Banyo High Definition Television (HDTV) Market Analysis


 


The company Banyo is interested in finding out more about the possible adoption process of High Definition Televisions (HDTVs). A market analysis is to be accomplish with a forecast of the demand for HDTV from period 1992 to 2006.


 


HDTV Background


High-definition television (HDTV) is a television broadcasting system with a significantly higher resolution than traditional formats allow. This technology was first introduced in the USA during the 1990s, by the Digital Grand Alliance (1995).


 


HDTV is the biggest breakthrough in broadcasting since color TV. It offers wider pictures with greater detail and the clarity of motion pictures. Compared to standard television (NTSC), the true HDTV image has twice the luminance definition – vertically and horizontally – and is twenty-five percent wider. Standard television aspect ratio is 4:3 (four units wide, three units high) – the HDTV aspect ratio is 16:9. The 16:9 ratio is much closer to the average wide-screen image shown in movie theaters. The biggest difference, and the greatest appeal of HDTV, is its clarity. True HDTV pictures are composed of 1080 active lines (1125 total) whereas current standard television pictures are composed of only 486 active lines (525 total). While it is possible to see the lines that make up standard television pictures, HDTV lines are not at all noticeable. The fine-grained HD picture contains five times more information than does the standard television picture and is accompanied by multi-channel, CD quality sound. The difference in video and sound quality is dramatic.


 


High-definition television (HDTV) offers a much better picture quality than standard television. HD’s greater clarity means the picture on screen is less blurred and less fuzzy. HD also brings other benefits – smoother motion, richer and more natural colors, surround sound and the chance for different equipment to work better together.


 


Pessimistic Scenarios


Pessimistic scenarios emphasize potential negative implications on the introduction of High Definition Television in the US. Japan’s previous experience with its aggressive promotion of HDTV standard for analogue systems indicates substantial risks involved: a premature bet on a standard that fails to succeed could very well produce a negative lock-in effect.


 


In addition, the US economy decline would adversely affect the sales of HDTV in the US. People having no confident with the presidential elections would likely to cause a decline in the economy. As a result a decline in the economy also would happen. When there is an economy decline, people are usually to spend less. People would spend wisely with what is more important than on HDTV.


In some ways government limitations like taxes could further decline the market performance of the introduction of HDTV since there would be less numbers of the product available for the market. Without the support also of the US government could lead to disastrous results of the introduction of HDTV in the US. Moreover, broadcasting companies may not be willing to invest on new technology.  US consumers also are uninterested with purchasing HDTV.


 


Average Scenarios


US consumers accepted the new technology being introduced and there is a running change of old TV set to HDTV initially replacing the televisions set. In addition, US Congress considers the introduction of HDTV in the US market.


 


Optimistic Scenarios


Nearly half of all consumers plan to make their next television purchase a high-definition (HDTV) television set, according to a new consumer survey released by the Consumer Electronics Association (CEA) today. Consumers are looking for more quality entertainment which HDTV has answered.


 


Following the introduction of HDTV to the film industry, interest began to build in developing an HDTV system for commercial broadcasting. Such a system would have roughly double the number of vertical lines and horizontal lines when compared to conventional systems.


 


Government support such as funding to the manufacturer and the broadcast companies would boost the acceptance of the HDTV since companies are willing to invest due to government support.  


 


Forecast



Assumption


 


Scenario I – Pessimistic


People not willing to buy during launching, therefore p is low and at the mean time, q is low as there is no reference group.


p          0.041


q          0.102


N         98


 


Scenario II – Average


p          0.059


q          0.146


N         98


 


Scenario III – Optimistic


People buy based on their knowledge and they prefer a better quality of TV to watch the program. Therefore, p is higher than average.


p          0.077


q          0.146


N         98


 



 


Time


Theoretical


Time


Pess


Ave


Optimis


Observed


Forecasts


 


N


 


p


q


p


q


p


q


N


Pess


Ave


Optimis


1965


87.2703606


1992


0.041


0.102


0.059


0.146


0.077


0.146


80


3.28000952


4.72001357


6.16001076


1966


125.139266


3


0.041


0.102


0.059


0.146


0.077


0.146


115


4.71500461


6.78500657


8.85500521


1967


164.727037


4


0.041


0.102


0.059


0.146


0.077


0.146


170


6.97000211


10.030003


13.0900024


1968


190.407646


5


0.041


0.102


0.059


0.146


0.077


0.146


190


7.79000169


11.2100024


14.6300019


1969


182.661433


6


0.041


0.102


0.059


0.146


0.077


0.146


185


7.58500178


10.9150025


14.245002


1970


137.509386


7


0.041


0.102


0.059


0.146


0.077


0.146


125


5.1250039


7.37500556


9.62500441


1971


79.1481686


8


0.041


0.102


0.059


0.146


0.077


0.146


75


3.07501083


4.42501544


5.77501224


1972


36.0643194


9


0.041


0.102


0.059


0.146


0.077


0.146


40


1.64003803


2.36005418


3.08004297


1973


14.1329353


2000


0.041


0.102


0.059


0.146


0.077


0.146


20


0.82015172


1.18021591


1.54017124


1974


5.14573587


1


0.041


0.102


0.059


0.146


0.077


0.146


8


0.32894097


0.47333457


0.61705845


1975


1.81862594


2


0.041


0.102


0.059


0.146


0.077


0.146


5


0.20739022


0.29837838


0.38767941


1976


0.63573497


3


0.041


0.102


0.059


0.146


0.077


0.146


4


0.16771528


0.24123903


0.31215509


1977


0.22136945


4


0.041


0.102


0.059


0.146


0.077


0.146


3


0.12954733


0.18619622


0.23829356


1978


0.07697809


5


0.041


0.102


0.059


0.146


0.077


0.146


2


0.09647225


0.13816225


0.16999075


1979


0.02675533


2006


0.041


0.102


0.059


0.146


0.077


0.146


1


0.095778


0.133298


0.135926


 


The observed N is derived from bass solver.xls computation while results of the pessimistic (pess), average (ave) and optimistic (optimis) are calculated on the formula = (pN)+(q-p)*(N-q)/(N(N)^2).  As shown in the graphical illustration below, the computations are in accordance with bass diffusion model with optimistic economic scenarios deriving the higher sales position due to positive economic support to the HDTV innovation.


 


 



Credit:ivythesis.typepad.com



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