True, we have been hearing about the benefits of high-definition television (HDTV) for years: Japanese broadcaster NHK first showed the world its HDTV prototype in 1979. But the uptake of HDTV is poised to accelerate, even if broadcasters fail to meet the FCC’s December 31, 2006, deadline to cease using analog signals and convert to digital—that is, providing 85 percent of American households are able to view digital channels. Nonetheless, IDC, a technology research firm, predicts that the HDTV market will be worth some $70 billion by 2008.

HDTV has already dramatically altered the television landscape. More than 50 manufacturers showed LCD TVs at the trade’s Consumer Electronics Show in Las Vegas last January. Computer makers such as Dell and HP are also getting in on the act. Their targets are the nearly 60 million households that the Yankee Group, another technology research firm, predicts will own an HDTV set by 2008.

At the Custom Electronic Design & Installation Association trade show in September, jaws dropped at the sight of a mesmerizing Sony rear-projection screen—a 70-inch behemoth that displayed a smooth, film-like image with rich, vibrant colors and superb picture detail.

This kind of technology changes commerce. It will not change life as we know it, but these advances are laying the groundwork for growth in the industries that produce hardware, software and components for HDTV, creating potential opportunities for digitally minded investors.

Capitalists are racing to provide viewers with hours of high-definition content, either by licensing existing movies and shows or by creating entirely new ones. Sony’s acquisition of MGM was partially motivated by the latter’s 4,000-movie library, which is ripe for conversion to HDTV. New services are beginning to sprout to lure more consumers into the HDTV arena. Cablevision’s Voom is the nation’s first all-HDTV satellite service; USDTV is the nation’s first over-the-air HDTV service. Billionaire Mark Cuban has launched HDNet, the first network to broadcast all of its programming in 1080i HD, the highest-quality HDTV format.

The rise of HDTV is also spawning the convergence of TV and computers. Consumers are now toying with home theater PCs (HTPCs). When demand increases for these devices, manufacturers will have to fill a growing need for “silent-running” PCs preloaded with a slew of home entertainment software. Samsung has produced a wireless home networking device dubbed the Home Media Center, which allows HDTV to be streamed over the air throughout the home to TV sets in other rooms. When wireless serving is added to HDTV devices, most likely in late 2005, the trend toward the integration of digital devices in the home will gain even greater momentum.

Whether or not all this hardware will actually be able to connect is up to the software companies, which are writing code intended to seamlessly manage these wireless, Internet-driven, remote-controlled consumer devices. The demand for this software will continue to escalate. Advances in the software-powered HDTV user interface will bring us a television that knows its owners’ viewing patterns. Digital TV start-up MyDTV is one company leading the field of this HDTV personalization.

Within a few years, software companies promise we will be able to tell our HTPC to, for example, look out for black-and-white Sherlock Holmes movies and record them, except when they do not feature Basil Rathbone. Video recorder manufacturers, particularly TiVo, are promoting the development of the HTPC. With thousands of channels on the horizon, demand will grow for software that maps the entertainment landscape, so-called interactive program guides such as Gemstar-TV Guide’s iGuide.

Even a once lowly element is experiencing unprecedented demand as HDTV moves into our lives. Indium, a soft, silvery-white metal used for decades in solder, is an important ingredient in the LCD screen that serves as the basis for HDTV. While geologists believe it to be as abundant as silver, mines in Belgium, Canada, China and Japan produce only 400 tons a year. Just two years ago, indium was worth $50 per kilogram; this year spot prices have soared into the $700 range. 

Michael Tchong is founder of Trendscape, a San Francisco-based consulting firm.