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End of analog TV a boon for some

Sat., Feb. 16, 2008

NEW YORK – TV’s big switch from analog to digital broadcasts will be complete in just one year, on Feb. 17, 2009, and many consumers are puzzling over how the shift will affect them: Do they need a new converter box, a new TV, a better antenna?

But it’s pretty clear which business interests stand to gain.

Cable and satellite TV companies could see a wave of new subscribers as people with older TVs pass on hooking up converter boxes to older televisions or buying new sets. Local stations are already using some of the extra capacity digital broadcasting frees up by launching auxiliary TV channels with weather and traffic, and they’re looking for ways to bring regular programming to portable devices.

The Federal Communications Commission began the switch many years ago to free up a large chunk of U.S. airwaves, which the government is in the process of auctioning off – a process that will net billions of dollars for public coffers. Making all UHF broadcast spectrum above channel 52 available will allow for powerful new wireless services, and possibly for a new network for public safety officials to use during disasters.

Most U.S. TV stations already broadcast digital signals as well as analog. What’s happening a year from Sunday is they’ll switch off the analog signals. No one with cable or satellite service will be affected, nor will anyone who gets stations over the air with a newer TV with a digital tuner.

Those who will be affected are the 13 million or so households that get TV broadcasts exclusively over the air and have a TV more than a few years old – or even a newer TV that’s relatively small. Also affected are TVs not connected to cable, even if a home has cable.

A Nielsen Co. study released Friday found that 16.8 percent of all U.S. households have at least one analog television set that would not work following the switch. And Hispanics are nearly twice as likely as whites to be without TV reception.

Affected households can get a digital converter box, buy a new television or sign up for cable or satellite service or one of the newer cable-like services being offered by phone companies.

A government-sponsored program on Friday began sending out coupons worth $40 each to any U.S. household that requests them to subsidize buying a box. Each household is entitled to two coupons for the boxes, which are just coming into stores now, starting at $40 or $50, making this option easy and practically free. All TVs being sold today have digital tuners, which are sometimes called ATSC tuners, after the technical standard used to make them (the analog standard was known as NTSC). If your current TV is less than a year old, the initials “DTV” appear somewhere on its front, or its screen is rectangular, you’re probably OK. If you still have the owner’s manual, check there whether the tuner is digital.

The switch could give an economic boost to retailers and manufacturers, who would benefit from selling the boxes and new TVs. And cable providers could get a boost over the next year or two from consumers who sign up for new service rather than deal with the other options.

According to a report Sanford C. Bernstein & Co. released Friday, an estimated 1.4 million households will likely switch to pay TV service as a result of the digital TV transition – enough to significantly lift the growth rates for the cable industry in 2009, compared with recent years.

Chris Murray, senior counsel for Consumers Union, said his organization is watching that pay TV operators don’t take advantage of confusion over the digital transition to push people into buying cable to view digital TV broadcasts. It isn’t necessary.

Brian Dietz, a spokesman for the National Cable & Telecommunications Association, a cable TV industry group, notes that cable’s educational ads about the transition don’t say consumers have to switch to cable.

For retailers, Bernstein analysts say the economic boost is likely to be incremental. The market for the converter boxes is likely to be about $1.4 billion, and for new TVs about $1.7 billion, for a total of $3.1 billion – still a relatively tiny part of the $150 billion U.S. consumer electronics market.

The transition comes at a tough point for local TV stations because they are seeing live viewership erode amid a proliferation of ways to watch video – over the Internet, on iPods and DVDs.


 

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