A High-Tech, High-Stakes HDTV Gamble

February 17, 1989

Report Outline
Special Focus

Introduction

High-definition television is touted as the entertainment breakthrough of the 1990s. Giant screens with twice the sharpness of current sets, richer colors and compact-disc quality sound to boot—the prospect has some consumers fingering their remote-control buttons in anticipation. But if HDTV has couch potatoes on edge, ready to shell out $2,500 or more for the first generation of sets, it has much of the U.S. communications and electronics industries in a tizzy. American business is so far behind in developing HDTV that it may never be able to catch up. At stake, quite simply, are billions of dollars in potential profits. But the risks are high, too, and may not be worth taking.

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Overview

The problem is a familiar one: Japan has a clear lead in the race to provide high-definition television to the world. The Japan Broadcasting Corp. (NHK) plans to introduce three HDTV channels, broadcast from its own satellite, next year. Even Europe has an uncharacteristic jump on the United States. Last October, France launched a satellite capable of transmitting HDTV signals, and a European consortium of telecommunications agencies will launch a similar satellite this year. Meanwhile, U.S. broadcasters and the Federal Communications Commission haven't even agreed on technical standards for implementing the new technology.

The United States is even further behind in building HDTV receivers and camera equipment, and that is where the money is to be made in HDTV. While Sony has been selling cameras and other HDTV production equipment since 1983, and is reportedly planning to mass-produce receivers sometime in 1991, U.S. companies are only talking about it. And the United States is not well positioned to make a serious bid to catch up. Due to a wave of sell-offs in the 1960s and '70s, there is only one major American-owned TV manufacturer still in business—Zenith—and it is pursuing only limited research in developing HDTV receivers.

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