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Daily News

Success of Digital Cable-Ready TVs in Question
Jul 21, 2004
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As of this month, consumers in the market for high-end television sets have a new option: digital cable-ready (DCR) TVs. These models accept a small "CableCARD" that allows them receive digital television signals from a cable provider without the need for a set-top box.

After customers purchase their TV, they contact their local cable service operator for the proprietary digital cable card. According to New York, U.S.-based research firm ABI Research, this should mean lowered costs for cable companies and for consumers, but higher customer service efforts on the part of retailers and MSOs.

According to Vamsi Sistla, director of broadband research at ABI Research, the consumer electronics industry is bullish in its sales estimates, expecting to move a million of the new models by the end of this year. Mr. Sistla, however, is more cautious, forecasting sales somewhat below that figure.

Why the caution? This first generation of DCR TVs and cards only offers one-way communication, but high-end consumers want to have interactive features. Says Mr. Sistla: "By the end of next year or mid-2006, you will probably see two-way, cable-ready TVs that pave the way for mass adoption.

According to Mr. Sistla, vendors should start to invest in advertising and marketing collateral to educate the consumer. "With proper marketing strategies between the MSOs and the CE vendors, the cable industry could pump new energy into this market in the U.S," he says.

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