Retailers’ DTV Hurdles Include Predicting Converter Box Demand
Challenges for retailers selling DTV converter boxes were highlighted at a Thursday event where government and industry officials touted their efforts to educate consumers about the digital transition. Consumer electronics stores will start selling the boxes at different times and the demand is difficult to predict, CE executives said in interviews. Some chains are further along than others in gearing up for Feb. 17, when NTIA starts mailing $40 coupons for the devices (CD Feb 1 p17).
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Some Best Buy, RadioShack and Wal-Mart stores will have boxes that day, Commerce Secretary Carlos Gutierrez told reporters. He demonstrated a box at the Washington, D.C., Best Buy. The company said it will stock the products at its 900 locations Feb. 17. Many other retailers also will accept coupons and have NTIA-certified boxes on shelves by the time people have the vouchers, Gutierrez said. “A lot more retailers [will] have the converter boxes in stock by the time we make the coupons” available, he said. “This will be the open market, with plenty of demand” for boxes and supply to meet it. More than four million coupons for two million people have been processed, Gutierrez said. “We are off to a great start.”
Retailers have trained 20,000 sales people on the transition, said CEA Vice President Jason Oxman. He said awareness of the transition is rapidly increasing, citing a CEA survey released Thursday. (See separate report in this issue.) “CEA is doing its part with its industry and government partners,” Oxman said. “Everyone has a role to play.” Because each chain has its own planned date to start selling boxes, “it’s hard to generalize for when they will be available,” he said in an interview. “We have a high degree of confidence that consumers will have a wide variety” of ways to get the boxes, including at stores and online. Starting this spring, people can call 877-BBY-DTV9 to order a box if they can’t make it to a Best Buy store, the retailer said in a news release.
It’s “impossible” for CE retailers to predict demand for the devices, Michael Vitelli, Best Buy senior vice president, told us. “Every retailer has to decide ‘what percentage of the market I'm going to be,'” he said. Further complicating matters is the large number of box makers, he said. Best Buy at first will stock one model, its private-label Insignia NS- DXA1 box at $59.99, the retailer said. Best Buy is sourcing the box from LG. The chain may add one or two other models, one of which may have analog pass-through capability, Vitelli said. But educating employees about pass-through “is going to be complex,” he said. “It’s challenging enough” to tell staff about the overall transition.
The FCC soon will act on a complaint from low-power broadcasters that not all NTIA-certified boxes can get those stations’ analog signals after Feb. 17, 2009, FCC Chairman Kevin Martin told reporters. The Community Broadcasters Association said in December that boxes that can’t do pass- through violate FCC rules and the All Channel Receiver Act. CEA has said low-power stations can avoid the problem by switching to digital without an FCC deadline. “Those low- power television stations are not required to make that transition, but they are allowed to,” Martin said.
Martin said the FCC soon will issue an order on DTV consumer education. He circulated it in October but has granted three extensions for the commissioners to vote. The chairman’s last extension for Commissioners Robert McDowell and Deborah Tate expired Thursday. Martin hasn’t decided whether to grant another delay, he said. “I'm hopeful that we'll get it out soon.”
NAB is optimistic that commissioners will change Martin’s draft of the order to exempt from FCC requirements on public service announcements stations taking part in the group’s consumer education program, said President David Rehr. Stations that run PSAs voluntarily “will do a better job” than those forced by the commission to do it, he said. The commissioners “all seemed pretty enthusiastic about a public-private partnership,” he said, citing conversations with them. “I think they're worried that there might be some person out there who might sue the FCC over the mandate” as unconstitutional. But Rehr declined to say whether NAB would agree to air more than the minimum 1.6 PSAs a day it has proposed, to deal with some commissioners’ opinions that that isn’t enough. “If I was the commission, I would take that [NAB offer] because there is a high degree of certainty it will be effective.”