Bye Bye Analog TV
Mark Cuban has an interesting write up concerning the transition to digital TV. Man I hope he is right about points 1 a-c.
"That cut off date provides plenty of time for everything that is going to happen to enable the transition to happen. From reading and hearing all the debate, and I won’t rehash all the issues here, I think there are several points that will ease the transition that have not been discussed.
Here they are:
1. The minute a date is set, everyone and anyone who can make money selling their product and service to the estimated 20 pct of the American population who gets their analog TV over the air is going to start selling like it was their last chance.
a. There will be a price war between cable, satellite and telco video providers to reach those 20mm homes. I would expect that we will see deals like ”$1 to get your entire home ready for the digital conversion”. Instead of a free DVR, they will bundle in STBs for everyhome in the house. No video provider wants to lose out on the chance to convert those 20mm to customers.
b. The explosion in subs for all the video providers will also provide for an explosion in stock prices for all of them. Sure their customer acquisition costs will go up, but they will also see an explosion in digital subs. The stock market will ignore the costs as 1 time and extrapolate the digital opportunities per new sub and stock prices will rocket up.
c. There will also be a price war among TV manufacturers. This will be a once in a lifetime opportunity for them to blow product out the door. They won’t miss out on the chance. Like the video providers, they will advertise unbelieveable pricing specials and instead of offering promotion dollars for things like sound systems and recliners that we often see at retail, we can expect to see trade in programs for analog sets and even bundling of analog to digital convertors.
If there is a risk to the 12/31/06 date, its that manufacturers can’t ramp up fast enough to handle the demand and to gain volume efficiencies on sets. If they do have enough time, look for this to be the push that sends Plasma and LCD sets far below 1k dollars for a 42”HDTV set."
Link
Speaking of Mark Cuban, the Mavs are in the playoffs. Looks like the TV will be ON during TV - Turnoff Week!!
"That cut off date provides plenty of time for everything that is going to happen to enable the transition to happen. From reading and hearing all the debate, and I won’t rehash all the issues here, I think there are several points that will ease the transition that have not been discussed.
Here they are:
1. The minute a date is set, everyone and anyone who can make money selling their product and service to the estimated 20 pct of the American population who gets their analog TV over the air is going to start selling like it was their last chance.
a. There will be a price war between cable, satellite and telco video providers to reach those 20mm homes. I would expect that we will see deals like ”$1 to get your entire home ready for the digital conversion”. Instead of a free DVR, they will bundle in STBs for everyhome in the house. No video provider wants to lose out on the chance to convert those 20mm to customers.
b. The explosion in subs for all the video providers will also provide for an explosion in stock prices for all of them. Sure their customer acquisition costs will go up, but they will also see an explosion in digital subs. The stock market will ignore the costs as 1 time and extrapolate the digital opportunities per new sub and stock prices will rocket up.
c. There will also be a price war among TV manufacturers. This will be a once in a lifetime opportunity for them to blow product out the door. They won’t miss out on the chance. Like the video providers, they will advertise unbelieveable pricing specials and instead of offering promotion dollars for things like sound systems and recliners that we often see at retail, we can expect to see trade in programs for analog sets and even bundling of analog to digital convertors.
If there is a risk to the 12/31/06 date, its that manufacturers can’t ramp up fast enough to handle the demand and to gain volume efficiencies on sets. If they do have enough time, look for this to be the push that sends Plasma and LCD sets far below 1k dollars for a 42”HDTV set."
Link
Speaking of Mark Cuban, the Mavs are in the playoffs. Looks like the TV will be ON during TV - Turnoff Week!!
posted by Mark at
6:55 PM
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