Cable to benefit from DTV transition

Cable providers could get a boost over the next year or two from consumers who choose sign up for new service rather than deal with the other DTV options.

According to a report from Sanford C. Bernstein & Co., 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 with recent years.

Chris Murray, senior counsel for Consumers Union, said his organization is watching to make sure 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.

Brian Dietz, a spokesman for the National Cable & Telecommunications Association, noted 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., said it costs about $500,000 to upgrade a typical TV station.

Mark Aitken, director of advanced technology at Sinclair Broadcast Group Inc., near Baltimore, said digital technology gives TV station owners several important ways to hold onto viewers, mainly high-definition broadcasts.

Calling HDTV broadcasts the “low-hanging fruit” for TV stations to take advantage of, Aitken also said sending live TV broadcasts to portable devices like cell phones is a major possibility. The key issue, he said, is getting broadcasters, programmers and mobile device makers to agree on a standard.