It really wasn’t that long ago that NHK, CBS, and NBC were using the Olympics solely as promotional opportunities to advance the promise of HDTV. Expensive production equipment, no viewers, and an uncertain technological and political future led some to believe it would be the biggest boondoggle ever of TV broadcasting and consumer electronics. The occasion of the sports spectacular is a good opportunity to see how successful HDTV and digital television have become, as we consider some recent headlines.

Aldo Cugnini
Analyst

• More than 5.5 million households purchased an HDTV set for the first time during the 2007-2008 holiday / Super Bowl season, according to a Frank N. Magid survey. The online survey found that 25% of all American households (about 28 million) are now equipped with at least one HDTV set, and that more than 3 million homes added a second HDTV ahead of Super Bowl XLII in February. That means that almost 10 million American households now have two or more HDTVs. The survey also showed that 24% of those who did not own an HDTV set wanted to be able to watch the 2008 Olympics in HD.
• Shipments of integrated digital TVs will grow to 143 million in 2013, according to IMS Research, more than double the 52 million that were shipped in 2007. Similarly, the CEA estimates that 50% of U.S. households already have digital televisions, and that by the end of 2008, more than 50% will have HDTVs. CEA’s Chris Ely says that the end of analog broadcasts and lower prices are the driving forces that have led to "many consumers deciding to upgrade their televisions."
• The two largest U.S. electronics retailers, Best Buy and Circuit City, both said flat-screen TV sales increased for the quarter ended May 30, on more demand for digital television. Circuit City also had more HDTV demand, reporting that same-store sales for flat-panel TVs increased almost 10%. In addition, worldwide TV sales for Q1′08 increased 8% from a year earlier to $24.8 billion, as customers bought more LCD TVs, according to DisplaySearch, who said the increase in TV sales also prevented the companies from suffering further earnings declines.

• More than 4 billion viewers worldwide are expected to watch the 2008 Olympics games on NBC and its various sister networks. The network will be producing 3,600 hours of Olympic coverage (including 2,900 hours of live coverage), totally in high definition, with 5.1 discrete channels of audio, and to be displayed in HD on NBC HD, Universal-HD and USA HD.
• NBC has claimed more than $1 billion in advertising revenue for the Summer Games and spent $894 million to acquire the U.S. broadcast and digital rights — and viewership so far is surpassing expectations. The spectacular Olympic opening night in Beijing was the most-viewed and highest-rated non-U.S. Summer Olympics opening ceremony ever, according to The Hollywood Reporter, averaging 34.2 million viewers and receiving an 18.6 national household rating. Also, Saturday night’s sports coverage averaged 24.1 million viewers, beating Athens in 2004, and ranking as the highest first night of competition since Barcelona in 1992. At least 63% of China’s total viewing audience watched the opening ceremonies, at 393 million viewers.
• NBC also plans more than 2,200 hours of live coverage on NBCOlympics.com. NBC’s Web site saw its most traffic ever on Friday, with 70 million page views, 10 times more than the opening day of the Athens Games.

So this Monday morning quarterback makes these observations: The digital transition is motivating the market to "leave no viewer behind." Economic conditions notwithstanding, consumers still have discretionary income, and they are choosing to spend it on home entertainment. Although US-China political tensions have probably added viewership to the Olympic games, sports entertainment will always be a prime driver for TV and HDTV viewing. This market looks good.

Now, if I could just find a 42" HDTV that fits my budget…