Will they get the picture?
TV buying gets fuzzy as FCC and industry join to take viewers into the digital age
Richard Kiley of Boston isn't a Luddite, but he felt like one after a recent visit to his local Best Buy store.
Kiley went into the store to purchase a new TV, expecting to pay about $200 for a standard analog television set. But his salesman pressured him to upgrade to a digital TV costing nearly four times as much.
"He tried every tactic he could think of," Kiley said of the salesman. The superior sound and picture quality were the first selling points. When that didn't work, the salesman told him a government-mandated transition to digital TV would render the cheaper set useless in two years.
"He was adamant that it would be absolutely no good," said Kiley, who walked out of the store in a huff, wondering whether there really was some government mandate forcing him to buy an expensive TV set he didn't want.
No such mandate exists right now, but pressure is building. Just as the Best Buy salesman steered Kiley toward a digital TV, so, too, is the government urging all consumers to go digital as part of a wholesale shift to the new broadcast technology.
The Federal Communications Commission, partnering with TV manufacturers and retailers, recently launched a educational campaign called "DTV -- Get It!" The federal agency is also requiring TV manufacturers to include digital tuners in more and more of the TVs they sell.
The ultimate pressure is the looming deadline for digital TV conversion, a drop-dead date when broadcasters will be required to turn off their analog broadcasts and transmit digital signals exclusively. At that time -- the current target date is the end of 2006, but it's likely to be pushed back to 2008 or 2009 -- consumers with analog TVs will lose their service unless they buy a digital TV or a converter box that would allow them to continue using their existing set.
"It could be the greatest government-mandated consumer expenditure of all time," said Bruce Leichtman, president and principal analyst at the Leichtman Research Group in Durham, N.H.
Cable and satellite companies should be able to shield most of their subscribers from this wrenching change, offering set-top boxes that will keep the shows coming no matter what kind of TV the customer has. But the estimated 17 million households who get their TV free over the air could lose service. These consumers, dubbed the "last grannies" by some Washington insiders, are at the center of a debate over how to complete the transition to digital TV as quickly as possible.
Many in Congress and at the FCC believe digital conversion will never happen until the last grannies are guaranteed uninterrupted service. Some officials favor government subsidies or tax credits of as much as $1 billion to help the holdouts pay for digital-to-analog converter boxes, which are expected to cost $50 to $100. Some officials say the analog users should even be allowed to use the subsidies to buy digital TVs or cable and satellite subscriptions.
The whole process is incredibly confusing, and it gets worse when you head into an electronics store to look for a TV. Not only is there a bewildering array of product choices, but salespeople are not always up on the latest twists and turns in Congress, and they often end up giving misleading information.
Lee Simonson, TV business team director at Richfield, Minn.-based Best Buy, said he "was disappointed" that Kiley's salesperson gave him misleading information. He said that salespeople are given training on products as well as the regulatory climate. "It's very confusing and not definitive," Simonson said of the regulatory climate.
Digital TV offers consumers richer sound and crisper pictures. The ultimate digital format is high definition, which offers more than twice as much picture detail as an analog television.
Digital TV also offers broadcasters more flexibility. In the same bandwidth it takes to transmit one analog channel, digital compression allows a broadcaster to deliver six standard definition programs simultaneously or one high-definition channel. The digital technology also allows broadcasters to deliver data along with a picture and even give it computer-like functions that allow customers, for example, to buy something they see on their screens or find out more information.
Leichtman, the research analyst, advises consumers who want to spend about $300 on a TV to ignore the looming digital TV deadline and buy an analog set. But if a consumer is interested in spending more, Leichtman says, he should consider upgrading to a high-definition digital TV. A 32-inch high-definition TV typically costs around $1,000.
Despite its high price tag, consumers have embraced digital TV technology fairly rapidly. Digital TV sales are expected to jump nearly 59 percent this year to 7 million sets. The Consumer Electronics Association estimates 11 percent of US households now have a digital TV.
But the government wants the transition to digital TV to go faster. Right now most TV stations are broadcasting programs in both analog and digital formats, but the government is eager to reclaim the analog spectrum. It wants to use part of the spectrum for public safety purposes and auction off the rest to companies interested in wireless broadband applications. The spectrum is considered so valuable that the auction could net $30 billion to $40 billion.
Congress originally selected Dec. 31, 2006, as the date when analog broadcasts would be terminated, but widespread acceptance of digital television is unlikely by then. The FCC favors pushing back the date until 2009, while a bill nearing final passage in Congress would terminate some analog broadcasts in 2008 and recover the vacated spectrum for public safety uses.
In the meantime, the FCC is teaming up with TV manufacturers and retailers to educate consumers about digital TV, a collaboration that concerns some academics and authors.
"I don't see a social purpose here. I see an increase in what consumers have to pay," said Juliet B. Schor, a professor of sociology at Boston College.
Susan Linn, an instructor in psychiatry at Harvard Medical School and the author of "Consuming Kids: The Hostile Takeover of Childhood," said she worries about the interactive nature of digital TV and its potential to make television an even more powerful marketing tool.
"We sort of fall in love with technology and we don't think about the ethical or social issues involved," she said. "This is going to be a gold mine for marketers."
Rebecca Fisher, a spokeswoman for the FCC, said the agency is not promoting an industry or urging consumers to buy more expensive TVs. She said the agency is merely attempting to explain a mandated directive from Congress.
"The true disservice would be for the FCC to ignore the effect the transition will have on consumers and let TVs turn dark on the day of the transition," she said.
Bruce Mohl can be reached at email@example.com.