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Cheap converter boxes: Retailers not on board

July 17th, 2007

“What this country needs,” in the words of Thomas Riley Marshall, “is a really good five-cent cigar.” Those words were said in 1917, when Marshall was Woodrow Wilson’s vice president. But America’s longing for bargain-priced consumer products endures. Today we’re waiting for an affordably priced, cigar box-sized device—the digital TV converter.

A DTV converter box hooks up to an antenna-equipped analog TV, allowing it to display digital channels. Several electronics manufacturers have signaled plans to market low-priced converter boxes, which consumers can purchase using $40-off coupons from the U.S. government. The subsidy program begins in January 2008. Thomson announced plans for an RCA converter box, initially priced at $125, in 2005. Anticipated prices for digital TV adapters have now dropped to the $60 range.

The question is, where are they?

Retail stores have shown little eagerness to introduce DTV converter boxes to the public. Thomson says retailers do not want any coupon-eligible boxes until the government subsidy program kicks off in 2008. A DTV converter from LG is also due next year. Shipping dates for other manufacturers are not yet known.

Best Buy will not say when, or how widely, converter boxes will be available in its stores or on its web site. “Unfortunately, at this point it’s too early to provide any specific answers,” Best Buy spokesman Brian Lucas told Digital TV Facts, “because the details of converter box availability, pricing and the coupon program are not set yet.”

Last year, Circuit City’s then-chairman voiced his disdain for converter boxes. The number-two consumer electronics chain has not responded to recent requests for comment.

A proposed government requirement that retailers document DTV consumer information plans and employee training has met with resistance from the Consumer Electronics Retailers Coalition (CERC), a trade group that represents large retailers.

Several details concerning the DTV converter box coupon program have yet to be decided, including procedures for using converter box coupons for online purchases. Those procedures are part of negotiations with contractors vying to administer the coupon program, according to Anthony Wilhelm, consumer education and public information director at NTIA.

The plans of Best Buy and other CERC-represented retailers should become clearer after NTIA, a Commerce Department agency, announces the selection of its DTV coupon contractor. Awarding of the contract remains on schedule for August 15, said Diane Trice, a contract specialist at the department. The government’s DTV converter program could subsidize more than 30 million boxes, practically guaranteeing a ready market for the devices.

Manufacturers are capable of delivering the boxes, surely. HD set-top boxes are available today for the ATSC digital television system used in the U.S., though prices are generally much higher than the anticipated cost of a basic, standard-definition (SDTV) converter box. DVD recorders with built-in DTV tuners—from RCA, Philips/Magnavox and other brands—are already on the market. In Britain and other countries, inexpensive converter boxes are already an established product.

A prerequisite for low entry-level pricing, however, is mass production—and retailers may be the ones holding up production. “Retailers are now planning for 2008,” Thomson spokesman Dave Arland said in an email interview. “We won’t be making Coupon Eligible Converter Boxes until we have orders for them.”

Earlier:
RCA slashes price on DTV converter box
Hey, Best Buy: We need analog labels, digital converters
Converter box preview: Nice work, LG
Circuit City turmoil continues

Comment


  1. Hans says:

    I can think of a really simple reason why the retailers don’t want converter boxes on the shelf now. They’d rather sell you a nice expensive big-screen TV instead of a low cost converter for that old TV.

    Most consumers I talk to think they have to buy a new TV, and further assume it has to be “HD”. They don’t even know what ATSC means. I think the retailer are happy with that.

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