- The Washington Times - Friday, November 26, 2004

Retailers are looking at bigger sales numbers for digital television sets this Christmas season, boosting the spirits of federal regulators and the industry.

Government and industry analysts alike have worried that this nation of TV viewers is shifting its gaze too slowly to digital from old-fashioned analog sets.

Yet almost 7 million digital television, or DTV, sets will be sold this year, according to the Consumer Electronics Association, a trade group for manufacturers and retailers. Roughly 3 million of these sets will be sold during the last three months of the year.

Independent groups also predict a big sales spike.

Homes in the United States will have 12.1 million high-definition or HDTV sets — the most sophisticated form of DTV sets — by the end of the year, compared with 7 million at the end of 2003, according to the Yankee Group, a Boston technology research outfit.

HDTVs have accounted for the vast majority of about 13 million digital televisions sold since the fall of 1998.

“The numbers are very encouraging. We believe consumers are embracing this technology,” says Jenny Miller, the Consumer Electronics Association’s spokeswoman.

A boost in sales of digital televisions will be welcome news for major retailers anxiously watching the Christmas shopping season that began yesterday. Many national retailers lured customers into their stores with extra-early hours and deep discounts.

DTV sets still sell behind traditional analog sets. Almost 22 million analog sets are expected to be sold this year, outpacing even the rosiest predictions for DTV sales.

Until recently, consumers who wanted to buy DTV experienced sticker shock. When the sets first reached the market in the late 1990s, they cost several thousand dollars, turning off many consumers.

Now, prices for basic DTV sets generally start at about $500. HDTV sets offer the best-quality picture and sound and can cost as much as $15,000, according to Consumer Reports, published by the nonprofit Consumers Union advocacy group.

“You’re talking about a couple of hundred dollars at the very least, unless you go for a flat panel or plasma screen, in which case you’re talking thousands of dollars,” says Aditya Kishore, senior analyst for the Yankee Group.

In addition to falling prices, analysts credit the sales boost for DTV to an increase in the number of programs broadcast in digitally compatible “high definition” as well as a government-led consumer education campaign.

The Federal Communications Commission urged TV broadcasters to switch from airing programming on the traditional analog spectrum to a digital spectrum, which offers higher picture and sound quality.

The conversion will be the most dramatic in television since consumers started switching from black and white sets to color in the 1960s, FCC Chairman Michael K. Powell told reporters in October.

FCC officials say they want to reclaim the analog spectrum for other purposes, such as providing broadband Internet service to rural areas and improving emergency broadcasting services.

The transition from analog to DTV is slated to end by 2007, but the government — concerned that the conversion is moving too slowly — likely will extend the date until 85 percent of homes are able to watch DTV programming.

Once that occurs, consumers will not be able to watch over-the-air television unless they have a DTV set or a box that can convert analog signals into digital signals.

Some consumer advocates worry the digital conversion will leave poor Americans behind.

“How do you take care of the millions of Americans who can’t afford a basic digital set or converter?” asks Jeffrey Chester, executive director of the Center for Digital Democracy, a nonprofit group that is critical of the way the FCC has handled the conversion.

Broadcasters have started airing many of their most popular programs in high definition, which helped spur sales of DTVs.

Many major sporting events air in HDTV, as well as regularly scheduled hit shows such as “CSI: Crime Scene Investigation,” “Desperate Housewives,” “Without a Trace,” “ER,” “Everybody Loves Raymond,” “Lost,” “The Tonight Show With Jay Leno” and “The Young and the Restless.”

In October, the FCC and the Consumer Electronics Association joined forces for a public relations campaign designed to educate consumers about the digital TV conversion. The FCC supplied major electronics retailers with brochures and introduced a Web site, dtv.gov, that includes an online shopping guide and answers to frequently asked questions.

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