Implications of the Evolution to High Definition

After a rocky start -- I recall Steve Martin hosting the 2003 Oscars giving a shout-out to the HD viewers, all three of whom he said were "watching at Circuit City" -- High Definition is the New Normal, per Nielsen.

The logo of Circuit City, the late electronics chain

Nielsen's findings:

• "more than three quarters" on US households have an HD set; up 14 points from last year
• 61% of prime time viewing is done on an HD set
• 29% of English-language broadcast prime viewing is in true HD
• 25% of cable prime viewing is in true HD

Why do people watch SD programming on an HD set? Three things come to mind:

• The programming they want to watch is only available in SD.
• The programming they want to watch is available in HD, but they do not have an HD box.
• The programming they want to watch is available in HD, they have an HD box, but they are not tuned to the HD channel.

The marketplace has taken care of the first point, every one of the top 25 cable networks has an HD feed, as well as all of the major broadcasters. Nick Jr., Teen Nick, and Nicktoons are about the most prominent channel that is not in HD (children's services were/are generally HD laggards; sports services are HD leaders). Current TV may be the most prominent SD-only service that is not targeted at children, which is not exactly a distinction one would want.

The second point is a real one. In some places the TV provider charges extra for an HD box or "technology fee" (for example, DirecTV's $10 "Advanced Receiver Service-HD") . For some viewers, they got an HD set to get a sleek flat screen, not because they were hankering for a sharper picture.

The third point is one a distributor can and should fix since it leads to a suboptimal consumer experience. For years, Cablevision followed a strategy of always tuning an HD box connected to an HD set to the HD feed, irrespective of the channel tuned by the consumer (e.g., if NBC is on channel 4 and NBC HD is on channel 704, the HD box would display the HD feed even if the consumer tuned to channel 4; note the HD logos on the low channels on its Woodbury, N.Y. channel lineup). Lately, I have noticed that Time Warner Cable in Manhattan is doing the same thing with respect to at least some of the channels (e.g., NBC, Fox, ABC, Syfy, FX, but not MSNBC or Oxygen).

Providing the HD feed to customers watching the "SD" channel numbers is a start on addressing the remaining SD legacy issue -- the HD channels are up in the ozone while the SD channels are at the bottom of the dial. Someday the incumbent providers will invert the practice. In the short term, it represents an opportunity for an existing player or new entrant to reposition itself with consumers.