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Flat-screen TVs flying off store shelves

Americans own about 240 million TV sets. But they aren't good enough.
In 2003, 657,000 flat-panel TVs were shipped to dealers from manufacturers, up from 191,000 the year before.
In 2003, 657,000 flat-panel TVs were shipped to dealers from manufacturers, up from 191,000 the year before.
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Americans own about 240 million TV sets. But they aren't good enough.

At least that's the impression one gets when looking at the astounding sales of the newest flat-panel and slim-profile TVs that have been flying off the shelves in the past year.

"I'd say flat screens are 90 percent of our TV sales right now," said John Myer, president of Gaithersburg-based audio-visual chain MyerEmco, which has nine stores in the Washington area. "A year ago it was probably 50 percent. It's been pretty profound."

Indeed, sales of flat-panel televisions of all kinds more than tripled last year, according to the Consumer Electronics Association. In 2003, 657,000 flat-panel TVs were shipped to dealers from manufacturers, up from 191,000 the year before, pumping hundreds of millions of dollars into the hands of giddy retailers -- especially during the frantic television-buying season leading up to Super Bowl Sunday, the biggest TV-watching day of the year.

"It's a good time to be in the business," Myer said. "And there aren't many."

But this phenomenon leaves me perplexed: What is driving these sales, when we already have 2.3 televisions per household? It's not as if these are inexpensive purchases, though the prices have come down substantially. Yet people are ponying up many hundreds to many thousands of dollars to put yet another screen in their homes.

In fact, this buying binge is not about need, it's about want. And what's driving it is a confluence of sociological, psychological and cultural forces, coupled -- of course -- with recent advances in technology. It's about "The Jetsons" and what women want as much as it is about plasma and picture quality.

For sure, the new flat-screen televisions generally have terrific picture quality. The 7 or 8 percent of U.S. consumers who are getting HDTV video signals on their nifty new sets, in particular, are getting unsurpassed color and clarity. But a recent survey by Portland, Ore.-based QuixelResearch LLC showed that, when it comes to why people are buying these pricey TVs, the beauty of the picture on the screen pales in comparison with the beauty of the set itself.

The 'Wife Acceptance Factor'
Fully 42 percent of new purchasers of flat-panel televisions rated the way the set looked -- its flatness, its design or the way it fit into a room -- as the primary reason for buying one. Just 18 percent cited picture quality. That was a stark change from the year before, when, in the same survey by Quixel, a majority of flat-screen TV purchasers said picture quality was their main motivation.

Why has the design aesthetic taken the top spot? Because women want these TVs too. Enticing pictures of sleek and elegant televisions have been proliferating in all kinds of magazines and advertisements, and women are noticing. The small LCD versions, up to 20 inches or so, can fold under a wall cabinet in the kitchen or be hidden behind a mirror in the bathroom. The way people in the industry describe the situation, women like unobtrusive TVs that won't ruin a room.

Women even like the bigger plasma versions of flat televisions, now that they can be hung on the wall. And there are companies that make specially designed pieces of art to cover the plasma TV above that fireplace. Hit a button and Monet's "Water Lilies" retracts so you can watch "Survivor."

"Women who fought having these big boxes in their homes now have no problem -- it fits a lifestyle. It's not intrusive. They can make it look good in their home," said George Danko, senior vice president of consumer electronics and home essentials for retail chain Best Buy.

The Wife Acceptance Factor, or WAF, as insiders refer to it, is a huge shift for an industry that has grown up marketing almost exclusively to men. Big-screen televisions have been selling well for years as baby boomers install home theater systems in their family rooms. But to the men who have been driving these purchases, the ugly factor never seemed to matter much, except to the extent that their plans were regularly nixed by disapproving spouses.

"Can you imagine? You're married and you have to explain to your wife that you think it's a good idea to bring something home that's the size of two refrigerators and plop it down into your living room?" Myer said of the traditional big-screen projection TVs, which could be 35 inches deep and weigh hundreds of pounds. "Usually, they'd come in, they'd pick the TV, then they'd spend the rest of their energy dragging her in and trying to convince her that it's not as big as it looks."

With flat-panel technology, husbands are finally getting "permission" to bring home a monster screen in time for the big game. And that alone explains a portion of the dramatic sales gains.

'Jetson' appeal
But there is something about the look of these televisions that seems to get buyers particularly excited. In a country with wide-ranging taste levels, these new contraptions have universal appeal.

