At last month’s 2012 CEA Line Show in New York City, tucked amongst the many manufacturer’s press conferences was a variety of panels discussing what the CEA purported to be today’s top issues. One such panel, the Next Gen TV panel, talked about…as you might imagine…emerging TV technologies like OLED, 4K resolution, and Internet-enabled TVs. Many in our business would suggest that this is old news. But things got more interesting when the panel strayed from technology topics and veered into a variety of industry issues, such as TV makers technology roll-out strategies, the politics of 4K, and Apple entering the TV business.
The panel was moderated by CNET’s David Katzmaier who did a good job of keeping the discussion moving at a reasonable pace covering as much ground as possible. Sitting on the panel was Rey Roque, Vice President of Marketing for Westinghouse Digital; Nick Slater, VP of Video Product Management, Dish Networks; John Taylor, VP of Public Affairs and Communications, LG Electronics, USA; Peter Vasay, VP of Technology Operations, THX; and James Willcox, Senior Editor, Electronics, Consumer Reports.
Besides UPP, what’s going on in the TV business?…
After discussing some of the challenges that the TV market has endured, including significant declines in shipments and dollars and the launch by many brands of UPP (unilateral pricing programs) to stabilize profits, Katzmaier threw the first question to John Taylor of LG to discuss just what’s going on in the TV business. Sounding a little defensive, and clearly not appreciative of the couching of the question, Taylor sounded an upbeat assessment of the business.
The sky is not falling. Our industry still sells 34 million television sets in the United States this year as an industry. And you know, the exciting thing – and I’ve been in the TV business for a long time – we had a lot of excitement around the launch of HDTV and the transition from analog to digital, and the transition to flat panel.
We’re at the brink again of a sea change in our industry and some of it’s already under way today with the huge penetration and continued growth of connected devices and what we call smart TV in the industry. We’ll probably get into it a little later but we’re bullish still on 3DTV. But we’re really at the brink with a lot of exciting new technologies like OLED and 4K coming later this year and really providing a jump start for more excitement in years ahead.
Westinghouse Digital’s Roque agreed with Taylor that there are many TV developments that promise to re-excite consumers to open their pocketbooks. Roque added that the trend towards larger screen sizes is a development that consumers are responding to as well. To demonstrate the point, Westinghouse showed a 70-inch panel in their booth.
Roque also suggested that the 4K resolution is another exciting area for the industry. Westinghouse had a 55-inch 4K panel on display in their booth as well.
Is the “selling” of technology broken?…
Jim Wilcoxx of Consumer Reports suggested that it isn’t any one technology that is driving the TV business right now.
“I don’t think it’s really one type of technology that’s really driving things,” Wilcox told reporters. “Certainly from our readers, I think Internet TV is the thing that’s really creating the most excitement.”
But then Wilcoxx took an interesting diversion from the conversation on what technology is driving the TV business and suggested that how TV technologies are being sold to consumers right now is…problematical.
And it’s also exacerbated, I think, by the showroom situation – where it’s very difficult in a lot of retail environments to sort of generate the excitement and explain theses new features to consumers. So I think that probably the biggest challenge is actually, how do you let consumers know about these new technologies and the benefits of them.
Go back to independent retailers to sell new technologies…
Willcox would return to this point again, saying that – in the past – new technologies were rolled out first through the independent specialists who were better equipped and would take the time to help consumers understand the technologies and features and create demand for new technologies. Now, however, most manufacturers are taking their latest products with the newest technologies directly to the mass marketers – and they are just simply unable effectively present and sell these new technologies.
Katzmaier, then turned to the topic of 4K resolution asking the panel, starting with Taylor, “How do you convince people that 4K is worth paying for?”
“Seeing is believing,” Taylor asserted, sounding like he dusted off his old 3DTV pitch. “I think particularly in large screens when you get into the 70-, 80-inch category, it is a dramatic improvement and a stunning experience with 4K.”
