Seeing the Light on HDTV
Like it or not, your next television will be a high-definition one—and you're going to love it. Here's what you need to know
By Wilson Rothman

(MONEY Magazine) – Visit an electronics superstore these days and you can't help but notice the phrase "high-definition television," or HDTV, everywhere you turn. But if you're like most Americans, you still aren't even sure what HDTV is—let alone how, as the teenage sales reps at the store like to say, "it's gonna change your life."

But change your life it will, if for no other reason than that it's becoming increasingly rare for manufacturers to offer family-size TVs (bigger than 27 inches, say) that aren't HD-compatible. Within a couple of years you probably won't be able to find the old kind.

There's a real upside to this development, but for the most part it remains hidden behind a veil of confusion. If you're in the market for an HDTV set, you have five—yes, five—different technologies to choose from and three different ways to bring the signal into your home, each with its own receiving hardware and service charges.

The puzzlement doesn't always end when you bring the TV home, either. There are roughly 10 million HD sets already in American living rooms, but only 5 million actually receive high-definition programming, according to Yankee Group analysis. (And if you think cost is what's holding back those other 5 million, think again: Bringing HDTV signals into your home doesn't necessarily mean blowing your budget.) So you probably have some questions.

Will I know HDTV when I see it? Absolutely—this won't be an emperor's-new-clothes experience. Each frame on a standard television is made of 480 horizontal lines, compared with either 720 or 1,080 lines with HD, making the latter as much as six times sharper. HD is also wide-screen, meaning it has the same proportions as a movie screen. (DVDs, by the way, are often wide-screen, but they're not HD; they use only 480 lines a frame.)

The upshot is that even at a distance, the difference between HD and standard-definition broadcasts is striking. The Price Is Right may not be terribly compelling in HD, but watching the Super Bowl, Saving Private Ryan or The Sopranos in HD can make you understand why audiences in the early days of film—who could be frightened out of a theater by the image of an oncoming locomotive projected onto a screen—felt they were witnessing not a canned experience but vivid reality.

Are my favorite shows available in HD? You bet. NBC, ABC, CBS and PBS, along with HBO, Showtime and Discovery, have been broadcasting in HD for several years now. UPN, WB and Fox are beginning to offer it in certain markets, along with cable channels like ESPN, TNT, Starz, Cinemax, Bravo, Fox Sports Net and NBA TV. New specialized HD channels are also appearing, most notably HDNet and HDNet Movies, which broadcasts original specials and sporting events, as well as films. Among the wide variety of programs showing in HD are The Tonight Show with Jay Leno, Law & Order, CSI, Everybody Loves Raymond, Smallville, Six Feet Under, Monday Night Football, the NBA Finals and last summer's Olympic Games. "It's the most watched percentage of television," says Yankee Group analyst Adi Kishore.

What's the best way to get HD programming? There are three ways to receive an HDTV signal at home: cable, satellite and "off air," via an old-fashioned aerial antenna. Cable, if available, is the best option—among other reasons, it offers a wide array of local programming and has enough bandwidth to rapidly add new HDTV channels over the long term.

What's more, for cable subscribers who already get digital service (which on average runs about $50 a month before premium channels, plus a set-top box rental fee of up to $7 a month), a move to HD often costs nothing. You just call and ask to swap out your existing digital cable box for an HD-enabled one. People still on basic cable can sometimes get an HDTV upgrade from their cable provider for the cost of the box rental alone, but often it makes sense to upgrade to digital cable at that time.

What if my cable provider doesn't offer HD? Look to the sky. The Coke and Pepsi of the satellite TV business, DirecTV and Dish Network, currently offer HD versions of HBO, Showtime, ESPN, Discovery, HDNet and HDNet Movies, with a few additional pay-per-view channels and some network content. DirecTV also has the NFL Sunday Ticket, which broadcasts more than 100 regular-season games in HD, for $220 a season. In general, satellite services can't offer as much local programming in HD, since the local channels they do carry—which must be transmitted to a satellite, then beamed back to earth—heavily tax their bandwidth.

The cost for HD is about $10 or $11 extra a month, on top of the monthly service bill that can range from $30 to over $90. If you're starting from scratch, you'll need a dish (the installation fee for which is often waived these days) and a receiver, which usually costs $300 to $400 to buy, though Dish Network leases it as part of the monthly service fee.

Voom, owned by Cablevision, is the newest satellite provider, grabbing attention with a very large offering of HD programming. In addition to a core similar to that of its competitors, it features 21 of its own commercial-free channels, feeds of movies, sporting events, concerts, cartoons and news. Its monthly service fees range from $50 to $90, depending on premium channels, plus an equipment rental fee of around $10.

Can I really get HDTV broadcasts with an antenna? Yes—and it's free. It's easy to forget, but old-fashioned broadcasting still goes on, now with digital signals including HDTV shows. If your TV has a built-in HDTV tuner (also known as an ATSC tuner), you can buy a digital antenna for under $100, install it yourself, then hunt for a signal just like in the old days. If the TV doesn't have a built-in tuner—and many HD-ready sets, intended for use with cable and satellite connections, do not—you can buy a receiver box that includes an HD tuner for $300 or less.

Since satellite TV boxes include an HDTV tuner, you can often connect an off-air antenna to that to receive locally broadcast HD channels. Voom's $200 installation even includes one.

Is it possible to record programs in HD? Yes, but not with a VCR. The newest frontier in high-def perks is an HD digital video recorder. The benefits of DVR, the most famous of which is TiVo, have been sung many times over: You sift through weeks of programming for the real gems, then watch them at your leisure. With satellite, purchasing an HD DVR is the only option, at a steep $1,000. Cable subscribers have it easier: In some areas you can lease one in place of a digital cable box or standard DVR, often at no extra cost.

Like high-definition television, of course, DVRs are frequently said to be able to "change your life." Just imagine putting the two together.

Which HD source works for you?