LG seals digital TV contract in the United States

LG Electronics Inc. has been chosen as one of two firms to develop a major new broadcasting technology in the United States that aims to make digital broadcasting accessible to all viewers. The National Association of Broadcasters and the Association for Maximum Service Television, the two largest broadcasting associations in the United States, announced yesterday that they selected LG Electronics to work on a project to enable 70 million analog televisions across the nation to receive land-based digital broadcasts. The United States will soon switch all its analog broadcasting services to digital, and the new technology will be a boon to owners of analog televisions who cannot afford to buy new digital sets. David Donovan, chairman of the Association for Maximum Service Television, said, “The selection of LG is based on a months-long deliberation among 10 bidders from all over the world.” France’s Thompson Group was the other company chosen to work on the new technology. “We hope to improve our brand awareness in the U.S. market in order to expand our market share there,” said Kim Jong-gyu, managing director of LG’s digital television research center. The United States currently makes up 40 percent of the world digital television market. According to Kagan Research, a U.S.-based broadcasting research firm, digital sets now account for around 20 percent of the American television market. This ratio is projected to be well over 50 percent in 2007 and 90 percent in 2010. Sales of digital sets in America will swell to 25 million in 2010 from 9 million this year, the research firm says. In addition, when the switch to digital broadcasting is complete, Zenith, LG’s U.S. subsidiary, expects to garner up to $100 million per year in royalties for a number of patents it holds on terrestrial digital television receiver technologies. by Seo Ji-eun