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Electric Japan: A yen for digital TV

Are Japanese companies set to make a killing?

(Photo by Reuters; Illustration by Street Attack)

(Editor's note: Electric Japan is a two-part series on Japan's efforts to help its struggling consumer electronics industry. Read more about the political efforts underway to boost profits across Latin America.)

TOKYO, Japan – Japanese TV manufacturers hope the spread of their country’s digital-TV standard will translate into more sales for them. Their government hopes it provides a badly needed boost for Japan’s long-flagging economy.

The standards battle’s current skirmish is being fought in Latin America as the continent chooses which standard it will use to broadcast digital programming. Japan, the U.S., Europe, and China all have their own standards. The areas of the world where consumers can afford expensive new TVs have mainly made their choices, with most picking the European standard, known as DVB-T.

But starting in 2006, when Brazil adopted Japan’s ISDB-T standard, other Latin American countries have been following the lead of their larger neighbor. Japan has four of five Latin American households already committed, and its manufacturers are lining up to sell TVs; Panasonic, Toshiba, and Sony are among those with factories in Brazil. Of TVs sold in the region, 19 percent are Japanese-branded, according to market research firm DisplaySearch.

At stake is a potentially vast market — 400 million people live in Latin America, with 300 million living in ISDB-T countries — for digital TV sets, high-definition broadcasts of programs like anime and other cartoons, and phones that double as tiny TVs. The pitch for ISDB-T centers on mobile phones. All four of the standards are designed to broadcast higher-quality, sharper images than analog signals.

Consumers in Latin America are expected to spend $2.8 billion on LCD TVs in 2009 and $3.8 in 2010. Three years ago, 5.3 percent of Latin American households had an LCD screen; that number is forecast to grow by 56 percent  on a compounded annual basis by 2012.

But only the Japanese standard allows phones to receive high-definition broadcasts while moving. For now, mobile HD is a deluxe feature that matters only to Japanese phone users, many of whom already watch TV on their phones via a mobile broadcasting system called One-Seg. As the rest of the world gets more advanced phones, however, TV shows might become a feature consumers expect on their mobiles. Japanese-model TV phones, which are typically made by Japanese manufacturers, would be an obvious candidate for export.