CEA Projects Enormous DTV Growth If Congress Sets Hard Transition Date

In an open letter, Shapiro said CEA projects that DTV sets with ATSC tuning could account for 88% of TV sets shipped by 2008 - if a DTV bill is passed this year. That’s up from an estimated 27.3% this year, when shipments are expected to grow 490% to 8,857,000 integrated sets, he said. The figure will double to 16,659,000 next year and double again to 32,761,000 by 2008, Shapiro said. Significant growth also is expected in DTV set-top boxes, with shipments projected to climb 250% this year to 1,676,000, and double to 3,029,000 in 2006, before declining 20% to 2,418,000 in 2008 as more consumers buy integrated sets, Shapiro said. By 2010, 93.5% of U.S. households could be receiving HD programming, Shapiro said. That includes consumers receiving over the air or from cable or satellite TV services, as well as those down-converting an HD signal for display on an SD or ED set.

These forecasts’ most important assumption is 2005 passage of a bill setting “any reasonable time” for a hard analog cut-off, Shapiro said. A hard date “will allow consumers to focus on the inevitable” and help stir “strong publicity about the inevitability of the transition,” Shapiro said. But the projections also assume the FCC will “act quickly” to grant a CE industry petition to revise the DTV tuner mandate schedule on 25- 36” sets, despite broadcasters’ strong opposition. “Fewer sets with tuners will be sold” if the Commission fails to act or heeds broadcast industry calls for earlier compliance dates, Shapiro said. At least 4 million fewer integrated sets will be shipped if the FCC “does not move” on the CE petition, he said.

The proportion of U.S. households at risk of being “disenfranchised” by cutting off analog TV service is less than 13% and shrinking every year, Shapiro said: “If there is any doubt” about the accuracy of CEA’s claim that relatively few TV households rely exclusively on an over the air antenna signal, “consider the total lack of public outcry over the recent announcement that Monday Night Football will be soon available only to satellite and cable households!” Of nearly 110 million American homes with at least one TV, 68% receive a cable signal and 22% receive a DBS signal, Shapiro said. CEA research shows that about 3% receive both cable and DBS, he said: “This means that if the cutoff occurred today, less than 13% of the population of 110 million TV households would not have access to a broadcast signal through cable or satellite (though they could certainly start subscribing).” Sanford Bernstein estimates this proportion is shrinking 2-3% every year, Shapiro said.

Repeating previous CEA data, Shapiro said most who eschew cable and DBS do so not out of poverty but for lack of interest in TV. Still, Shapiro said, “we must acknowledge that a small portion of the population will be adversely affected by an analog cutoff,” which is why “we respect and understand” providing receiver subsidies for low-income households -- a program CEA has never fully endorsed. And given the rapid growth of alternative forms of media delivery, Shapiro said, “a government effort to ensure that every American has some type of service after the analog cutoff will not be as widespread a challenge as some people believe.”