37M Homes Could Have HDTV BY 2008

Competition, falling prices and new regulations will spur millions of U.S. households to adopt High Definition TV over the next five years, according to Strategy Analytics’, “The Transition toDigital Television: FCC Mandates and Market Evolution.” This report predicts that the number of US households owning some type of HD-capable hardware will rise from 8.7 million in 2003 to more than14 million by the end of this year. Roughly half of these households will also receive HD programming from cable, satellite or terrestrial sources. By 2008, some 37 million households will receive HDprogramming.

Even with this rapid growth, it remains highly unlikely that digital TV hardware will reach the penetration levels needed to conclude the government’s goal of a full transition to digital broadcasting within the next five years. As a result, legislators and the FCC must seriously consider further regulatory measures, such as the down-conversion of digital signals or the subsidy of adaptors for millions of existing TVs.

“The next 12 months will be a critical period, as consumer electronics vendors launch a new generation of digital receivers incorporating government-mandated features such as ATSC tuners and CableCARD slots,” states James Penhune, Director of the Strategy Analytics Broadband Media and Communications practice. “At the same time, market factors are combining to promote demand for digital TV. These include a growing base of households with HD-capable displays and the increasing importance of HD programming services to cable and satellite operators competing for high-value subscribers.”

The report also reviews the history of the digital TV transition in the US, and evaluates the impact of recent mandates imposed on TV makers, broadcasters and cable operators over the last two years.