High Definition Television - The 21st Century Non-Starter

In late 2005, my ex-wife was laid off by her employer ... the Matsushita-Kotobuki behemoth. They manufacture many of the electronic hot-sellers that grace store shelves. From televisions to DVD players, they manufacture it all - placing on them, at the last moment of production, unique labels to signify the brand under which they'll be sold. If you ever wondered why Panasonic electronic equipment looks so much like Radio Shack equipment (and equipment sold under several other brand names), that's why - because they're all manufactured by the same people - Matsushita-Kotobuki.

The good news was that the layoff was temporary. The industry had given Matsushita-Kotobuki a mandate. High definition television would be the wave of the future. So, the manufacturing plant in Vancouver, Washington was closed to retool. No longer would they produce standard definition equipment. Everything would be high-definition from that point on, relegating standard-definition to lesser manufacturers. They were absolutely convinced that these lesser manufacturers would be left in the backwater as MK surged ahead of the pack with future technology that everybody wanted.

But then, a funny thing happened.

In early March 2006, my ex-wife went to work as usual. She and her co-workers were in for a big and unpleasant surprise. Her entire plant was closed. Everyone was laid off ... except for a select group of temps kept on to complete existing (paid-for) orders. And this time, the layoffs were permanent. Why? It wasn't quality related because everything their plant turned out was state-of-the-art. And it wasn't a move by the company to ship these jobs overseas. Simply put, unsold high definition equipment was being returned to them en-masse. No one was buying them.

When Matsushita-Kotobuki retooled, unbiased statistics revealed two truths about high definition television. First, 85% of all televisions manufactured today are high definition televisions. But, 85% of all televisions owned today are not. What's most interesting is that those numbers continue to be accurate. In short, the consumer is sending a strong and clear message to manufacturers and the industry ... but manufacturers and the industry are ignoring that message. The message is that Joe/Suzy Sixpack have no interest in high definition television.

This lack of interest is understandable. In the first place, the industry is shooting itself in the foot with a format war between HD-DVD and BluRay formats for the future DVD media player. In the second place, a simple look at current cable and satellite offerings reveals that high-definition programming is in the minority. And to get that programming, cable/sat bills generally double. In the third place, standard definition programming looks terrible on a high definition set. And in the fourth place, the cost of high definition sets far exceeds the cost of standard definition sets for the same display size. Even worse, aftermarket repair costs for plasma and LCD high definition sets are astronomical. With standard definition sets, most consumers realize that it's just as cheap to buy a new set as it is to repair an old one ... and so that's what they do. But who wants to get stuck with a four-figure paperweight they can't afford to repair?

This is all happening at a time when the purchasing power of the dollar is eroding ... when living-wage jobs are being replaced by poverty-level jobs ... when health-care costs are skyrocketing ... and when it costs almost as much to fill a gas tank as it does to buy a week of groceries (which have also increased in price).

What is happening now with high definition television has a parallel in our past. I'm referring to the innovation of quadraphonic stereo in the early 1970s. Like high definition television, quadraphonic stereo wasn't a new technology, only an improvement to an existing technology. And like the Iraq war, the war in Vietnam took a considerable toll on the economy - and drained our gasoline reserves to a point where the OPEC oil embargo could hurt is (and it did). Post-embargo gas was more expensive and stayed that way. And when push came to shove, Joe/Suzy Sixpack delivered a strong and clear message to audio manufacturers and the industry - that they were satisfied with "ordinary" stereo and had no plans to upgrade. And now, I can hear that same message being delivered to video manufacturers and the industry - that Joe/Suzy Sixpack (the middle-class consumer) is satisfied with "ordinary" video and has no plans to upgrade.

Everybody wanted quadraphonic stereo when it came out. In fact, I was one of the people who decided it was the wave of the future - and made considerable cash outlays in both SQ and discrete formats to get the equipment necessary to ride that wave. But, the wave just crashed on the shore - and went away. And now, everybody wants high definition TV. However, it isn't whether or not the public wants it that matters. It's whether or not the public wants to go to the expense of acquiring it ... and servicing it after the fact ... that matters. And so far, the answer to that question has been a resounding:

NO THANKS - I'M SATISFIED WITH WHAT I'VE GOT.

There will always be a niche demand for high definition TV. But that's all it will ever be ... a niche demand. Niches don't drive the marketplace - the middle-class consumer does. If industry mentality continues on its current course of "denial" to these facts, it's the Matsushita-Kotobukis that will be left in the backwater ... and the "lesser" manufacturers who continue to produce standard definition sets that will rule the marketplace of the future.

Post-Article Addendum - I do see a different wave of the future taking shape, however. Recently, I did some shopping at my local WalMart store - the store of preference for Joe/Suzy Sixpack. And while waiting in the checkout line, I saw two men wheeling a dolly toward the door with a massive (but thin) box on it. And on the side of the box was clearly printed "standard definition."

In short, the advent of high definition television has created a new demand of sorts. Consumers now want television sets with widescreen/flatscreen footprints. They want TVs that look like high definition sets ... but without the pricetags of high definition sets.