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first_imgA few weeks ago, Anthony Spezza and a colleague helped a shopper at the Best Buy in Torrance purchase a high-definition television and associated equipment. After the HDTV was delivered and installed at the buyer’s home, his wife returned to the home-electronics chain with a page-and-a-half letter of thanks from her husband. She also hugged the two salesmen. “I’ve had customers bring cookies,” said Spezza, the store’s home theater supervisor. “I would say excitement is one of the words to use. I mean, who’s not excited about high-definition televisions?”That excitement has caused a major shift in consumer trends and altered how retailers, content providers and pay-television services do business. Consumers are expected to buy 20.7million HDTVs this year, up from 60,000 units in 1999, according to the Consumer Electronics Association, an Arlington, Va.-based trade group. In June, the CEA released a study that found 30percent of U.S. households had HDTV, with that figure likely rising to 36percent by next month. Furthermore, nearly a third of HDTV households owns more than one, the study said. The trade group estimates that by 2011, the cumulative number of HDTVs sold in the United States will reach 170million. That will represent about one unit for every two people. In a sign of how retailers are adjusting to the new reality, Best Buy announced in October that its 1,200 stores had stopped selling analog televisions. Other retailers soon will follow. Several factors lay behind this trend to HDTV, beyond the gee-whiz effect of the technology. Congress has mandated that by Feb.17, 2009, all full-power television broadcast stations must broadcast in digital format rather than the older analog format. Digital format is more efficient and allows for improved picture and sound quality, and more programming options through multiple broadcast streams. For example, instead of just Channel 7, think Channel 7 and 7.1, 7.2, 7.3 and so on. By switching to all-digital broadcasting, analog frequencies can be reserved for public-safety uses such as police and fire, and for commercial wireless services. As a result, many people with analog televisions who receive their signal through over-the-air antennas will have to either acquire a digital-to-analog set-top converter or switch to a digital television. That switch is sending consumers to stores such as Best Buy in search of digital televisions. Once in the store, consumers find themselves drawn to HDTVs, which have a clearer, more defined picture than regular digital TVs, CEA spokeswoman Megan Pollock said. “They could just buy the digital TVs. But many are buying a high-definition set,” Pollock said. “When a consumer goes in and sees those flat panels, the crystal-clear (picture), they want that. They say I want the best.” The upgrade is more affordable now, with many HDTVs costing only several hundred dollars more than a standard digital TV. The growing number of shows in high definition also has lured consumers to pay extra for an HDTV, Pollock said. Many football, basketball and other sporting events are routinely broadcast in high definition. The same is true for prime-time scripted shows. “Most prime-time shows – “Lost,” “House,” “24” – are in high definition,” Pollock said. “That has been a driving force, as well as many sporting programs. A lot of programs have been publicized as being in HD.” Cable and satellite pay-television services also are offering more high-definition channels to appeal to the ever-growing number of HDTV households. In October, El Segundo-based DirecTV Group, the nation’s biggest satellite television service, said it had begun offering 72 national high-definition channels, more than any other television provider. DirecTV said it would have up to 100 high-definition channels by December. “It will become more important as more and more people buy HD sets,” said Derek Chang, DirecTV’s executive vice president in charge of content strategy and development. “Now is going to be an interesting period to test whether customers will gravitate to the guys with more HD. Clearly our belief is the answer is yes. If you’re going to go buy an HDTV for $1,000 or $2,000, the last thing you want to do is not get HD content. You don’t buy a Porsche and then put regular gas into it.” Yet, that is what many HDTV owners are doing, with only 44percent of them receiving high-definition programming, according to the CEA study. These people bought the devices to improve their movie and gaming experiences, with DVD players and game consoles having kept up with the high-definition craze. The CEA study also found that high-definition content is not causing pay-television subscribers to migrate from one provider to another. It’s unclear if this dynamic will change as HDTV becomes a wider part of American television viewers’ home entertainment experience. In fact, such channels can help set providers apart from the competition, said Jimmy Schaeffler, senior analyst at The Carmel Group in Carmel. “If you can differentiate yourself in a positive way in front of the consumer, then not only is it the assumption but the practice that they choose your service,” Schaeffler said. With providers adding more high-definition, consumers may expect the increased competition to lower the price. But that may not be the case, Schaeffler said. “You’re getting into the whole thing about whether these multichannel operators want to engage in a price war. And that’s one of the last things they’ll do,” Schaeffler said. “When you can offer things like HDTV in a differentiated fashion, you don’t have to differentiate yourself using prices. You give people more channels of HD, and you give them an HD digital video recorder with it, and you rent it real cheaply every month.” At the Best Buy in Torrance, shoppers are greeted just inside the door by several HDTVs. The main HDTV area, which also has DVD players, speakers and special cables, takes up 35percent to 40percent of the store, said Spezza, the home theater supervisor. Standard digital televisions occupy only two store aisles. Analog televisions, which had dominated home-viewing for decades, have no shelf space. In a viewing room at the Best Buy, Hector Lopez sits in a leather recliner while watching the “Spider-Man 3” movie on a 71-inch LG plasma HDTV. The television’s price tag is $14,999.98. Lopez, a 23-year-old tow-truck driver from Downey, says the giant set is worth the price if you can afford it. Last Christmas, Lopez bought his first HDTV for his living room. He bought another one for his bedroom two months later. Lopez uses his TVs mostly to watch sports and play video games with his Xbox game console. Now he encourages his friends to purchase HDTVs. Lopez said he would never return to anything less than HDTV. “That’s kind of hard to picture a situation like that,” Lopez said. [email protected] local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!last_img read more