Monday, February 18, 2008

Digital Conversion to Cause TV Market Shrinkage

Like being dunked in frigid water, the TV marketplace is about to be shocked by the switch from analog to digital. The forced switch of broadcasters from analog to digital in 2009 could leave 10 percent of TV watchers who don't have digital-ready TVs out in the cold.

Nielsen Companys says that the figure could go as high 16 percent if the households that have both analog and digital sets are tallied.

The TV networks are already scrambling because of the writer's strike and consumers spending more time online, and this development won't help. I doubt that people with older analog boxes have broadband, so these folks -- generally lower income -- won't be those jumping to online video watching.

The networks need to get the marketing message out that the change is coming with ads that run during prime time. We should anticipate a huge boom in digital TVs being sold after the tax rebate checks are sent out in May as well as over the Christmas holidays as the holdouts make the switch.

Posted By John Gartner at 11:18 AM
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