Monday November 23, 2009 – Myra Moore
It’s officially over. The last U.S. DtA converter box coupon has expired and the world’s largest analog shut-off for high-power broadcasters program comes to a close. DTC’s latest estimate for converter boxes shipped into the market is 46.2 million. (From DTC’s converter box tracking service)
DTC estimates the converter box program generated more than $2.5 billion in retail revenue, which came in pretty handy in the midst of the great recession that had many consumers staying out of the stores. They may have not been high-margin sales, but manufacturers and retailers were plenty happy to move those boxes.
How will box suppliers and retailers replace that revenue? With the holiday shopping season officially beginning this week (arriving earlier every year like store Christmas decorations on the heels of Columbus Day), and consumers only unclenching their fists by a small measure, the number of items that can replace the converter box is limited. The stripped-down portable DVD player is one candidate. Many of these are retailing in the $50-$80 range.
Perhaps a more interesting category is the emergence of what I’ll call “tea cup” TVs – little bitty 7” and 9” screens complete with an ATSC tuner, and in some cases, a DVD player. Most TV-only models hover in the $100 range but as we get closer to the end of the holiday selling season, off-brand sets will probably be heavily discounted and perhaps star as loss leaders in the big-box stores.
Some suppliers are finding efficiencies by using existing form factors like digital picture frames to come up with a tea cup TV to carry around in your purse, take to the pediatrician’s waiting room, or in the back seat of the minivan (although over-the-air reception isn’t going to cut it while in motion. Better buy one with a DVD player for the back seat).
And DTC believes that a DtA converter box market will continue for a couple of years. We estimate that there will likely be another 2 million units shipped in the next few years. For one or possibly two vendors and a natural retailer (think Radio Shack) for such a product, the DtA converter box market will continue to live – quietly.
Source: DTC
