High Definition Hyped, But Many Consumers Remain Wary

New York, NY -- While 90% of all Americans have heard of high definition television (HDTV), only 47% say they know anything substantial about it, and just 15% say they are somewhat or very likely to get HDTV--all reflecting basically unchanged levels over the past year, according to the latest research from Ipsos Insight, the global market research firm.

"Advertisers and marketers clearly have to take the initiative to expand the base of consumers who understand HDTV's features and benefits, in order to convert them into buyers," said Todd Board, leader of Ipsos Insight's Technology & Communications practice. "Especially when you consider that the number of people who are substantially aware of HDTV hasn't changed since 2004."

"Awareness levels have topped out as the range of HDTV-related technology products and services are promoted by manufacturers, networks, and cable and satellite service providers," Board said. "We have seen some degree of growth in HDTV penetration in the U.S.--varying estimates tend to center around an installed base of about 15MM at this point. That said, we see both need and opportunity to develop the market beyond the early adopter stage, to create mainstream momentum."

"Among the fairly static group of U.S. consumers that report familiarity with HDTV in the past year, the perceived benefits have remained quite high," added Board. "The critical issue today is that many consumers know HDTV exists, but haven't been convinced that it offers enough benefit to justify replacing their current TVs. Some of the reluctance to become more familiar with HDTV may have to do with this `worth it' hurdle."

Board explains the `worth it' hurdle as the incremental benefit to the consumer, balanced against the cost and hassle of experiencing that benefit, including evaluating alternatives, learning how to use the new technology, and any 'hidden' costs like upgraded receiver boxes.

"The `worth it' hurdle impacts all new technologies, whether they're gimmicky or offer clearer benefits to the consumer," said Board. "The lack of growth in consumers' HDTV purchase intentions in the past three years suggests that the value proposition hasn't been made compelling enough to enough consumers yet. Marketers and advertisers who can get consumers over the `worth-it' hurdle will reap the benefits of this exciting new technology."

Most survey respondents familiar with HDTV recall having seen an ad for HDTV in the past month (84%), and three quarters (74%) have looked into the capability in store. An encouraging finding was that the proportion of consumers familiar with HDTV who perceive it as "too expensive" declined from 72% in 2004 to 66% in 2005, reflecting real price reductions.

Concluded Board, "At some point, the firms who have invested in this technology have to amortize that investment, and sooner or later that has to entail further reductions in price points that turn `theoretical' margin into actual margin."

Ipsos U.S. Express Research Methodology

These national survey research data were collected via Ipsos U.S. Express, a weekly national omnibus survey. Fieldwork was conducted between October 28 and 31, 2002, October 24 and 26, 2003, November 3 and 5, 2004, and November 29 and December 1, 2005. Data from 2005 are based on 511 telephone surveys taken with adults (18+) across the United States using regionally stratified random sampling. The survey results can be said to be within 177 4.3 percentage points of what they would have been had the entire adult population been surveyed. To ensure that our sample reflects the make-up of the American population, we weight the results to match the latest Current Population Survey provided by the U.S. Census Bureau.

For more information, please contact:

Todd Board Senior Vice President, Technology & Communications Practice Ipsos Insight 415.597.4013 [email protected]

or

Diane Johnson Special Consultant to Four Leaf Public Relations LLC 703.391.2056 [email protected]

About Ipsos Insight Ipsos Insight is a marketing research consultancy that provides solutions to Fortune 500 companies in the areas of market assessment, brand management, innovation and new product development. Our industry experts combine the discipline of marketing with the science of marketing research to offer expert consultation and strategic advice that builds powerful brands.

Our client service teams specialize in consumer products, technology, communications, health, pharmaceuticals, financial services, entertainment, retail, foodservice, agrifood, energy, utilities, and lottery and gaming. Ipsos Insight is an Ipsos company, a leading global survey-based market research group.

To learn more, please visit www.ipsosinsight.com.

About Ipsos Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world.

Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe.

Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2004, Ipsos generated global revenues of e605.6 million ($752.8 million U.S.). Visit www.ipsos.com to learn more about Ipsos' offerings and capabilities.