The document discusses the financial obstacles and technical issues surrounding the adoption of high-definition television (HDTV). It notes that producing and distributing HD content requires expensive new equipment for producers. Consumers also face high costs to upgrade televisions and playback devices. Additionally, transmitting uncompressed HD content is difficult given bandwidth limitations, and compression reduces quality. There is also consumer confusion around HDTV technology and formats. Overall, the document analyzes the market factors hindering wider production and adoption of HDTV.

1. TeaTree Systems by Drew Kessler April 19th, 2010 Drew Kessler Daniel Zhao Bill Wenrich Michael Chamberlain HDTV:Switching Costs and Obstacles to Adoption

2. Agenda Financial Obstacles to HDTV adoption Producer Consumer Unaddressed Technical Issues Production of HD content Distribution of HD content Consumer Reactions to the Marketplace Conclusion Questions 2

3. Financial Obstacles - Producer 3 Providing HD content includes a high switching cost Purchase of cameras, editing workstations, video displays. Increased requirements for data storage. Production of optical discs for distribution HD DVD lost the format war, but has an established user base DVD production facilities require significant adjustments to manufacture BluRay discs.

4. Financial Obstacles - Consumer 4 Full adoption requires investment into consumer electronics Consumer electronics have a short time to obsolescence New television, video player, video discs Amateur production also has a high barrier to entry Demands a new camera and editing software. Space for storing HD content on a computer is quickly exhausted Not possible to burn a BluRay disc for distribution

5. Unaddressed Technical Issues 5 Methods of transmitting HD content BluRay discs provide high-quality content but require a compatible player Bandwidth for broadcast content is limited Consumers cannot make a BluRay disc Compression HD content takes over two times the bandwidth of SD Impossible to transmit large amounts of uncompressed HD over existing networks Compression reduces size, but introduces significant loss in quality

6. Consumer Reactions to the Market 6 Purchase of HDTVs has increased as price goes down and the technology matures. Given the recent format war, there is still apprehension about short cycles of obsolescence. Confusing terminology HDTV and Digital TV sometimes incorrectly used interchangeably Uncertainty among consumers about whether they need an HDTV for the switch to digital broadcast television Differences between HDTV televisions 1080p, 1080i, 720p LCD, Plasma, DLP,

7. Conclusion 7 Market factors hinder production of HD content and the adoption of HDTVs. Consumers are wary of the rapidly-changing market. Compression is necessary for HD broadcasts, even though it reduces quality. There are no provisions for consumers to share their amateur productionson optical media. There is confusion about the benefits, costs, and justifications of owning an HDTV.

8. TeaTree Systems Drew Kessler Daniel Zhao Bill Wenrich Michael Chamberlain Questions? 8

9. References 9 Dupagne, M and Seel, P.B., “High-Definition Television A global Perspective,” Iowa State University Press, 1998 http://www.lacitycollege.edu/academic/departments/cinema/images/StudioB2web.jpg http://www.sustainabilityninja.com/wp-content/uploads/2009/03/plasma-tv.jpg http://www.hnm.gr/ns1/images/stories/rokproduct/Blu-Ray-Logo.svg.png http://www.pcworld.com/article/144800/is_hdtv_compression_damaging_picture_quality.html http://www.widemovies.com/directvcomp.html http://en.wikipedia.org/wiki/File:Common_Video_Resolutions_2.svg http://www.pcmag.com/article2/0,2817,1899844,00.asp http://www.pcworld.com/article/144800/is_hdtv_compression_damaging_picture_quality.html