Cable, satellite could gain from digital switch

The new signal could mean the picture on some televisions will improve, but it doesn't guarantee high-definition visuals. That depends on whether a particular TV is set up to receive high-definition programming and whether a program is broadcast that way.

The switch could give an economic boost to retailers and manufacturers, who would benefit from selling the boxes and new TVs. And cable providers could get a boost over the next year or two from consumers who sign up for new service rather than deal with the other options.

According to a report Sanford C. Bernstein & Co. released Friday, an estimated 1.4 million households will likely switch to pay TV service as a result of the digital TV transition — enough to significantly lift the growth rates for the cable industry in 2009, compared to recent years.

Chris Murray, senior counsel for Consumers Union, says his organization is watching that pay TV operators don't take advantage of confusion over the digital transition to push people into buying cable to view digital TV broadcasts. It isn't necessary.

So far he hasn't seen any abusive behavior, but he said: "We want the folks in the marketplace to know that we're watching."

Brian Dietz, a spokesman for the National Cable & Telecommunications Association, a cable TV industry group, notes that cable's educational ads about the transition don't say consumers have to switch to cable.

For retailers, Bernstein analysts say the economic boost is likely to be incremental. The market for the converter boxes is likely to be about $1.4 billion, and for new TVs about $1.7 billion, for a total of $3.1 billion — still a relatively tiny part of the $150 billion U.S. consumer electronics market.

The cost to broadcasters of new digital equipment is relatively small. Tim Thorsteinson, president of the broadcast division of Harris Corp., a major manufacturer of broadcasting equipment, says it costs about $500,000 to upgrade a typical TV station.

The transition comes at a tough point for local TV stations, however, because they are seeing live viewership erode amid a proliferation of ways to watch video — over the Internet, on iPods and DVDs.

Mark Aitken, director of advanced technology at Sinclair Broadcast Group Inc., a major broadcaster based near Baltimore, says digital technology gives TV owners several important ways to hold onto viewers, mainly high-definition broadcasts, which can be a lot more pleasant to watch than YouTube videos.

Aitken calls using HDTV broadcasts the "low-hanging fruit" for TV stations to take advantage of. He points to another big possibility: sending live TV broadcasts to portable devices like cell phones. Adapting the handsets would be simple technically; the far bigger issue is getting broadcasters, programmers and mobile device makers to agree on a standard.

Just next week, a preliminary field trial for three competing technologies for portable TV viewing is getting under way in San Francisco, Aitken said. The industry could have a candidate for a new mobile TV standard in place by the third or fourth quarter of this year.

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