Converter Boxes: Are You Ready?

December 13th, 2007

By Paul Gagnon, Director of North America TV Market Research

The National Telecommunications and Information Administration (NTIA), the government entity tasked with administrating the DTV converter box coupon program, just announced that they will begin mailing coupons good for $40 off a Digital TV converter box to consumers who have requested them starting Feb 17, 2008…exactly one year to the day before analog broadcasts cease. But consumers can start requesting these coupons on Jan 1, 2008. Why the month and a half delay between the two?

There are a couple reasons I am guessing.

First, retailers are not going to want to reset their sales floors to accommodate the boxes until after their holiday season comes to a close at the end of January. To do so earlier would risk disrupting the busy sales floor at a time when red shirts and blue shirts are trying to sell big screen TVs for Super Bowl, all of which will be HD anyway.

Second, though the NTIA has certified over 100 retailers to participate in the program, it may need a little more time to set up backend systems to process and print the coupons themselves. IBM was selected as the vendor back in August and four months seems to me a tight schedule to implement a coupon redemption system.

In my market, San Diego, I have started seeing public awareness campaigns on my cable system promoting the transition and what consumers view over-the-air signals (OTA) need to do. But I fear that the nearly 20 million households that rely on OTA only and the millions more households that subscribe to a multi-channel service, like cable or satellite, and have one or more TVs in the house not connected to the service are not getting the message. Many of my friends and family are not aware of the need to do something, and I talk to them regularly about it! The transition has been underway for more than seven years, but awareness remains low, though improving. Did the involved industries wait to long to step up awareness campaigns? I fear so…

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