DTV: A Question Of Profit?
Suggesting that DTV is a profitless exercise for the TV industry outside of TV manufacturers, Boston-based research firm Forrester Research has proposed three "imperatives" that it claims will make HDTV profitable and speed the transition.
Forrester thinks that cable operators should charge more for HDTV, noting that while the FCC's transition mandate should drive DTV sets into more than half of U.S. homes, less than 16 percent of households--those with big screen HDTV's--will pay for the service in the next five years. Forrester found that this group, as well as consumers who are "likely to buy," will pay $10 per month for HD service. As an impetus for viewers to buy HD, Forrester also thinks cable operators should pay networks for HDTV programming in an effort to spur more HDTV content.
Lastly, Forrester urges regulators to accept the broadcast/cable/consumer arrangement, rather than fight it, and puts forth the question, "Why not let affluent HDTV owners subsidize the digital TV transition with cable payments?" The researchers argue that putting profit into the DTV transition makes public policy sense by boosting HDTV content and accelerating the government's goal to sell off broadcasters' analog spectrum. They further note that by bringing $300 million in profits to cable, cable bills will be less likely to increase.
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