Polk Verity Unveils 2000 DTV Consumer Electronics Monitor Report Research Findings

27-Apr-00

According to the most recent Consumer Electronic Monitor study on digital television (DTV) conducted by Polk Verity, the battle to ""digitize"" the public has progressed slowly due to lack of programming, consumer and dealer confusion and pricing considerations. ""Awareness of DTV has increased significantly from only one year ago,"" said David Larson, Vice President of Market Research for Polk Verity. ""Compared to Polk Verity's Spring 1999 survey, 80 percent of consumers now believe digital television will replace analog in the near future. However, consumers still appear hesitant to embrace the technology.""Polk Verity's most recent ""Monitor DTV,"" conducted in February 2000,was comprised of 750 interviews with consumers ages 18 and over who were screened for digital television awareness and 350 interviews with retail dealers of consumer electronics products, who carry DTV equipment. The survey was constructed using a national probability sample, representative of the top 50 Designated Market Areas (DMAs) with a specific focus on the top 17 DMAs. Consumer Findings While adoption of digital television has progressed slowly, awareness has increased significantly. In Polk Verity's March 2000 study, 73 percent of consumers indicated awareness of DTV/HDTV, up from only 48 percent in Spring of 1999. Of those consumers who were aware of the technology, only one in 20 said they own a DTV. With the new digital products entering the market, home theaters are becoming more prevalent: almost one quarter of consumers said they currently own a theatre system with a minimum of five speakers. Interestingly, many consumers in our survey (47 percent) said they would have little or no interest in purchasing a digital television in the next two years, yet a whopping 70 percent indicated their next television purchase would be some form of digital. The overall purchase consideration level stayed nearly the same as our Spring 1999 survey. When shopping for digital televisions, consumers said they would prefer Sony (29 percent), Zenith (9 percent) and Mitsubishi (7 percent) among competing brands.Early adopters are clearly confused about digital technology and the necessary equipment they need in order to view high definition programming. Almost half of current DTV owners said they do not own or do not know if they own, a digital decoder. Furthermore, the lack of high definition programming and consumer knowledge has impeded the widescale acceptance of DTV. As proof, the majority of consumers (69 percent) cannot name a single program broadcast in high definition. Dealer Findings Digital television products are becoming more prevalent among dealers. Our findings indicate that 91 percent of dealers carry digital-ready televisions. However, many consumers cannot purchase digital decoders at the same store. Only 58 percent of dealers carry digital TV decoders. Among DTV features, dealers felt their customers were most interested in ""flatscreen"" (70 percent said their customers would be ""interested"" or ""very interested""), followed by ""widescreen"" (69 percent) and ""digital signal decoders"" (68 percent). While six percent of dealers indicated they did not have a ""best seller,"" those who did have best sellers most often mentioned Mitsubishi (80 percent of those who carry brand), Hitachi (72 percent) and Toshiba (70 percent). These brands also received the most praise from dealers when recommending the brands to customers and when considering purchasing the brand personally. Comparative Findings: Consumer Vs. Dealer Overall, dealer interest in carrying digital television products is much higher than consumer interest in purchasing those products. Nearly half of consumers have little or no interest in purchasing a DTV, while a majority of dealers who do not carry digital-ready or integrated HDTV units said they would be ""interested"" or ""very interested"" in carrying such products.Dealers and consumers disagreed on the importance of ""brand name"" when shopping for DTV: only 51 percent of consumers said this factor was ""important"" or ""very important"" while 76 percent of dealers believed brand name was ""important"" or ""very important"" for their customers.With regard to pricing, the median price at which dealers believe most consumers begin buying digital televisions is $1,800. However, consumers indicated the most they would be willing to pay for a digital television was $1,200, 50 percent less than dealers' perception, and 525 percent lower than the actual current median price of digital televisions.DTV Consumer Segmentation In general, products utilizing digital technology are new to the mainstream electronics consumer. Using segmentation analysis, Polk Verity has identified four key consumer segments in the DTV market: Technology Groupies (high interest in all technologies) - Groupies are the ""first on the block"" to adopt new technologies and represent the early majority of DTV buyers.Old School (price conscious) - Generally older demographically, less technically savvy and place a low value on electronics in general. Value conscious and traditional, are two words that accurately reflect this market segment.DTV Pragmatists (price indifferent) - DTV Pragmatists tend to have more disposable income and are less likely to be concerned with price. This segment would be great early adopter candidates for DTV, except for the fact that they have generally low interest in electronics. DTV Connoisseurs (high interest in specialty brands) - All report low purchase interest, Internet usage and interest in interactive features. However, of those that own, all own the same brand of DTV.Polk is a global company, delivering multi-dimensional marketing information solutions to the automotive industry to enhance the relationships consumers have with brands. Through lifetime understanding of individuals, Polk helps its clients maintain current customers, win new ones and build their brand loyalty. The company has served the automotive industry for 78 years and is the longest-standing steward of automobile records in the United States. Founded in Detroit in 1870, Polk launched its motor vehicle statistical operations in 1922 when the first car registration reports were published. It now serves nearly every segment of the motor vehicle industry as an analytical consultant and statistician, a provider of database-marketing services, a supplier of vehicle histories and a data enabler for geographic information systems. Based in Southfield, Michigan, Polk is a privately held firm that employs more than 2,500 people worldwide, currently operating in Australia, Canada, China, France, Germany, Holland, Spain, the United Kingdom and the United States.For more information, visit the Polk Web site at www.polk.com.

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