The Wall Street Journal took note of this expected trend today, holding that a reduction in HD set buys could have unfortunate consequences for DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH), which are hanging their hats on massive hi-def programming lineups in the hopes that the strategy will attract gobs of new customers. (See Dish to Serve Up 1080p and Dish Pumps Up Hi-Def.)
"Consumers are justifiably scared, and the wide-screen TV is among the most discretionary of purchases," Sanford C. Bernstein & Co. Inc. analyst Craig Moffett told the paper.
The piece also notes that a slowdown in HD set purchases could offer a "silver lining" for cable operators if it does indeed reduce defections to satellite TV. But it could likewise affect the industry's first foray into the retail aspects of tru2way, a uniform, "open" headend and middleware platform for digital TVs and set-tops.
Among tru2way suppliers, Panasonic Corp. (NYSE: PC) is expected to lead the way this holiday season with the introduction of two HD sets based on the platform, which require CableCARDs to authorize digital cable services. Those sets (Panasonic's starting off with 42-inch and 50-inch tru2way TV models) received CableLabs certification a few weeks ago. (See CableLabs Stamps Panasonic TVs .)
Thus far, Panasonic has not revealed its retail strategy for the 2008 holidays or expressed its near-term expectations for these cool new sets, but it's likely that the company (smartly) will target distribution of tru2way-based TVs in markets where cable operators have already upgraded their headends to support tru2way.
One obvious first choice for availability is the Denver market, where Panasonic recently showed off a tru2way set running a live demo from Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s cable plant, supporting the MSO's program guide and its video-on-demand (VOD) service. (See Panasonic Plays With Live Ammo .)
But there's not much tru2way-related retail activity to speak of yet -- at least based on my visit to a Best Buy south of Denver over the weekend. I asked sales reps there if they had any tru2way sets available or knew when some might show up, and most of them didn’t know what I was talking about. And that's not exactly a surprise. If retail availability is still weeks away, it's unlikely that they've received any training yet. But we'll be keeping our ear to the ground for tru2way here in the Mile High City.
Even if the 2008 holiday season doesn’t prove to be a big starter for tru2way-powered TVs, the cause might not just be traced to consumer fears but to a present lack of support for the new technology. Many cable systems are still in the middle of tru2way headend upgrades, but that picture will change significantly in relative short order.
Recall that the major MSOs that signed the tru2way "memorandum of understanding" agreed to upgrade their headends for tru2way in all digital cable systems by July 1, 2009. Charter Communications Inc. is the exception. It has until July 1, 2010 to fulfill its commitment. (See Revealed: The Tru2way MOU.)
So, based on those expectations, 2008 may offer Panasonic and operators like Comcast a nice, early testing ground for tru2way, but a truer indication of interest and adoption for tru2way TVs and boxes might not be known until after the 2009 holidays. That will also provide another year for the market to restore consumer confidence and perhaps reverse the HDTV-buying trend that's expected this season.
— Jeff Baumgartner, Site Editor, Cable Digital News