That is due, in part at least, to Hanna-Barbera and its popular 1960s space-age cartoon, "The Jetsons." Television industry executives make repeated references to the famed show as a way to explain the "must have" factor of the sleek new screens we're buying. These TVs look like all the neat gadgets we saw in futuristic shows when we were growing up. This is probably why the word "cool" is just about unavoidable when talking about these sets. There is an almost kid-like level of enthusiasm for flat-panel televisions among consumers, retailers and manufacturers, perhaps because we've wanted them since we were kids, before they even existed.

Tamaryn Pratt, a principal with QuixelResearch, is among those who credit such shows with pushing our buttons today.

"We have embedded psychological memories of these 1950s and '60s sci-fi movies that have flat TVs, so we expect those as consumers," she said. "We expected this change. This is one of the reasons why people are saying, 'Oh, it's finally here, it's coming into my price point, so now I can afford what I knew I was going to get in the future.' "

It's even better, she said, that the first such futuristic gadgets to hit the market are ones we already use every day.

The enthusiasm for flat-panels is likely to intensify two trends that have already been at work when it comes to Americans and their TVs: We're buying them bigger (to go into our bigger houses) and we're buying them smaller (to go into rooms where they've never gone before). Manufacturers and retailers see great potential in the ability to put these snazzy new devices in every room of the house, and they're thrilled that our houses are getting so much bigger. The record low interest rates have created a surge of refinancing that has in turn produced record levels of home renovations. In those big new rooms go big new TVs.

Americans buy about 30 million TVs each year, with about 10 percent of those considered big-screen -- 36 inches or larger -- said Tim Baxter, senior vice president of marketing for Sony's home products division. He expects that percentage to grow.

"There is a general cultural dynamic that happens here in the U.S., and that is the thirst for things big: We like big homes, big SUVs, big steaks, and we absolutely love big TVs," Baxter said. "This is unique -- the big-TV phenomenon. It's unlike any other market around the world."

More technological options
But it is not just having the room that makes these televisions so hot. There is a big component of technology fueling this frenzy. For years, people have bought the same kind of television, operating on cathode ray tube, or CRT, technology. The bulky depth of these sets was necessary to allow an image to be projected from behind onto the screen. There may have been hundreds of models of TVs on the shelves, but inside they were all more or less the same.

That's no longer true. The LCD technology that has fired up our laptop screens for years is now being used, to great effect, in smaller televisions -- generally about 30 inches or less, though some bigger screens are starting to emerge. At the larger end, plasma technology is allowing for enormous televisions, up to 80 inches, that are just four inches deep and can hang on the wall (with some effort). Both produce high-quality pictures. Other flat-screen technologies are also being developed, such as LCOS, or liquid crystal on silicon.

But there is also a growing market for a sort of hybrid tube technology, called micro-display projection, which creates a television as little as nine inches deep, also with superior picture quality. It's not as thin as a plasma or LCD set, but it's a fraction of the price -- about $2,700 versus $4,700 for a 40-inch set.

These micro-displays have been especially good sellers in the mid-size range of televisions, such as the standard family-room TV of 27 to 32 inches, Baxter said. Consumers have technology choices for the first time in their TV-buying, and it's encouraging them to open their wallets and try something new.

"From a dollar standpoint, in terms of how people are spending money, about 75 percent of the dollars are still in CRT, and about 25 percent in non-CRT," Baxter said. "Three years from now, that'll be reversed."

Danko of Best Buy said the chain probably will be selling only flat-panels and micro-display televisions in its larger screen sizes just 18 months from now.

Retailers and manufacturers can be so confident about the future because the strong early sales of flat-panel televisions are only going to accelerate as more programming is broadcast in high definition, the gold standard of picture quality that is demonstrably better than even the highest-quality signal on a digital flat-screen. Many of the new flat-panel sets being sold are already designed in HDTV's oblong format, and are ready, or can be made ready, to receive HD signals when they're available.

As more people see HDTV programming, industry experts say, they're going to want it in their own homes. "If you watch the Super Bowl on CBS this Sunday in HDTV and experience the picture quality and the surround sound benefits that are delivered by that, you're hooked," said Sony's Baxter.

All of these factors help explain why flat-screen televisions have been even bigger sellers than the industry expected. Clearly, there's not going to be mass adoption of these new technologies until the prices fall a good deal. But many Americans may well aspire to higher-end TVs before they can truly afford them. That's because people buying the sets are not just buying televisions, they are buying an image and, to some degree, a bit of illusion, said Ed Milano, vice president of program development at Design Continuum, a product design firm in Boston that researches consumer buying habits and values.

"People equate buying a new TV with having more time to enjoy it," Milano said. "They are buying the fantasy that their life will now contain more leisure time."

During which, of course, they can watch TV.