Price Defines HDTV Purchase

Dropping prices could be the defining criteria for the 4 percent rise in adoption of high-definition television (HDTV) [define] sets in the U.S., according to analysis from Leichtman Research Group, Inc. (LRG), and 33 million HDTV-capable households are predicted by the end of 2007.

Bruce Leichtman, president and principal analyst for LRG discusses the findings contained in the June 2003 report: “With over 275 million television sets in U.S. households, it will be many years before HDTV sets become the norm. Yet with prices decreasing, purchasing an HDTV set is becoming a default for the high-end TV buyer rather than an active decision to get an HDTV set. This will result in the sale of millions of HDTV sets in the next few years.”

Based on telephone surveys with 1,250 U.S. households where cable television is available, LRG found that current HDTV owners have an average household income 73 percent above average, and those most likely to purchase an HDTV set in the next year have an average income 54 percent above average.

Other findings include:

  • 9 percent of direct broadcast satellite (DBS) subscribers in areas where cable TV is available say that they currently own an HD-capable set, compared to 4 percent of cable subscribers
  • An additional 13 percent of DBS subscribers say that they are very familiar with HDTV, compared to 8 percent of cable subscribers
  • 43 percent of those who have an HDTV set, or are very interested in getting an HDTV set in the next year, would be very likely to spend $9.95/month for an HD programming package
  • 26 percent of consumers who plan to purchase a TV set in the next year expect to spend over $1,000

LRG’s findings of a direct correlation between HDTV adoption and the price of equipment is confirmed by research from
The Cable & Telecommunications Association for Marketing (CTAM).

The CTAM survey, conducted during February and March 2003, of 1,017 respondents in U.S. households included 396 analog, 189 digital, and 254 DBS customers found that 28 percent of respondents were “very” or “somewhat” likely to buy a wide-screen HDTV monitor and decoder if the price falls to $1,800 in the next three years.

Likelihood of Purchasing HDTV Monitor
at Different Price
  $1800 $1500 $1200 $900 $600 $300
Very Likely 10% 11% 14% 24% 30% 45%
Somewhat Likely 18% 19% 22% 17% 27% 20%
Not Very Likely 15% 18% 14% 16% 8% 6%
Not At All Likely 51% 46% 46% 38% 31% 23%
Base: Total TV households who don9t already own
HDTV equipment.
Note: Price points were tested by a split sample.

One sub-sample tested $1,800, $1,200 and $600;

with the other testing $1,500, $900 and $300.
Source: The Cable & Telecommunications
Association for Marketing

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