Federal Election And No 3D Content Hurting TV Sales

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As digital TV sales hits 73percent penetration in Australia, TV manufacturers are starting to witness a slowdown in sales with several retailers claiming that the Federal Election and a lack of 3D content is hurting sales.

Also contributing to a slowdown in sales which was alluded to yesterday by Terry Smart the CEO of JB Hi Fi is the running of the Federal Election with retailers witnessing a significant drop off in “foot traffic through their stores”. 
Paul Read General Manager of Consumer Electronics at Panasonic admits that flat panel TV sales of plasma have slowed considerably despite extensive 3D marketing by some vendors. He believes that as more 3D movies become available towards the latter part of the year that consumer traffic in stores will increase.
Retailers like JB Hi Fi and Harvey Norman claim that during the past six months consumers have started to gravitate to LED TV’s over plasma. This is shown locally in the latest GFK data which reveals a significant jump for LED TV’s.
According to a new report by Quixel Research, global LED unit shipments rose 105 percent in the second quarter over the first quarter of 2010, and increased 875 percent year over year.
 In contrast, the CCFL segment was up only 3 percent in unit volume from the first quarter to the second quarter, and declined 25 percent year over year.
“LED models impacted almost every screen size segment — positively,” said Tamaryn Pratt, principal of the market research firm. “The LED segment was finally in full swing in the second quarter.”
 Pratt noted that the leading LED brands have broadened their selection in size and price, and that many opening price-point brands now have their first LED offerings in stores.
“After a full year in the market, there are plenty of choices and consumers like what they see,” she said.
Revenue for the LED segment rose 49 percent from quarter to quarter and spiked 312 percent year over year to $1.7 billion, accounting for nearly 40 percent of the total LCD TV category.
Total LCD shipments rose 16 percent quarter to quarter but slipped 5 percent from the year-ago period, while total LCD dollar volume rose 9.8 percent from the first quarter, to $4.5 billion. 
 Looking ahead, Quixel is projecting strong LCD demand through the balance of the year despite tough economic conditions, and anticipates continued unit growth through 2013, as large-screen models take an increasing share of the category.
Another driving force is the release in Australia of new IPTV services.
This week OzTAM said that 73.8% of Australian homes were now capable of receiving a digital TV picture.
OzTam also claim that 32% of Australians have purchased a digital video recorder. 
A survey of several TV vendors by ChannelNews reveals that the majority believe that IPTV will be a driving factor running into Xmas as Telstra, Fetch TV and Foxtel battle it out to deliver new services. 
Several industry observers believe that Foxtel has peaked with30% share of the available Australian market and that a battle between Telstra with their T Box and Fetch TV who are currently cranking up their content via several ISP’s will see Foxtel lower their prices.
A senior executive of a major content Company said “Foxtel has peaked, they have the premium end of the market and for them to grow they will have to lower their prices or offer content that no one else has”.
“A major advantage is that their offering is expensive and when you are expensive you can always lower your prices to get share which is what they will do. From a profit prospective they will see a fall however this could be made up if they eliminate the need for a set top box. They are currently talking to several TV vendors about software driven content over an IP network however this has its problems especially if there is critical mass demand at certain times of the day”.
“By eliminating a set top box Foxtel is eliminating a big upfront cost however they will struggle delivering their content over an IP network while there is no fibre and during peak viewing periods” they said.
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