HD Sets to Comprise Majority Of Total Set Unit Sales for First Time in 2006, Says Kagan Research

February 16, 2006

A new study from Kagan Research, THE STATE OF HIGH DEFINITION TELEVISION 2006, forecasts nearly 20 mil. HD sets will be sold to US consumers in 2006, and estimates 104 mil. cumulative HD sets will be sold to consumers by 2008, resulting in 78 mil. HD households. An essential factor in HD set adoption is price. According to Kagan Associate Analyst Patrick Johnson, "We project the average price of an HD set will decline some 38% by 2010, reducing the average price to $1,139. Rapid price declines, coupled with increasing levels of HD programming, will drive the number of HD households to 97 mil. in 2010, penetrating more than 82% of total TVHH." With more than 1,500 of the 1,749 full-power TV stations in the U.S. broadcasting in digital as of December 31, 2005, HD set sales now constituting some 85% of digital TV sales and a February 2009 hard date signed into law, the HDTV supply chain is ramping up. Kagan's annual edition of THE STATE OF HIGH DEFINITION TELEVISION 2006 provides an in-depth look at programming strategies, regulatory issues regarding the transition to digital and 10-year forecasts for high-definition DVDs, digital sets, HD sets, and HD subscribers for both cable and satellite operators. Relevant industry statistics and exclusive projections based on Kagan's respected forecasting model include: -- The number of cable HD subs grew from 2.3 mil. in 2004 to 3.8 mil in 2005. At the end of this year, Kagan estimates this figure will grow to 6.6 mil. and by 2010, the number of cable HD subs will surpass 30 mil. -- The number of DBS HD subs in 2005 reached 1.8 mil. DIRECTV's rollout of four additional satellites as well as EchoStar's and DIRECTV's commitment to local HD programming will drive HD subscriptions and by 2010 Kagan projects there will be nearly 19 mil. HD subscribers. -- Kagan estimates that just 1.7 mil. of the sets purchased by OTA households this year will be digital. THE STATE OF HIGH DEFINITION TELEVISION 2006 is a detailed and forward-looking report that breaks out HD set sales from other types of digital sets; provides exclusive 10-year projections for the number of cable and DBS HD subs, both tier and non-tier; and allocates the number of digital sets sold to consumers each year among subscribers to cable and satellite platforms, as well as those relying solely on OTA broadcasts. For table of contents and more information on THE STATE OF HIGH DEFINITION TELEVISION 2006 go to www.kagan.com/HDTV-2 About Kagan Research, LLC. Kagan Research consulting and publishing services offer exclusive financial data and analysis, relevant market advisories and expert 5- to 10-year projections on cable and DBS, broadcast television and radio, movies, entertainment and sports, digital, wireless and Internet technologies and media finance and law.

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