The value of 4K resolution isn’t clear to Dish…
When Katzmaier threw the question to Slater of Dish, he basically suggested that Dish will take a long, slow look at 4K. Noting that for them, it is a significant investment in equipment and satellites to upgrade to 4K, Slater sounded skeptical. Dish is already 1080, Slater noted, but 4K takes more bandwidth than HD and that makes it a bit of a challenge for them.
Dish is a value provider to customers who appreciate that, Slater told reporters.While 4K may be exciting to talk about in New York City, in Iowa “where our customer lives,” it’s not going to be there for a while. So Dish will take a wait-and-see attitude.
“It’s a question of how the ecosystem evolves,” Slater told the press. Later saying, “There needs to be a return on investment for us.”
THX is ‘technology agnostic’ even with OLED…
When the discussion turned to OLED, Katzmaier asked THX’s Vasay what his company thought about it since he assumes they’ve had it in their labs for a while. Vasay confirmed that the company has had OLED products in for testing and he was quite complimentary about its performance.
Noting OLED’s deeper blacks and vibrant colors, Vasay then said that THX is “technology agnostic.” What’s important to THX is not any given technology, but rather that the picture is accurate to the director’s original intention. That is why THX invented THX mode on select TV models, so that consumers could easily attain an accurate performance without having to deal with manually calibrating their TV sets.
“So,” Katzmaier turns to LG’s Taylor, “is LG’s OLED going to be THX-certified?”
Will LG have THX-certified OLED?…
After a brief pause, Taylor said, “It’s too soon to say.” Taylor went on to note that LG was one of the first major manufacturers to work with THX on previous products. But he never explained why he couldn’t say for sure that LG would have THX-certified OLED products.
Katzmaier then asked the panel their thoughts on Apple entering the TV business. Taylor jumped in and suggested that Apple may want to reconsider – “It’s a mighty competitive business and I think Apple might want to think twice,” he laughed. But then Taylor went on to say its a big market and there’s room for another player.
Apple iTV? Bring it on!…
“Will there be a space for new entrants – sure,” Taylor said. “Are they going to upset the entire apple cart? I don’t think so.”
But perhaps the more interesting perspective came from – for me – a surprising source…Nick Slater of Dish.
I think from my perspective on that, I think if Apple launches a piece of hardware no one is going to run out and buy it because its a beautiful piece of hardware. It’s going to be because it performs the useability functions considerably better than the industry incumbents have done today…and that includes Dish.
So then you have to say what problems are they really going to solve? Well…we’re responsible for this as well…and we’re working on solving this. But interacting with your TV today has not been a great experience. It’s a one-way conversation – let’s leave the apps and Internet-enabled piece out of it for a second. Just dialing up your program guide is frustrating.
Dish, for one, is taking Apple’s entry into TV seriously…
Slater then went on to describe, fairly accurately I’d say, how frustrating the program guide is on a system with hundreds of channels presented in incrementally ascending channel order over a linearly imposed timing schedule…for hundreds of channels.When you factor in thousands of on-demand movie channels and 100 thousand DVDs and other content, it is incredibly confusing for the consumer – and hard to find what they want to watch. And they only watch seven programs a day, according to Slater.
“We talk about this internally all the time,” Slater told the reporters. He added:
So how do I bring more relevance to the shopping and consumption process…and if they do a better job then we have done or that we will introduce then I think they’ll be a step ahead. If you look at the problems that they are likely trying to solve that’s one of the big ones.
The second one is the interrelationship across devices and…uh…they’re pretty good at that. Yeah, so…we take it pretty seriously.
Is Dish the only one concerned?…
Slater delivered his assessment rapid-fire and one got the sense that he either had some inside scoop to what Apple was working on…or at least he was a pretty good guesser. When he said that Dish took the challenge from Apple pretty seriously…I believed him.
It also was very interesting that the Dish executive was the only one who delivered a thoughtful assessment of the potential impact on the TV business with an entry from Apple. Were the others bluffing? Or are they “whistling in the dark?”