Digital TV Promises A Lot, But It Won’t Come Cheap First Sets Could Cost As Much As $10,000 When Introduced Later This Year

There’s no question that manufacturers and retailers are excited about digital television. And they think consumers also will be enchanted by its sharper pictures, better sound and the promise of new forms of programming that haven’t even been invented.

But despite the clear superiority of the new technology, at least one big question remained at the Consumer Electronics Show, where the first digital sets debuted Thursday.

How quickly will large numbers of consumers be willing to pay hefty premiums to watch digital broadcasts?

“Not yet - not at these prices,” said Phil Kaplan, a buyer for Wolf Camera and Video in Atlanta. “Not when you read articles talking about prices of $10,000.”

Kaplan was among the scores of people who crowded into the RCA booth on the show floor to watch demonstrations of digital television, the hottest product at this year’s CES. Most major manufacturers displayed sets - or prototypes of sets - they hope to begin selling this fall, when digital broadcasting will start in the largest U.S. television markets.

But he and other attendees, impressed by the greater realism digital television provides, agreed that DTV probably would be like other high-tech consumer products - snapped up first by a few videophiles and gradually finding its way into homes as prices decline.

“I think it’s clearly the big thing for the future,” said Maria Kyriakos, who sells televisions at Montgomery Ward’s in Las Vegas. “Eventually, most people will have this.”

The companies that plan to make and sell digital TV’s know that U.S. consumers aren’t about to rush out en masse and replace their current sets. But they can count on most eventually doing so; the Federal Communications Commission is requiring broadcasters to switch to digital transmissions by the year 2006.

Consumers will have to buy new DTVs or set-top boxes allowing them to see digital programming on their current sets.

By then, prices are expected to fall significantly, but anyone intent on owning the latest and coolest in video as soon as it hits the market can count on sticker shock.

The RCA 61-inch, rear-projection digital set being demonstrated at the show is expected to retail for about $7,000, according to Thomson Consumer Electronics, which owns the RCA brand. Most other companies, however, aren’t saying how much they expect their sets will cost.

Non-projection sets should be less costly. Still, DTV sets are expected to cost at least $2,000 more than current televisions, said Bruce Allan, general manager of the broadcast division of Harris Corp., a leading maker of digital TV transmission equipment.

He estimated that the premium would drop to $500-$700 in about five years and to $300 within 10 years.