Strategy Analytics Views DTV Transition as Pay TV Windfall

Boston-based research firm Strategy Analytics recently released a report, Digital TV in the US: 2009 Deadline Creates Windfall For Cable, Satellite and Telco Providers, in which it concludes it does not see the millions of households served only by free analog television as purchasing converter boxes (subsidized or not) or digital TV sets for reception of free digital TV service.

The firm said its report suggests the cessation of analog off-air television broadcasting will spur millions of households to sign up for multichannel service from cable, satellite and telcom service providers.

Between now and the end of 2008, Strategy Analytics forecasts the number of households using some form of digital TV will grow from 57 million to 77 million.

James Penhune, author of the report, expects cable operators to benefit from the transition.

"Having a firm DTV deadline in place will sharply accelerate the industry's migration to an all-digital platform. Penetration of digital service will grow from less than half of all cable customers today to nearly three-quarters by 2010." Satellite and telco TV providers are expected to benefit from the deadline as well, but not on the same scale as cable, which can draw on its huge base of analog customers.

The research firm's report suggested that in order for cable operators to maximize this opportunity to add customers, the strategy and pricing structure for digital cable should target customers who had not previously been pay TV subscribers.