One of the most important ingredients in setting up a movie theater experience in the home is recreating the big-screen experience on a local level. Fortunately, the consumer electronics industry has never been better equipped to deliver that part of the equation, and at a broad range of price options.

In 1998, the U.S. began to transition to digital television (DTV) broadcasting that today is presenting an impressive selection of high-definition television programs through broadcast, cable and satellite and prepackaged video sources. Viewable on a special class of HDTV sets and monitors, these images offer vastly superior resolution to traditional analog sets. The majority of DTVs also add wide screens with 16:9 aspect ratios that are perfect for viewing those Cinemascope classics that have been cropped and chopped for years to fit the squarish 4:3 aspect ratio of traditional screens.

Initially, DTV prices were high, limiting sales to a handful of elite early adopters. But in recent years, strong competition fostered by a pending government mandate to end analog TV broadcasts, has helped drive the entry price for a DTV below $1,000.

For a limited time now, consumers who want better bargains also can purchase analog big-screen TVs (with lesser picture or sound quality than digital models) for hundreds of dollars less.

Source: CEA Market Research, 1/05

However, purchasers of these models should keep in mind that they may need a set-top digital-to-analog decoder box to continue receiving TV signals when broadcasters stop sending analog signals sometime after Jan. 1, 2007, when analog broadcasts are tentatively scheduled to end.

CEA market research forecasts that during 2005 the industry will sell more than 20 million DTV products, generating $19.2 billion in wholesale dollar volume. Sales of DTVs exceeded CEA forecasts in 2004, with shipments totaling 7.3 million units. More than 9 percent of U.S. households had a DTV at the end of 2004, according to CEA estimates. That is expected to climb to 12 percent in 2005.

Digital TV Prices Decline

Since the launch of DTV, the average price for a set has fallen dramatically. In 1998 the average DTV price was $3,147, while in 2004 the average selling price dropped to $1,458. This year, CEA expects the average DTV price to plummet to $950, as government DTV tuner mandates force digital reception capability into a majority of color television models.

In recent years, consumers have been casting their voting dollars for DTV displays that have widescreen 16:9 aspect ratios. By the end of 2004, some 71 percent of all DTVs sold had widescreen sizes. For 2005, CEA expects that percentage to dip to 70 percent as a new class of entry-level consumers enter the market looking for lower-cost DTVs that typically offer 4:3 direct view CRT screens.