD, LCD televisions above 30 inches grew 297 percent in unit sales during the week of Black Friday.

Indeed, some were priced less than standard-definition tube TVs of similar sizes from major brand names.

Of course, some consumers will prefer to wait until they can afford their trusted brands, but the writing -- like many of these TVs themselves -- is on the wall.

This will open the floodgates for a wide range of products exploiting now-affordable HDTVs, including high-definition video game consoles from Microsoft and Sony, and next-generation optical disk players from the Blu-ray and HD-DVD camps.

Ross Rubin is director of industry analysis for consumer technology at The NPD Group www.NPD.com

High-definition is breathing new life into some slower-selling products such as digital video recorders and camcorders. NPD information shows that camcorder units were down four-tenths of a percent year-to-date in November.

Samsung has even offered a digital camera with an HDMI port for connecting to HDTVs.

HD may even propel emerging video products such as digital media adapters that stream content from PCs, set-top boxes that bring new video content into the living room via Internet or wireless connections, and media center PCs.

But there's a dark side to this new ecosystem that goes beyond boasts of superior contrast ratios. HD's ability to capture the realism and emotional impact of such bold filmmaking as "You, Me and Dupree" means that a new generation of content locks will work against the flexibility that consumers are increasingly expecting from digital content.

Media Center PCs running Windows Vista, for example, will be able to capture high-definition content using a standard called CableCARD.

However, unlike other video content on PCs, such programming won't be able to be sent to other products on the network or sent to a portable device.

Balancing the great quality of such video with the new demands to view content on a wide range of devices in practically any setting will be the biggest challenge of the high-definition world.

Ross Rubin is director of industry analysis for consumer technology at The NPD Group www.NPD.com