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Thin TVs Wanted; HDTV Confusion Lingers

New TVs: Thin May Be In, But Bigger Is Better in the World of HDTV; Latest Survey by The NPD Group Provides a Clear Picture of Where HDTV is Headed in 2005

PORT WASHINGTON, N.Y., June 20, 2005 — When it comes to TVs, thin is definitely in, according to The NPD Group report, “Coming In Clearer.” Based on a recent online consumer survey, the report evaluates trends driving the market and confirms that manufacturers, service providers and merchants must do a better job in educating the public on the virtues of HDTV.

Not surprisingly, a majority of respondents said they sought a bigger, wider screen, generally in the 40- to 46-inch range. Nearly 25 percent of respondents indicated they would spend the extra money for the art house effect afforded by hanging a 3- to 4-inch plasma or LCD screen on the wall.

Even though many consumers have yet to learn the benefits of HDTV, the remainder of this year should continue to see greater adoption, driven by sports, movies and concerts. Interestingly, many consumers don’t think of their new television as the center of a digital hub. Only 76 percent of LCD TVs had a device attached to them, which is most often a DVD player. That’s significantly less than traditional tube TVs, which come in at 89 percent. Plasma sets, generally larger and more often seen as the entertainment “hearth,” had nearly as high an attach rate.

Another surprising tidbit from the report: NPD found that nearly 20 percent of consumers said they were interested in CableCards – cards that can be used in CableCard-ready televisions and act as a digital cable decoder, replacing the digital cable set-top box. And this is despite the fact that the cable industry has done little or nothing to promote the technology.

The Death Knell for Direct View
Even though The NPD Group found 96 percent of homes surveyed still have standard TVs, they are no longer driving the market. Those sets won’t be going anywhere soon, but respondents who plan to buy a new television in the next year are just as likely to buy a plasma or LCD as they are to buy another tube model. In short, the newer technologies are poised to break the stranglehold of glass tube TVs. Eventually, buyers won’t have any other choice, particularly since many want to future-proof their next purchase: Some 60 percent listed HD capabilities as a desired feature in their next set.

The Confusion Solution
The bad news, according to the study, is that seven years after the first HDTV sets hit the market, the technology is still confusing a lot of consumers. It’s not that people aren’t interested–in fact, the study shows a high level of interest in the new technologies.

“Manufacturers, service providers and stores must do more to clear up the distinctions between the different types of televisions. Since the study found most consumers prefer to gather information in person, the onus to answer questions from buyers seems to be on the reseller,” said Ross Rubin, director of industry analysis, The NPD Group.

The Exclusive HDTV Club
Breaking into the high-end TV manufacturer’s club is no picnic. And adding more brands to the mix only adds to the confusion. According to the study, market newcomers have to do more to stand out in a jam-packed marketplace and overcome buyers’ reservations about the quality of their products. The good news: A number of the study’s respondents were drawn more to a particular technology than a brand name. As a result, they were willing to give new brands a chance, particularly if the company offered a solid warranty and garnered good reviews.

Methodology
“Coming In Clearer” was an online survey conducted among members of The NPD Group’s online consumer panel. A nationally-balanced sample of 6,280 adults completed the survey between April 15 and April 22, 2005. Respondents were surveyed about different aspects of TV installation and usage for five main types: standard TV with glass tube; plasma display; LCD TV; rear projection TV and front projection TV. The survey is the second in a series of annual studies to measure ownership and attitudes underlying the growth of the digital television market.

About The NPD Group, Inc.
Since 1967 The NPD Group has provided reliable and comprehensive consumer and retail information for a wide range of industries. Today more than 1,400 manufacturers and retailers rely on NPD to help them better understand their customers, product categories, distribution channels and competition in order to help guide their business. Information from The NPD Group is available for the following major vertical sectors: apparel, appliances, automotive, beauty, consumer electronics, food and beverage, foodservice, footwear, home improvement, housewares, imaging, information technology, music, software, travel, toys, video games, and wireless. For more information visit http://www.npd.com

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