The new deadline requiring conversion from analog to digital TV broadcasting by February 2009 will be a windfall for U.S. pay TV providers, according to a new report from technology research firm Strategy Analytics.
The report assumes that this deadline, unlike several similar previous deadlines, will actually stick.
Millions of households continue to stick with free terrestrial analog broadcasts even when cable, DBS or other options are available. Strategy Analytics, in its report “Digital TV in the U.S.: 2009 Deadline Creates Windfall for Cable and Competitors,” predicts the 2009 switch to digital will encourage many of those users to finally sign up for multichannel service from cable, satellite and telecom companies.
The report forecasts that the number of U.S. households using some form of digital TV will grow from 57 million today to 77 million by the end of 2008, just two months before the new deadline.
Strategy Analytics believes cable operators will be the biggest beneficiaries, because they have millions of analog customers who will certainly make the transition to digital with their current providers.
“Having a firm DTV deadline in place will sharply accelerate the industry’s migration to an all-digital platform,” said the report’s author, James Penhune, director of the firm’s Broadband Media & Communications (BMC) research program.
“Penetration of digital service will grow from less than half of all cable customers today to nearly three-quarters by 2010.”
The report anticipates cable operators will lower their prices on digital service; those price reductions will likely flow through the bundles offered by MSOs.