January 8, 2003

The winter edition of the annual Consumer Electronics Show begins Thursday in Las Vegas, and, judging only by the number of hotels reporting 100 percent occupancy, it could be the most interesting such gathering in years. Last January, of course, the lingering effects of 9-11 and its impact on the economy, dampened spirits considerably.

If anything, the hands on the Doomsday Clock have moved closer to midnight in the ensuing 12 months. For some reason, though, interest in all things digital continues to rise.

When the going gets tough, the tough go shopping.

I'm only guessing here, but it would seem as if Americans would much rather go on a six-month buying binge than engage in a war against a pair of lunatics who don't seem frightened by the very real possibility of Armageddon. Kim Jong Il and Saddam Hussein probably sat down together with a bootleg copy of The Sum of All Fears - separate Iraqi and Korean dialogue tracks, natch -- and reasoned, "If Ben Affleck can walk away from a nuclear disaster and get a hot babe like J Lo, to boot, what's to worry?"

Let's hope George Bush doesn't find the stash of John Wayne cassettes Ronald Reagan left behind in the Oval Office.

Besides the fact that it's going to be impossible to find a rental car this weekend, I'm inclined to be optimistic about the future of the consumer-electronics industry because I walked in the home of average Americans two weeks ago and discovered them actually watching a big, hairy, wide-screen, high-definition television set. I had been writing about the inevitability of just such a tech sighting for so long - with nothing to show for it - that I'd given up hope of finding an HDTV monitor anywhere less chi-chi than the Lodge at Pebble Beach.

But, there it was.

Naturally, it being the week between Christmas and New Year's Day, the 60-inch rear-projection video monitor was overflowing with the backsides of athletes playing football in a full-blown rainstorm. At first, I was able to resist the temptation to join the gang reclining on a wrap-around couch, but, before too long, the siren's song emanating from the giant rectangular eye in the living room beckoned me hither.

After only a few minutes in front of this set, I was struck by how normal the viewing experience seemed to be. As my initial giddiness subsided, I was able to revert back to my habitual viewing mode: prone on the couch, brain on cruise control, hand within twitching distance of the remote control.

After watching far too many dropped passes and thrusts up the middle, I focused my attention on such crucial aspects of the game as the diverse array of tattoos on display, the depth of the puddles on the field and the effect of continuous precipitation on a cheerleader's jersey. It was here that HD came alive.

The proud owners of this hulking appliance - it easily took up a third of the living room - told me that, despite the high cost, they weren't completely sold on HDTV programming. Cox Cable had offered them a special introductory deal on the translator equipment, and, as yet, they were unsure about renewing the contract.

Simply put, there simply isn't enough original programming being offered in HD to justify the cost of premium service. They do, however, absolutely love the way DVD movies look on the big, wide screen.

And, that's why I think this could be the year HDTV finds a tentative foothold in the long vertical climb to consumer acceptance.

The killer app for HDTV won't, as long predicted, be sports. It will be movies.

The explosive growth of DVD among middle-class consumers almost certainly will have a giant halo effect on sales of high-res wide-screen monitors. When hardware prices ultimately drop to relatively affordable levels, fence-straddling buyers might also bite the bullet and pay the premium for various HD options. The networks and local broadcast outlets, then, will be dragged kicking and screaming into the future.

If they resist, viewers might simply use their new electronic toy to watch DVD and satellite-delivered movies, adventurous premium cable series programming and the NFL package from DirecTV. Once the network habit is broken, it will be difficult to mend.

I could be wrong, but one recently released statistic tells me I'm barking up the right tree, for once.

Satellite TV penetration in the first half of 2002 was up 9.3 percent, compared with a rise of only 1 percent over the same period for cable. DBS companies now service 21.1 million homes, still far less than the 68 million fed by cable, but the gap is eroding.

With DVD penetration reportedly in the 40 percent range, consumers eventually are going to stop tolerating inferior picture and audio quality when they watch movies. Nor do I think anyone will pay good money to watch downloaded PPV flicks on a computer monitor any time soon.

Even the best available technology will have to improve exponentially; cable's idea of crisp broadband delivery is a joke. Meanwhile, the studios might consider working on an inexpensive way for customers to download all those special bonus features people now expect on DVDs.

Content will drive sales, and, right now, Hollywood is in control of the content people will pay a premium to see, whether it's Lord of the Rings or The Sopranos.

Instead of buying bargain-rate cable networks and turning them into repositories for reruns and moronic talk shows, the networks ought to consider stealing some of HBO's thunder by putting on something intelligent, or, at least, R-rated. As long as they remain less concerned with quality than on the insatiable demands of shareholders, their audience will keep tuning them out.

Speaking of which, wouldn't it be nice if NBC handed CNBC or MSNBC to Robert Redford for the Sundance documentary channel he proposed last year? Anything's better than watching Phil Donahue and Chris Matthews back-to-back.

 

EMAIL GARY DRETZKA