The Wall Street Journal-20080122-Business Technology -- Talking Tech- U-S- Gets Prepared For Digital Televison
Return to: The_Wall_Street_Journal-20080122
Business Technology -- Talking Tech: U.S. Gets Prepared For Digital Televison
The recent Consumer Electronics Show was a reminder that this year, the country will be going through a once-in-a-generation transition. By February 2009, regular analog television signals will no longer be broadcast from TV towers, as they have been since the medium began. Jason Oxman, head of communications at the Consumer Electronics Association, talks about who will, and who won't, be affected by this big switch, along with sundry other topics.
---
Q: Electronics stores are full of digital TV sets of all sizes, including some very big ones. How popular have they become?
A: Earlier this month, we crossed a threshold: More than 50% of American homes now have a digital television set. And digital television sets are by far the category leader in consumer electronics; they make up more than 16% of the $160-plus billion spent on consumer-electronics devices.
Q: But that means 50% of Americans don't have digital TV sets. That seems like a high number, considering how in 13 months all analog over-the-air broadcasting will stop.
A: It's true that 50% of American homes have digital TV sets. But more than 85% subscribe to a video provider, such as cable or satellite. None of those 85% will be affected by the digital transition, because they don't receive their television signals over the air. The only households that will be affected are those who don't have a digital TV, and who also receive their television signals over the air. That's about 11% of American households today.
Q: Will that 11% be left high and dry?
A: Not at all. The households in this category will be eligible for a special program set up by Congress. They will all receive from the Department of Commerce two coupons, each of them good for a $40 discount on a special converter box that will allow traditional analog television sets to receive the new digital signals. Converter boxes will be priced at between $40 and $60. That means the coupons will offset most of that expense. The coupons don't get mailed until a few weeks from now, and by then, the digital converter boxes will be in thousands and thousands of stores.
Q: One of the reasons for ending analog transmissions is that digital transmissions take up less spectrum, meaning there will be spectrum available for new services, including new digital video services. But with new digital video services to date, most have been for computers, and not the cool big TV sets that so many people have now.
A: That has been an issue, in part because content companies are still grappling with digital-rights management, which has restricted the ability to move content around from device to device. Lately, though, we've seen a number of movie, TV and music companies step away from DRM. As a result, the frustration that consumers have felt about their inability to move content around -- to put it on their living- room TV set or in their car -- I think those issues will eventually be going away.
Q: Your association has to be neutral in the HD DVD versus Blu-ray format war, because you have member companies in both camps. But hasn't this technical dispute been a drag on sales of next-generation DVD players?
A: Our projections are that next-generation DVD players will really be taking off this year, growing at more than 170%. Of course, that is off a very small base, and traditional DVD players still outsell next- generation models. We are projecting sales of three million next- generation players, but around 20 million traditional players.
But one thing that is driving next-generation DVD players is the availability of 1080p TV sets, which can show the higher-quality pictures of Blu-ray and HD-DVD. Those sets hadn't been available before.
Q: Mobile phones have been getting lots of attention, thanks in part to Apple and then Google. What new things might there be in phones this year?
A: The experience will continue to evolve. People are continuing to migrate to new uses on their phones, making them computers on their hips. It's not just voice, of course. They are emailing with them, and watching TV. People are even starting to record video programs on the phones, like they were living-room digital video recorders. We are projecting growth of 33% for "smart" phones this year; there really is a lot of excitement in that market.
