Musings On Music & HDTV Biz

If this column comes off as cranky and crusty, a la Andy Rooney, I don't care. Maybe it is the rotten winter weather, the continued talk of war, the things I've read about the industry or seen in the field lately, or all of the above. Anyway you've been warned:

In The New York Times' Business section the morning of the Grammy Awards, a headline blared "Twilight Of The CD? Not If It Can Be Reinvented." The story mentioned the usual culprits for the recording industry's problems: free downloads led the pack, along with the popularity of DVDs and video games, which are seen as eroding the interest in CDs. (Quoted in the story is the RIAA's Hillary Rosen, who is in denial if she believes her organization's survey, which says only 3 percent of those recently polled complained about CD pricing.)

It has been at least three years, since the record industry saw its sales flattening due to high prices, lack of compelling new artists and the effects of Napster, et al. The recording industry should have anticipated Napster immediately with a business plan that provides added value vs. suing everyone and calling their customers criminals.

The Sony line show (see p. 1) included a demo of the new Super Audio CD of Police's "Every Breath You Take — The Classics," a best of collection that debuts this month. After the demo, someone asked a Universal Music exec, "Shouldn't the recording industry launch a marketing program emphasizing the music quality of CD and Super Audio CD as far better than free MP3 downloads?" Yes, the official said, but that is "a long-term strategy" for the industry.

Why wait? As free, inferior MP3 downloads increase, the industry has slowly gotten into the paid subscription download business without adding value. They haven't effectively marketed the superior sound of Super Audio CD, DVD Video or regular CDs to consumers.

Until the music industry gets its act together, last year's declining audio shipment numbers (see p. 14) may be the rule in the future. And think about this: Gen X's home audio component of choice is the PC.

After visiting Sony's line preview, I spent the rest of the day visiting local retailers to see how they are selling and merchandising HDTV. My findings are similar to those found by TWICE editor-at-large Bob Gerson. (See his column in our next issue, March 24.) Namely the HDTV retail presentation and salesmanship is mediocre at best. Merchandising displays and image quality on the screens at the stores I visited were worse. But the retail problem is just the tip of the iceberg.

Great strides have been made in digital TV acceptance over the years. According to CEA's 2002 estimates digital TV unit shipments were 2.6 million, but that's compared to analog's 28.8 million. That's why the tone of the coverage in the consumer media falls into two camps: "HDTV sales are slow," or, "Until you get widespread programming, don't buy one."

As a member of the media, don't blame my colleagues. Also don't blame CE manufacturers, who have been ahead of the curve on this issue. Consumer and retailer confusion still reigns, thanks to foot-dragging by Hollywood, broadcasters, cable providers, the computer industry and, sometimes, by the FCC.

Like the Allied forces that were part of the Normandy landings on D-Day during World War II, HDTV backers seem to be stuck in hedgerow country. They are waiting for someone to deliver a General George S. Patton-type-breakout maneuver that will excite consumers and make it as popular as today's analog TV. Until a breakout in the form of a consensus happens, the excitement, value and quite possibly the profitability from the format will wither.