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Home > MyersBizNet Media Business Report > Dollars and (Non)sense of Digital Television

Dollars and (Non)sense of Digital Television

October 25, 2007

Published: October 25, 2007 at 04:18 AM GMT
Last Updated: October 25, 2007 at 04:18 AM GMT

Ever since word began to spread about the February 2009 switch from analog to digital television transmission there has been much talk about the expense of buying new flat-screen high-definition TVs. When news of the big change first broke I heard a chorus of complaints about the financial burden of buying new televisions when old sets were still in perfect working order. There was some grumbling as well from people who own expensive furniture in which they house their TVs. The shorter, wider flat-screen models don't fit the narrow old cabinets unless the new screens are smaller than the old screens, they complained, and what would be the point of that?


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As time has passed, however, there seems to be less complaining about the cost of new equipment. This likely has a lot to do with people actually wanting high-def televisions after being dazzled by them in a store or someone else's home. People don't mind buying a new product if it's something they really want and they feel it's their choice, rather than something they are being made to buy whether they want to or not.

I suspect there will be another wave of outrage in late 2008 and early 2009 when the millions of people who haven't yet thought about the changes to come in the television landscape suddenly realize that their television viewing experience is going to cost them a lot more money above and beyond the purchase of new equipment. I am certain that most young Americans are too busy with the day-to-day business of working and raising children to give all that much thought to the coming changes in television. Similarly, I'm sure that millions of senior citizens would prefer not to think about coping with a huge shift in personal technology, not to mention the financial burden of buying new equipment or paying higher cable bills on their fixed incomes.

Check the above paragraph and you'll see three words rarely mentioned in all the excited reporting about new TV technology on morning news shows and everywhere else: "higher cable bills." Again, this is something few people are thinking about right now, but come February 17, 2009 when the shift hits the fan, attention will have to be paid.


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I was at a dinner party this past Sunday in Westport, Connecticut, at the home of a family I would describe as being in the upper half of the middle class. Mom and dad are educated people with successful careers, and their teenage son is in middle school, and their very busy lives leave little time for watching television, let alone thinking about it. They are Standard Analog Cable Service subscribers. They currently and happily subscribe to the Family Cable basic cable package from Cablevision for a monthly fee of $46.95 plus $5.49 in taxes. They have four cable connections in their home (living room, family room, two bedrooms). They have a VCR or DVD-VCR combo unit attached to each of their four televisions. They do not receive any digital cable networks or pay cable networks, nor do they wish to. They do not have any DVRs because, they say, their VCRs work just fine and they don't use them all that much. They haven't even begun to discuss investing in one or more high-def TVs.

After reading Shelly Palmer's terrific column last Friday here on JackMyers.com I was full of useful information about the upcoming TV switch, which my friends were only mildly interested in hearing about -- until they began to do the math. According to what I read in Shelly's column, as of February 17, 2009 if they wish to continue to receive anything more than local broadcast networks on the four TVs in their home they will have to subscribe to Cablevision's iO digital package. At current pricing that will increase their monthly cable bill by $10 (for the digital service itself) plus an additional $6.25 "rental" for each of the four boxes (plus remotes) needed to enable their TVs to receive the digital signal. That's a boost of $35 per month (before taxes), or $420 per year (before taxes), to continue watching basic cable television on their four TVs in the manner to which they are currently accustomed, albeit with more networks. (The digital service won't give them HBO, or Showtime, or The Movie Channel, or Cinemax, or the Starz and Encore networks, or any On Demand features unless they pay even more money every month. But it does include the terrific VOOM HD networks with their wide-range of series, specials and movies.)

At present my friends pay $629.28 per year for cable, including taxes. That figure's days are numbered.


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"We're going to have to pay more than $1000 a year just to watch television?" my hostess gasped. "That's ridiculous!" (Note: I am quoting Cablevision pricing in this column only because Cablevision is our local cable provider. As you read this, substitute the comparable pricing from your own provider for maximum impact.)

I explained that they might consider not getting boxes for the bedroom TVs because, as detailed in Shelly's column, they will still receive local broadcast channels even without boxes after the February 2009 switch (until February 2012, when they will go away, too).

They didn't like that idea. As it happens, most of their viewing preferences are on basic cable. They watch a lot of USA Network, ESPN, History Channel and HGTV, and their son loves Spike.

Since I had already dimmed the dinner party merriment, I preceded to further depress my hosts. If they choose to shell out the $6.25 (plus taxes) per digital cable box/remote, I explained, their VCRs would not be as useful as they are now. (With a digital hookup you cannot watch one network while recording another network on a VCR, nor can you program it to record shows on multiple networks in one evening, because the channel represented by the number on the set-top box is the only one the VCR can access, and digital cable boxes don't change channels by themselves, at least not in ways that accommodate VCRs.)

If they want to maintain the ability to freely record and watch programming on their four TV sets, I told them, they will have to rent four set-top digital cable boxes that include Cablevision's DVR service. The cost: An additional $10 per box (before taxes), which would add yet another $40 (before taxes) to their monthly cable bill, for a grand total (at current pricing) of $121.95 per month (before taxes).

"You can always watch television on your computers instead," I laughed. (They pay Cablevision an additional $44.95 per month for Internet access.) They weren't interested. I asked if they had read David Pogue's story in the October 18 edition of The New York Times in which he rated the networks' efforts at presenting their programming on their Web sites. They hadn't.

I thought of Pogue's insightful comment at the end of the piece: "Almost nobody wants to watch TV on a computer screen." (Try saying that out loud at a media gathering. You'll be the least popular person in the room.) People might want to watch recorded programming on a bus or a train or a plane, on their iPods or their laptops, but why in the world would anyone choose to do so at home where they have access to glorious big screen TVs? Kids, maybe. But grown ups?

At this point I thought of my next-door neighbors, a couple without children that made the switch to Cablevision's digital package a year or so ago, complete with a DVR. They only have one TV (a giant plasma screen), so they only needed one box. (When they switched, their monthly bill increased by $26.25 per month before taxes. That's $10 for the digital service, $6.25 for the set-top box and $10 for the DVR service.) They have enjoyed their deluxe new television-viewing experience, though they are the first to point out that they would not pay any more money to enjoy it on additional TVs. Also, their digital set-top box has twice malfunctioned in the last year, each time necessitating a time-consuming trip to the nearest Cablevision store (several towns away) for a replacement. (I'm not saying every set-top box from Cablevision will break down one or more times per year. But imagine the total time loss if multiple boxes were to require such special care.)

Getting back to that Westport dinner party: My hostess was distressed by all of my television talk. It's not like she can't afford to spend all that money every month on television. She simply doesn't want to and she resents feeling made to do so. For a moment I thought she was going to drop (like Marie Osmond would the following night on Dancing with the Stars). Instead she did what so many people do when they begin to think about all of this: She stopped thinking about it and tabled the subject until February 2009.

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