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Over-the-Air Holdouts May Help HD Sales

Aug 14, 2008  •  Post A Comment

With the U.S. switchover to all-digital broadcasts a mere six months away, consumer procrastination may be a good thing for high-definition television retailers.
Most of the 9 million U.S. households who in late 2006 said they would buy set-top boxes that convert digital signals to signals that that can be received by analog sets still hadn’t acquired the component as of May, the Association of Public Television Stations said this week.
Meanwhile, more than 60% of over-the-air households plan to buy either a converter box or a new television instead of getting a pay TV subscription, up from 28% in November 2006.
Many of these consumers may go the cheaper route by getting the set-top boxes. The U.S. government has made that method even less expensive by offering $40 coupons that can be redeemed at converter-selling retailers. This year, the U.S. Commerce Department’s National Telecommunications & Information Administration has sent out almost 22 million coupons, with about 7.8 million redeemed for converter boxes as of last week, according to the NTIA Web site.
Still, others are using the switchover as an opportunity to pony up for a new HDTV set. With prices for liquid-crystal display sets, most of which are HDTVs, expected to fall about 15% this year, LCD shipments to North America are expected to jump 25% in 2008 to more than 30 million units, according to NPD Group unit DisplaySearch.
“Maybe people are looking for alternatives to save money,” said Mark Erstling, acting president of Washington, D.C.-based APTS. “With a digital TV, they’re going to get better content. They begin to understand they can get a lot of good programming without having to add to a cable or satellite bill.”
And Best Buy has noticed. The No. 1 U.S. electronics retailer, whose same-store sales continue to rise as flat-screen TV sales offset declines in revenue from digital cameras and CDs, said this week that it created a 30-minute public service announcement designed to heighten awareness of the digital transition with the Minnesota Broadcasters Association and Apex Digital; the PSA is being offered for free to television stations across the country.
“We’re anticipating hundreds of TV stations across the country airing this TV program,” said Jim du Bois, president of the Minnesota Broadcasters Association.

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