The significance of this quiet little backroom deal depends on whom you ask. Hardcore HDTV enthusiasts who bought into 720p, 1080i and even early 1080p video displays are trying to amortize as much value out of their sets - some of which cost as much as $20,000 less than 10 years ago - as they can. The idea of feeding these sets 480i, DVD-quality signal is enough to start a march on Washington. Consumers with privacy concerns also worry about Big Brother watching to see what they are watching. Not everyone loves the fact that their Kaleidescape server or their BD-Live Blu-ray player can tell studios, watchdog groups and other snoops what kind of movies you like to watch at home. We live in a very digital, very connected world but there are some who truly try to protect their privacy as much as they can and avoid digital connections to their media and those people are soon going to get stuck with standard definition garbage pumped into their HDTV.
AV retailers and custom installers tend to like the idea that millions upon millions of consumers will be needing to buy new HDTVs. While HDTV sets have ultra-thin margins - they do get customers back into the stores, which can ring the cash registers with other more lucrative sales. Video manufacturers like the idea of the analog sunset as well, as they get a chance to push their latest and greatest 2D and 3D technologies to consumers who once were early adopters of HDTV. The potential lure of 3D or the ability to play Pandora or check The Weather Channel right on your screen might outweigh the digital concerns of many mainstream, early adopter HDTV customers.
The biggest concern for the AV business should be (but isn't) blowing the trust they have with their consumers. Without groundbreaking technologies - how many times can you go back to the well to get that audio-video spend from global consumers? DVD was great and we bought in. So was surround sound, satellite TV, satellite radio, an iPad and flat 1080p HDTVs. Blu-ray was alluring and then we needed an HDMI receiver. Now after more than four iterations of HDMI later (and the format still stinks) and many trips back to the well to try to sell new AV technology to the masses - is disenfranchising early HDTV consumers over piracy fears really justified? Seriously, for every digital measure there is a digital counter-measure and if some hacker jackass in China thinks he can profit from selling bootleg copies of Avatar in 3D on Blu-ray - trust me - he will. Adding value is the key to keeping consumers from stealing media. Sell the content at a fair price and make it easy to use. What is easy about me (or any other consumer) having to replace a perfectly functional HDTV in my gym? I suggest nothing.