3D for the home arrived to a world of a matured digital TV technology and an established Blu-ray industry, neither of both were available upon HDTV introduction a decade ago.
Would those technology advances make the 3D implementation easier than it was for HD? Perhaps, but those are only part of a possible success of 3D at home. The DTV transition has now been complete and about half of households have DTV. Those factors should also make the gradual acceptance of 3D easier, being a product based on similar digital video technology already accepted by millions of households.
HDTV did not have these favorable factors in 1998, other than DVDs showing better than VHS in analog sets since 1996.
However, this does not imply that consumers will rush to the stores and replace their sets with 3D sets. Read more…
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December 11th, 2008
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It has been widely reported that Fox announced plans to broadcast the college football BCS championship game in 3D at select movie theaters in Boston, New York, and Los Angeles. The plans were announced this week by Fox Sports CEO David Hill at the 3-D Entertainment Summit.
Perhaps more important were the comments made by Hill along with the announcement. He complained about how the networks had to bear the cost of converting to HD, for which they did not receive “a penny more” from the advertisers or television manufacturers. He said that he does not intend to let the rest of the industry take a free ride on the adoption of 3D, and that they’ll have to share in the costs if it is going to happen.
Forgive me, but it seems to me that Hill just doesn’t get it. I wasn’t involved then, but did the TV manufacturers help pay the networks to add support for color, or for stereo sound? I expect not. If Hill hasn’t noticed, many of the TV manufacturers are selling their products at or below cost. Just where does he think that the money will come from for them to chip in on the adoption of 3D technology. And both Panasonic and Samsung have been selling 3D-capable rear projection sets for years; sales have hardly set any records at this point, so I don’t see a pot of gold sitting there to share with Fox.
And what if the advertisers aren’t paying a penny more for HD content? Whose fault is that? It’s not the advertisers, that’s for sure. They pay what they have to in order to reach their target market. If HD is doing a better job than standard definition programming at delivering the desired audience, it will be worth more to the advertisers. I expect that the problem is that the video entertainment market is getting much more diluted, so there are fewer advertiser dollars available per show on average. Is this hard on the networks and content producers? Sure. But unless the new technology is going to help those other groups make more money, don’t expect them to help pay for it.
Networks are struggling to maintain their audiences, and they will have to do more to attract and retain viewers. 3D broadcasts may be part of that mix. But the cold truth is that if 3D is what it takes to remain competitive, the networks may have to figure out a different business model that will help them pay for it.
One of the assumptions about a slow-down in consumer electronics sales is that the prime brands will be okay, and it’s the smaller companies that get hammered. Well, as a measure of just how bad the situation is, Sony announced today that it intends to trim about $1.1 billion in annual costs. One way to get these savings is to cut about 8,000 jobs — about 5% of its workforce – as well as an unspecified number of seasonal and temporary workers. The company will also close about 10% of its 57 manufacturing sites, shifting production to locations with lower costs or relying on manufacturing partners.
It was just a few short years ago that Sony went through massive layoffs and cost-cutting programs. At the time, it was more a result of the company’s failure to maintain a competitive position in several markets that it used to dominate. This time, it doesn’t appear that Sony has done anything seriously wrong, as its products compete well in many areas. It’s just that with retailers postponing — or even cancelling – orders, cash flow is going to be a major problem all along the supply chain and not even the biggest of the big will be immune from its effects. It appears that Sony is addressing the issue early, and maybe the cuts will be enough to help it through the first half of the next year, which is traditionally a slow time for consumer electronic sales anyway.
The bottom line, however, is that if Sony is facing a cash crunch and closing production plants, the inventory pile-up must be significant across the whole industry. I continue to expect to see great bargains as everyone along the supply chain tries to find ways to squeeze cash out of the product that they have already created.
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