TV Sales Fueled by Digital Switch

By Danny King

U.S. consumers will buy 31 million digital televisions this year, boosting cumulative sales to about 116 million, as more households prepare for the switchover to all-digital broadcasts next February.

Almost 70% of U.S. households will own a digital television set by the end of the year, up from 50% at the end of 2007, the Consumer Electronics Association said yesterday. Almost three out of four U.S. consumers are aware of the Feb. 17, 2009, switchover, up from 41% two years ago, CEA said.

Preparation for the switchover has fed gains in North American TV sales amid an economic slowdown. About 42% of the 13 million households exclusively getting their programming over the air, or about 5.5 million households, plan to buy a converter box that will let their old TVs receive digital signals, CEA said.

“The marketplace is working. The transition is working,” said Consumer Electronics Association Chief Executive Officer Gary Shapiro in a statement. “Our industry and government partnerships on consumer education are successful.”

North American consumers bought almost 7.5 million new televisions in the first quarter, according to NPD Group unit DisplaySearch, which estimated 36.2 million unit sales of North American TVs for 2008. First-quarter sales were 7% higher than the DisplaySearch had forecast, partially because cash-strapped consumers who can’t afford liquid-crystal display TVs bought almost 1 million cheaper cathode-ray tube sets in preparation for the switchover, said Paul Gagnon, DisplaySearch’s director of North American TV research.

“The very price-conscious set of the market doesn’t see a need for LCDs, but they still need a digital TV,” said Gagnon.

In January, the National Telecommunications & Information Administration, a division of the U.S. Commerce Department, began an $890 million program that gives out $40 coupons that may be applied toward digital converter boxes, with certain households eligible for as many as two coupons. Since then, the government has distributed more than 15 million coupons to almost 9 million households as of yesterday, committing about 72% of the program’s funding in the process, according to the NTIA Web site.

Best Buy is selling Insignia converter boxes for about $60 while Wal-Mart is selling an RCA model for about $50.

(Editor: Baumann)