SLOW START IS ANTICIPATED FOR DIGITAL TV PRODUCTS: MARKETING PLANS BEING MADE FOR LATE '98 INTROS OF EXPENSIVE NEW TECHNOLOGY

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Digital TV is the future-maybe. But it certainly isn't the present.

Though TV-set makers are preparing major marketing campaigns to position themselves for the fourth-quarter launch of DTV, no one expects significant sales in 1998.

Industry executives estimate they will sell 20,000 DTVs this year-less than one-10th of 1% of the 26.2 million TV sets the Consumer Electronics Manufacturers Association forecasts will be sold in the U.S.

LESS THAN 100,000 TO BE SOLD

James Meyer, exec VP of No. 1 set marketer Thomson Consumer Electronics, predicted "more than 20,000 but less than 100,000" will be sold in the first year.

He estimates sales of converter boxes will reach six figures the first year out; the $600 to $700 boxes, appearing in 1999, will convert an analog TV to DTV, though with a picture that is inferior to a that of a top-end DTV set.

Sales generally will be limited to affluent early adopters. Initial sets, such as Thomson's 61-inch high-definition TV, are expected to cost about $7,000. And most programming for now will remain analog.

"HDTV could well become the status symbol of 1998 and 1999," Mr. Meyer said at last week's International Consumer Electronics Show in Las Vegas.

The Thomson executive promised heavy fourth-quarter HDTV promotion, via agency Ammirati Puris Lintas, New York.

James Palumbo, Sony Electronics' senior VP-television products, said Sony's entry, the FD Trinitron Vega, "will be the foundation of all our [marketing and promotional] plans this fall."

Lowe & Partners/SMS, New York, is the Sony agency.

PHILIPS AS DIGITAL LEADER

Philips Consumer Electronics, which last year doubled U.S. ad spending to an estimated more than $100 million to become the No. 1 spender, also is likely to feature DTV in ads, following its strategy of using low-volume innovative products to position itself as a digital leader.

Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, handles Philips.

Some industry players said the 1999 Super Bowl will be broadcast digitally to use the big TV event to give DTV a promotional boost.

The National Football League is negotiating with U.S. networks for a new four-year contract starting next season. Japanese network NHK will broadcast this month's Super Bowl in HDTV for Japan.

DTV faces significant marketing hurdles: There could be confusion over the difference between DTV, the general term, and HDTV, the most refined form of DTV. The Consumer Electronics Manufacturers Association last week debuted a DTV logo but some marketers will promote HDTV.

INTERACTIVE APPLIANCE

"The great picture is probably not enough" as a selling point, said Todd Thibodeaux, CEMA VP-senior economist. He suggested marketers may be better off positioning DTV to consumers as an interactive appliance.

Consumers are "more intrigued by the idea of turning a dumb box into a smart box," he said.

The Federal Communications Commission initially set 2006 as the target for broadcasters to turn off analog signals, making current TVs obsolete for receiving a broadcast signal. But only 30% of households will own a DTV in 2006, with the number rising to 75% by 2012, Mr. Thibodeaux estimated. That makes the 2006 goal seem unrealistic.

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