The literal disconnect between first-time HDTV buyers and HD service providers appears to be widening, and it may be due to false expectations of what will happen with the digital transition – yet another reason pay-TV providers should prepare for a spike in demand after Feb. 17.
Twelve percent of all U.S. households purchased a new HDTV in the past year; of that group, 41 percent still need to arrange for HD service from a cable or satellite provider, according to a new report.
Meanwhile, among those that have owned an HD set for several years, the percentage of those who do not subscribe to an HD service is smaller – closer to 20 percent, according to Frank N. Magid Associates' recent study of HDTV set owners.
"The majority of consumers have the arrangements they need to continue receiving local broadcast television channels following the digital transition (85 days from now), but still have not ordered the necessary service which will provide them with the high-definition programming they expect," said Maryann Baldwin, vice president of Magid Media Futures. "We believe that many of these HD service rejecters believe they will automatically start receiving their programming in high-definition concurrent with the digital broadcast transition, which, of course, is an incorrect notion."
"Cable and satellite providers need to prepare for the day after the digital transition. We believe there will be a jump in HD service demand following the digital transition when HDTV owners realize the transition only pertains to the reception of local television signals, not the delivery of high-definition programming for their cable network lineup," said Jill Rosengard Hill, senior vice president of Frank N. Magid Associates.
When asked the degree to which these HDTV set owners have taken time to research their HD programming options, the Magid study reveals that 43 percent of these owners have not looked into HD services from any provider. Only 39 percent looked into cable HD options, and 19 percent explored satellite HD options, the researchers reported.
When asked if there's any chance they may eventually arrange for HD programming service, 16 percent of these most-recent HDTV set buyers say they may sign up for satellite HD in the next six months, while 22 percent may sign up for cable HD, suggesting that service providers have the opportunity to pick up another 4.5 percent of TV households as HD programming customers.
Additional reasons for rejecting high-definition programming service included the fact that 41 percent do not believe HD services are worth the required fees, 30 percent feel they don't have it in the budget after buying the HDTV set itself, and 18 percent do not feel there are enough channels available in high-definition to make arrangements worthwhile.
This study indicates that tremendous HD customer acquisition opportunities still remain for cable and satellite providers, not just among those who will be purchasing a new HDTV set in the months ahead, but among the 12 percent of households who subscribe to cable and satellite but have not arranged for HD.
Currently, 32 percent of U.S. households own at least one HDTV set, and 64 percent of those owners receive HD programming from their cable or satellite provider, totaling 23 million households viewing HD programming at this time.
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