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 Supermarket giant Wal-Mart has recently announced a fully integrated multiplatform agreement with sports programming juggernaut ESPN to promote the retailer’s HDTV and multimedia offerings, writes Steve Maloney. The centerpiece of the promotional strategy is ESPN’s Monday Night Football broadcasts. The network is expanding its coverage of the traditional three-hour primetime American Football game telecast, transforming it into a 24-hour multimedia event.
The pairing is intriguing in part because it signals the widespread adoption of high definition television (HDTV) in the US. Not long ago, HDTV was limited to the high-end, specialty electronics shops. This was due to the high price of the sets, the paucity of programming produced for HDTV, and consumer reluctance to commit to an unvetted technology.
But, as US consumers became exposed to HDTV in sports bars and on display in mid-level electronics stores such as Best Buy and Circuit City, they were able to experience first-hand what all the fuss is about. Couple that with a sharp decline in price and it becomes easier to understand that a perfect storm is brewing.
What HDTV needed to ignite the fuse was a ‘killer app’. Enter sports programming - ESPN (and other networks) are doing more HD broadcasts. Sports programming is a natural for bringing out the best in HD. Football, in particular, sparkles in HD - the colours and sounds are noticeably enhanced. The world is flat
 The changing form factor of the television set itself benefits the sports viewer. HDTV is not just a clearer picture. It is about the size of the clear picture and the added involvement in the programme that then occurs. The next generation of television must increase the sense of reality (therefore greater engagement in the programme for the viewer) as the major feature. US viewers are accustomed to a 4:3 aspect ratio but nearly all HD-capable sets are designed with the 16:9 aspect ratio. This delivers a wider view resulting in seeing more of the field and action that takes place away from the ball.
Larger screens with better resolution will accommodate the arrival of simultaneous viewing of multiple games - perfect for the US sports fan. In fact, it has already started. For September’s US Open tennis championship, DirecTV teamed with USA Network and the USTA to launch the first ever interactive, multiscreen tennis application in the US. It allowed viewing of any of five additional courts through a Mix channel, in addition to the main USA Network feed.
Even larger screen area will be needed once technologies such as IPTV take hold. In time, viewers will be able to receive multiple simultaneous video streams, a dream scenario for US viewers’ insatiable appetite for sports video content. Moving well beyond the rudimentary picture-in-picture feature offered on some sets to date, one will need larger and larger screens to accommodate, let’s say, two football games, a NASCAR race, a college basketball game, and perhaps even a soccer (European football) match. Admittedly, the latter is less likely in the US - but you get the point. History foreshadows the inevitable
There is a historical precedent in the US when it comes to quantum advances in television technology. In the late 1950s, Major League baseball and, to some degree, football – both professional and collegiate – were major drivers in the growth of colour TV from black and white. Even so, it took more than 10 years before there were significant sales of colour receivers. It is ironic to note that, in 1961, the premier of ‘Walt Disney's Wonderful World of Colour’, a full-hour Sunday series of colour TV programmes, is often credited more than any other programme with sparking the increasing sales of colour receivers, and the eventual take-off of colour television. Now, Disney is the parent company of ESPN.
The first RCA colour sets cost $995. That would be the equivalent of roughly $6,400 today. In 1954, that was enough to buy a car, and nearly enough to buy a modest house. The spread in price was similar to the gap between analogue televisions and HDTV. HDTV For the Masses
 HDTVs are no longer only for the higher income early adopters. Price point is at a ‘Wal-Mart customer’ comfort level. I suspect there is a larger untapped ‘blue-collar’ market for HDTVs - that is Wal-Mart's customer base. Wal-Mart can compete with other big-box electronics retailers such as Best Buy and Circuit City. Whilst these stores can offer better service and support than Wal-Mart, they can't gain an advantage on price. Competition will place further downward pressure on prices. The Devil (and profit) is in the peripherals
While Wal-Mart shoppers, as opposed to the early-adopter technophiles who shop for electronics at smaller boutique electronics shops (think Bang & Olufsen), just want HDTV at a low price, buying an HDTV solves only part of the high-definition equation. Buyers will also need some HD source material to watch on their new TVs.
The new generation of add-on components – DTV-related equipment such as HD-DVD for playback and recording, HD tuning set-top-boxes (STB) for small-dish satellite, digital cable, and over-the-air (OTA) w/antenna reception, HD-DVRs (Digital Video Recorders), and the implementation of digital video connectivity (DVI, HDMI and IEEE-1394 Firewire) – will cost more. But, only after the flat panel is mounted on the wall will the typically less savvy Wal-Mart shoppers discover that they need the add-ons to realise the full potential of their new set and enhance the HDTV experience.
Other multimedia components – such as gaming – will follow, perhaps from Wal-Mart as well. Early Xbox devices and their ilk will also need to be replaced by HD-capable boxes to enable these HDTV sets to perform to their full capability and deliver the realism demanded by gamers. All of the new Xbox 360 game titles run at 720p or 1080i, while the PlayStation3 will support HD games as well as double as a Blu-ray movie player.
Added to all this is the time-worn unresolved standards battles typical of technological advances. Forget about viewing your collection of Blu-ray or HD DVDs on your existing DVD player. Due to format incompatibility, you will soon be shopping for new – and more expensive – DVD players. Complicating things further, a decision must be made on which format to back – bringing to mind the Betamax versus VHS battle of the early 1980s. Want to record an HD transmission to your existing TiVo recorder? OK. But you will sadly discover that, while the transmission is HD, the recording and playback is not. Once more unto the breach, dear friends… this time for a higher-priced DVD recorder/player!
As you can see, what began as a straight-forward TV purchase will become a much bigger ticket purchase once the additional bells-and-whistles are added. Industry insiders have dubbed this ‘the cascading effect’.
Initially, these components will cost significantly more but will eventually follow the path of their predecessors and settle at a more reasonable price point for mainstream consumers. It is hard to predict how long that will take. But, US consumers are not known for their patience and many will be unwilling to wait for component prices to drop. With a competitor such as Wal-Mart in the mix of consumer electronics retailers, consumers who decide to wait may not be waiting long. Contact Steve Maloney at sfmaloney@comcast.net
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