Monday August 17, 2009 – Myra Moore
Who knew so many consumers would buy U.S. DtA converter boxes? That 45 million (DTC’s latest estimate from its tracking service) shipped into retail from January, 2008 through June, 2009 comes as a surprise to just about everyone.
We’ll even go higher. DTC estimates that given the large volume of coupon requests in June and July (on the heels of the deadline for requesting coupons) that number could hit 50 million by the end of the year.
So now that the U.S. successfully shut off the analog spectrum without a major disaster, what are lessons learned and why should anyone care now that it’s all over? First of all, folks in the business of making equipment and delivering over-the-air TV programs should care because there are lots of other countries that have yet to shut off analog transmissions. Translation: There’s still more money to be made on turning off terrestrial analog transmissions.
Lessons learned?
- A product category ripe for the old-style price wars can actually keep its average retail price steady for a sustained period. Granted, there wasn’t a lot of margin for suppliers and retailers to begin with, but it seemed like a dive to the bottom could have started a lot earlier. We’ve only witnessed serious discounting off the average $50-$65 retail price since the shut off occurred. Frankly, we expected to see lots of $40 price tags for converter boxes quite early in the program.
- Don’t underestimate the popularity of a government subsidy. Most prognosticators seriously underestimated the take rate of coupons within pay TV households. Those old analog sets in the basement or the garage? Good chance they’ve got the box.
- Procrastinators rule. There will be an onslaught at the very end. No matter how early you warn folks about the big day and how many times you tell them (ad nauseam), most are gonna wait.
