For HDTV, an Ad Campaign of Olympic Proportions

The 1964 Summer Games in Tokyo embraced so many television innovations -- color, live satellite feeds and slow-motion replays -- that they are known to media historians as the TV Olympics.

Forty years later, the backers of high-definition television would love the Athens Games to someday be known as the HDTV Olympics.

NBC plans to broadcast 399 hours of the Games in the digital format, and makers of HDTV sets are hoping that will produce a much-needed sales boost for a market that’s been slow to take off. After all, few things can motivate a couch potato to upgrade his set like a major sporting event.

“If someone tends to be in the market for a TV, we know from past experience that a Super Bowl will give them a reason to actually get out and buy one,” said Gene Kelsey, head of the brand strategy group at consumer electronics giant Panasonic.

Just ask Len Fruckt, a 58-year-old sports fanatic who purchased a sleek 50-inch HDTV made by Samsung Electronics Co. two months ago in anticipation of the Olympics. Unlike the 15-year-old Mitsubishi model that it replaced, the $3,000 Samsung set in his Lake Worth, Fla., den has a wide screen, stereo sound and ultra-crisp picture.

“It’s so clear that you can tell Astroturf from grass,” said Fruckt, who watched dozens of Florida Marlins baseball games on the new wide-screen TV while waiting for the opening ceremonies in Athens.

Although few, if any, studies have been published that link TV sales to sporting events, the anecdotal evidence of a nexus is overwhelming. For instance, when Plus Vision Corp. introduced a new HD projection television system right before a key 2002 World Cup soccer match, it had different return policies in Europe and the United States.

“They wanted to prevent people in Europe, where the event is so incredibly popular, from getting it for just that and returning it,” said Avi Greengart, who follows the consumer electronics industry for Jupiter Research in New York.

HDTV makers could use all the help the Olympics have to offer. Though the technology has been on the market for six years, only about 9% of U.S. homes have TVs that are capable of receiving high-definition broadcasts, according to the Consumer Electronics Assn., an industry trade group based in Arlington, Va.

In part, potential buyers have been alienated by turf wars over the technical standards behind high-definition broadcasts and drawn-out regulatory battles over when broadcasters would be required to offer programs in HD. Then there was the sticker shock: The first HDTV-capable sets came with $6,000 price tags, plus $1,700 for a receiver needed for true HD.

Today’s models range in price from $900 to more than $25,000, with an average retail price of $2,000, according to NPD Group, a market research firm in Port Washington, N.Y. To be considered a mass-market product, analysts predict, the price would have to drop to $1,000.

So far, Sony Corp. has sold the most plasma, liquid crystal and digital light processing TVs, the formats commonly used for HD. The Tokyo-based company has purchased so much commercial time to promote its wares during the Olympics that it is calling itself “the presenter” of NBC’s HDTV broadcasts. Sony won’t say how much it’s spending, but a single 30-second spot costs about $700,000.

Still, the company says it isn’t shipping any more HDTVs to retailers in conjunction with the Olympics ads.

Samsung will also be advertising on NBC, and it also wouldn’t say how much it has budgeted for the effort. The company won’t be shipping additional TVs to the U.S. either, in part because it isn’t looking for an immediate bump in sales.

“There have not been any conversations in the company about how this was going to boost our sales right away,” said Peter Weedfald, who heads Samsung’s marketing in the U.S. “This is all about building an emotive relationship with people who love the Games.”

But the most aggressive peddler of HDTVs is Panasonic.

The company, a unit of Tokyo-based Matsushita Electric Industrial Co., shelled out at least $60 million in cash and products to become one of 11 members of the elite Olympic Partnership program, the highest level of official corporate sponsorship.

Membership gives Panasonic the exclusive right to use the word “Olympic” and the five-ring logo in ads for TVs and other audio and video products. Last month, it embarked on a widespread promotional campaign involving broadcast and print ads to push its HDTVs. The cost, which is being shared with the Cable & Telecommunications Assn. -- a consortium of 10 major cable operators trying to convert consumers to the more expensive HDTV format -- is upward of $10 million, according to a cable industry executive.

The campaign already appears to be paying off. In announcing its quarterly results last month, Matsushita credited “strong sales in advance of the Athens Olympics” as one of the reasons behind its twelvefold increase in profit.

Panasonic rolled out 10 models of its new line of digital televisions, Viera, in the U.S. in the months leading up to the Olympics. The company also lifted its overall HDTV shipments above normal levels this spring and summer, said company spokesman Jeff Samuels.

“If we are spending millions on a campaign, we want to make sure we have enough product on hand,” he said. “It’s also an awfully good springboard for us into the holiday season.”

In Japan, the company unveiled 13 new Viera models on June 1, linking their introduction directly to the Games. Consumer marketing director Shunzo Ushimaru suggested that sports fans buy a new HDTV set and DVD recorder to get “full coverage of the Olympic Games in Greece this summer while Japan is in a sound sleep.”

It may all sound like a lot of marketing effort for a product that relatively few consumers seem ready to buy. But Tim Bajarin, an analyst with Creative Strategies in Campbell, Calif., said it was important for HDTV makers to pump up their brands now to woo the customers of the future.

“Manufactures have so much to gain with HD that they have to get in a strong position as soon as they can,” said Bajarin, who predicts that HDTV sets will outsell conventional TVs by 2008. “The closer they are to the leadership position, the better they are in the customer’s eyes.”