End of Analog Offers Opportunity

Aug 10, 2008

-By Steve Miller


At noon each weekend, several DirecTV reps set up display tables at Circuit City stores in the Midwest, right next to the stacks of digital converters.

The satellite dish salespeople chat up their sales packages, which begin at $30/month, as a superior alternative to converter boxes consumers will need to receive a TV signal as of Feb. 17.
 
The local initiative is one of many that will target the estimated 20 million households who will have to make a decision by February when 100% of television programming will be delivered digitally.

Those households still receiving analog signals, which will be shut off, are fair game for the marketers of HDTV, cable, satellite programming and the retailers that sell these products.

"There are two giant marketing opportunities here," said Josh Martin, analyst at the Yankee Group, Boston. "One is education and helping the consumer understand the transition. The second is being there if their TVs are not compliant. So far, no one is doing an effective job [communicating either]."

Westinghouse, for one, is trying by enclosing fliers in each of its shipped TVs informing consumers of the change in case there are other TVs in the house that may be left in the dark when the switch hits. A message on its service line lets people know about the digital conversion while at the same time touting Westinghouse HDTVs. "We want to make sure people know that we can provide lower cost solutions when it comes to TVs," said Rey Roque, vp-marketing at Westinghouse.

Hitachi, meanwhile, plans to use its holiday campaign as a way to address the late adopters. "It's the duty of all TV brands to educate the consumer," said Daniel Lee, vp-marketing at Hitachi, Princeton, N.J.

The holiday campaign will feature Hitachi's slim HDTVs and plasma line, Lee said, but Hitachi will also partner with retailers on an education element that will focus on the brand's "more mainstream" plasmas and HDTVs.

To make sure the consumer is educated on the transition itself, Lee said he is counting on the current effort by the Consumer Electronics Assn. and retailers. The CEA in April launched a public awareness campaign called "Convert Your Mom" featuring Brady Bunch TV mom Florence Henderson as pitchwoman. "The digital change is a great chance for our members to market their products, but right now that marketing is a delicate balance," said Megan Pollock, senior manager of public policy communications at CEA. "We don't want to see people getting overwhelmed."

The U.S. Department of Commerce is currently offering two $40 coupons at DTV2009.gov to buy a converter box, which retails for $50-80. More than four million have been redeemed. It has spent more than $5 million on consumer education about the analog cutoff.

In July, Nielsen found that 20.9% of sample households had at least one TV set that would not work after the transition date, down just slightly from January, when that figure was 23%. The slow progress will no doubt end in a flurry of activity at the end of the year as the deadline approaches.

That's especially the case as more consumer electronics producers become fully engaged in pitching to analog consumers, said Rob Enderle, principal at the Enderle Group, San Jose, Calif. "A lot of consumers will wait until the last minute and that puts them in the middle of the fourth quarter push. Retailers will make the connection between the switchover and this idea to get a new set. Let's face it, the opportunities are pretty big here to get people to buy a new TV set in this changeover."


End of Analog Offers Opportunity

Aug 10, 2008

-By Steve Miller


At noon each weekend, several DirecTV reps set up display tables at Circuit City stores in the Midwest, right next to the stacks of digital converters.

The satellite dish salespeople chat up their sales packages, which begin at $30/month, as a superior alternative to converter boxes consumers will need to receive a TV signal as of Feb. 17.
 
The local initiative is one of many that will target the estimated 20 million households who will have to make a decision by February when 100% of television programming will be delivered digitally.

Those households still receiving analog signals, which will be shut off, are fair game for the marketers of HDTV, cable, satellite programming and the retailers that sell these products.

"There are two giant marketing opportunities here," said Josh Martin, analyst at the Yankee Group, Boston. "One is education and helping the consumer understand the transition. The second is being there if their TVs are not compliant. So far, no one is doing an effective job [communicating either]."

Westinghouse, for one, is trying by enclosing fliers in each of its shipped TVs informing consumers of the change in case there are other TVs in the house that may be left in the dark when the switch hits. A message on its service line lets people know about the digital conversion while at the same time touting Westinghouse HDTVs. "We want to make sure people know that we can provide lower cost solutions when it comes to TVs," said Rey Roque, vp-marketing at Westinghouse.

Hitachi, meanwhile, plans to use its holiday campaign as a way to address the late adopters. "It's the duty of all TV brands to educate the consumer," said Daniel Lee, vp-marketing at Hitachi, Princeton, N.J.

The holiday campaign will feature Hitachi's slim HDTVs and plasma line, Lee said, but Hitachi will also partner with retailers on an education element that will focus on the brand's "more mainstream" plasmas and HDTVs.

To make sure the consumer is educated on the transition itself, Lee said he is counting on the current effort by the Consumer Electronics Assn. and retailers. The CEA in April launched a public awareness campaign called "Convert Your Mom" featuring Brady Bunch TV mom Florence Henderson as pitchwoman. "The digital change is a great chance for our members to market their products, but right now that marketing is a delicate balance," said Megan Pollock, senior manager of public policy communications at CEA. "We don't want to see people getting overwhelmed."

The U.S. Department of Commerce is currently offering two $40 coupons at DTV2009.gov to buy a converter box, which retails for $50-80. More than four million have been redeemed. It has spent more than $5 million on consumer education about the analog cutoff.

In July, Nielsen found that 20.9% of sample households had at least one TV set that would not work after the transition date, down just slightly from January, when that figure was 23%. The slow progress will no doubt end in a flurry of activity at the end of the year as the deadline approaches.

That's especially the case as more consumer electronics producers become fully engaged in pitching to analog consumers, said Rob Enderle, principal at the Enderle Group, San Jose, Calif. "A lot of consumers will wait until the last minute and that puts them in the middle of the fourth quarter push. Retailers will make the connection between the switchover and this idea to get a new set. Let's face it, the opportunities are pretty big here to get people to buy a new TV set in this changeover."
 


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