HDTV Stars Finally Aligned

As prices decline, networks expand their programming

With 12 million HDTVs now in U.S. homes, and bullish predictions for the future as prices fall, it looks like HDTV has finally arrived. Indeed, ABC's presentation of the Rose Bowl on Jan. 4 will probably set an HDTV viewership record. That's a great curtain raiser for the Consumer Electronics Show (CES), which opens in Las Vegas a day later and runs until Jan. 8.

At CES, the drumroll for HDTV will continue. Voom, the suite of 10 special HDTV channels carried on EchoStar's Dish DBS system, will announce at the show that it is adding a handful of new specialized channels. That expansion, along with EchoStar's deployment of new MPEG-4 digital boxes that will allow it to add even more channels, should make the DBS provider more enticing to HDTV-set owners. Dish is staking a good deal of its future in becoming the acknowledged leader in HD programming.

“This is the end of preseason for HD,” says Voom General Manager Greg Moyer. “Because with MPEG 4, then the real games begin.”

HDTV has been around for years (The Tonight Show With Jay Leno switched to HD in 1999), but until recently, there hasn't been a lot to watch, or many sets in use. Now, however, the HD menu is fairly extensive, and growing, with ESPN HD and National Geographic's upcoming HD version adding interest, and MTV's MHD about to put a high-definition spin on a wide variety of music. It debuts Jan. 16.

“If you look at a lot of the research that's been done in HD, the thing that jumps out quickly is music is one of the pieces of programming that really is significantly enhanced in an HD format,” says Jeff Yapp, executive VP, MTV Networks Music and Logo Enterprise Group, who is heading the MHD launch.

THE BEST SEAT IN THE HOUSE

“For us, it made total sense to deliver to our audience the best possible experience they could get, and we think that has to do with high-definition,” says Yapp. “So that's what really drove us to launch this channel. We have a saying that the best seat in your house is in your living room—and it really is. Music concerts in high-definition are a completely different experience.”

There's more conventional wisdom about why consumers buy HDTV: Sports. “A lot of what we do in fall headed to the winter is to set the stage [with programming] for the massive buying of television sets that occurs from roughly Thanksgiving to the Super Bowl,” says Bryan Burns, VP, strategic planning and business development, ESPN. “It's not just a very short 10-day period around Christmas. We were very football-oriented this fall for that reason.”

ESPN, with a massive investment in HD equipment and a new 120,000-square-foot digital facility in Bristol, Conn., is using its considerable clout to encourage consumers to take the HDTV plunge. ESPN HD and ESPN2 HD outperformed their projected goal of delivering 400 event telecasts in 2005—the channels actually delivered 467.

In 2006, ESPN's goal is to telecast more than 600 events, in addition to movies, original series and news and information programs such as SportsCenter and NFL Countdown. This year, ESPN HD, ESPN2 HD and ABC Sports HD will, combined, offer 24 of its 25 post-season college bowl games in high-definition.

MAKING HD “FUTURE PROOF”

Likewise, the National Geographic Channel's high-definition channel, launching Jan. 27 and dubbed NGC-HD, is leveraging the history of the magazine known for its breathtaking photography. In a brand survey, Nat Geo ranked as the top network consumers said they'd like to see in high-def. Since last February, Nat Geo has shot all of its footage in high-definition to “future proof” the network, says Executive VP of Programming John Ford.

At launch, it will have 127 hours of HD. By the end of first quarter, it will have 170 hours, and it projects growth of 45-50 hours every quarter after that. By the end of the year, Nat Geo is expected to have 300 hours of HD fare.

Retailers and manufacturers at CES and TV executives like Ford, Moyer, Burns and Yapp are banking on research that reports 22% of all Americans say they're going to buy an HD set by the end of 2006, or already have one. Still, there was a recent Forrester Research survey that determined about half the current HD consumers really haven't connected it properly.

WHY DON'T VIEWERS WATCH HD?

Ford would find that statistic baffling. “The companies promote and stock and really push it hard,” Ford says. “Not just the set suppliers and the retail stores but also the distributors, because the distributors want people to sign up right away. You've got lots of alliances between the Time Warners and Comcasts of the world at the retail level, so as soon as you buy your HD set, there's somebody to say here's how you can hook up and get HD service and get all these channels.” Still, Nat Geo will include promo spots on the channel.

Voom's Moyer isn't so sure that research isn't right. “We bemoan the fact there is all this low-hanging fruit—people with HD sets, for God's sake—and they still don't connect to a source of HD programming. We think most of these sets are being used for DVDs. They're watching TV in standard- definition, which is nuts.”

But he is sure that once people see HD, they will be hooked. Voom gets letters from viewers who have been blown away by the pretty pictures, like the travel show that featured an HD camera mounted on a helicopter slowly flying over the Tuscan countryside in Italy. “It's calm and nice in standard-def, but in HD, it's oh my God, this is cool. People would write and say, 'I could never believe I could watch an hour of this. It was mesmerizing.' They use words like 'mesmerizing.'”