Amid a continuing disparity between HDTV set ownership and HD service adoption, 14 million US households report owning HDTV sets but not subscribing to an HD programming service, according to a study by Frank N. Magid Associates. That disparity signals opportunities for operators to grow their HDTV ownership base and programming customers, Magid said.
HDTV set adoption has continued to grow at a steady pace since the digital transition period that drove unprecedented adoption of HDTV sets, from 20% of US households in 2007 to 32% in 2008.
In 2009, 35% of consumers report owning an HDTV set in their household, and an additional group of 8% of households describes their primary TV set as plasma or LCD and widescreen, but not HD, suggesting they own an HDTV set but aren't truly aware of it.
This translates to 43%, or approximately 49 million households in the US, that own an HDTV set, the study suggests.
Those who describe their home as owning at least one HDTV set and subscribing to HD service remains limited, at 66% of HDTV set owners––nearly the same level of service subscription as the 64% in 2008. In terms of the size of the opportunity for operators, this translates to 14 million households with HDTV sets, but without programming service.
Thus, one-third of consumers, so-called "sideliners," own an HDTV set but don't subscribe to HDTV service, and among them:
- 42% say "options are not worth the fees."
- 33% say cost and affordability are the primary reasons for not buying service.
- 32% say they "like the way the set looks, but don't need HD programming" (25% said the same in 2008).
Asked about the likelihood that they would arrange for HD programming service, 16% of non-subscribers say they may sign up for satellite HD in the next six months, while 22% say they may sign up for cable HD, suggesting that service providers have the opportunity to pick up another 4.5% of TV households as HD programming customers.
Though HD programming service still lags significantly behind set adoption, HD programming service providers have made progress in the pace of conversion from buyers to subscribers, with 43% of buyers arranging for service when they bought their set, up from an average of 32% in the previous five years.
"The disparity between HDTV ownership and service adoption reveals challenges for programmers," said Maryann Baldwin, vice-president of Magid Media Futures. "Some consumers were driven to purchase HDTVs under the erroneous assumption that they would be prepared for the digital transition—and didn't buy an HDTV set for the value of the programming in the first place."
"On the other hand, this reveals a major opportunity to increase programming subscriptions and to close the gap between set buyers and service adopters though improved marketing and education," said Jill Rosengard Hill, senior vice-president. "Since marketing buzz has waned after the digital transition, HD is fading as a top-of-mind feature for some consumers."
The need for improved marketing is also demonstrated by an additional 13% of consumers who say they have not seen or heard anything about high-definition television, the highest percentage since this survey was initiated in 2002.
About the data: The online survey was conducted by Frank N. Magid Associates in October 2009 using a nationally representative sample of 1,373 adults age 21 years or more who own an HDTV set.
