Magid Morning Facts™ - 4/25/2008

Magid Research: HD-Set Adoption Surges 25% Over The Holidays
A recent study of consumers across the U.S. indicates that 25% of U.S. households (28 million) now have at least one HDTV set, up from 20% in September 2007. During the 2007-08 holiday and Super Bowl season this year, 5.5 million households brought home an HDTV set for the first time. The study, conducted by Frank N. Magid Associates shortly after Super Bowl XLII, discovered that an impressive three million homes added a second HDTV during this same period, bringing multiple HDTV-set-homes up to nearly 10 million.

“Consumers who become accustomed to the sleek and contemporary appearance of their first HD set are now looking to bring that benefit into other rooms in their home,” says Maryann Baldwin, vice president, Magid Media Futures™. “However, owning an HDTV set and actually viewing HD are still two very different pursuits for many.”

In households with at least one HDTV set, the number who have taken steps to arrange for HD programming reception holds steady compared with other recent Magid studies, at 70%. Among the 30% of HDTV set owners who have not made these arrangements, many cite perceived service costs and a limited number of channels available in high definition. Satellite customers make up half of this group, and most of them say they are not prepared to purchase the new equipment necessary to add HD service.

In the study, conducted with over 1,200 adults 21 and older, only 3% of respondents said their household has an HDTV set that receives HD programming from their local stations via an over-the-air via antenna. This is a surprisingly small group given that those with HDTV sets could at least add free, over-the-air HD reception to their sets through the purchase of an inexpensive digital receiver and antenna.

As HDTV set price points continue to fall, younger adults are buying HDTV sets at a faster pace. The research shows that, among adults ages 21 to 34 who made an HDTV set purchase in the past year, 28% say they did so to connect it to a high-definition video game console like the Xbox 360 or PlayStation 3.

“Now that HDTV set purchases have moved into the early majority phase of adoption, the demographic makeup of the HD population is looking more like the overall U.S. TV viewing universe,” says Jill Rosengard Hill, vice president and managing director at Frank N. Magid Associates.

The accelerated rate of HD adoption appears poised to continue. Not only do three in ten households plan to purchase a new TV in the next year, nearly all of them say they will buy an HDTV set when they do make that purchase. The demand this year is driven by both the continuing decline in HD set prices and the mistaken belief among some consumers that the digital television transition slated for February 2009 requires that consumers actually purchase a set capable of displaying high definition.

Current HD owners will also drive continued demand for HD sets. Nearly four in ten current HDTV set owners plan to purchase yet another HDTV set in the next 12 months.

The findings also show that 24% of those who do not currently own an HDTV set feel it is important that they will be able to watch the 2008 Summer Olympic Games in high definition, another driver that could lead to higher–than–normal–second quarter TV sales, a quarter typically known for its slow TV-purchase activity.

While few said the Super Bowl drove their purchase intent, 25% of U.S. households (a third of all Super Bowl viewers) watched at least some portion of the matchup between the New York Giants and the New England Patriots in high definition, nearly all viewing in their own home or in the home of a friend or family member.

Frank N. Magid Associates conducted this online research among 1,235 consumers nationally representative of the U.S. online population, ages 21 and older. A more detailed written report on the study is now available for purchase. Contact Jill Rosengard Hill at 212-515-4523 or Jrosengardhill@magid.com.

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