[opendtv] Re: STB hunting

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Tue, 24 Jan 2006 10:12:00 -0500

At 6:43 PM -0500 1/22/06, Manfredi, Albert E wrote:
>First of all, the market for OTA boxes is roughly as big
>as the market for DBS. About 20 percent of households.
>And secondly, I am baffled by the traction negativism
>seems to get. You weren't sounding quite so negative when
>you first tried this little guy. Why the change of heart?

Some bad assumptions here Bert.

First, the number of DBS subscribers in the U.S. is now in excess of 
27 million, or nearly 25% of all U.S. homes.

Second, it is simply illogical and wrong to assume that every U.S. 
home that now receives NTSC broadcasts is a potential customer for an 
ATSC receiver. Why?

  1. The number of U.S.  homes that still rely exclusively on the NTSC 
service is unknown, or at least the numbers that are quoted from 
different studies are conflicting. Your assumption is based on 20% of 
U.S. homes using the service. This MAY be true, however, the number 
is influenced by home that still have one or more TVs that can 
receive NTSC broadcasts in addition to any multi-channel service to 
which the home subscribes. Based on all of the available reports, one 
would have to conclude that at least 5% of the 20% subscribe to a 
multi-channel service today.

  2. People may still use an ATSC receiver on occasion, but it is 
unlikely that they will invest in an ATSC receiver to keep an old set 
working after the cut-off. I can't quantify this exactly, but it is 
probably in the range of 15-30% of U.S. homes that now still use the 
NTSC service on occasion.

  3. When (if?) a family actually faces the reality that they will no 
longer be able to receive Free NTSC broadcasts, they will have 
options, one of which is to buy an ATSC receiver. If and when this 
day comes, you can bet your last dollar that the DBS and cable 
companies will be putting together low cost packages to attract the 
holdouts. Again, it is not possible to predict the exact percentages, 
but it would be fair to say that a significant number of homes will 
elect to switch to a multi-channel service, not ATSC.

4. A sizable percent of the homes included in the NTSC only category 
do not watch TV at all, or only on rare occasions - these homes will 
not buy an ATSC STB.

5. By the time the NTSC service is turned off, there will be other 
competitive options, centered around new IPTV services and TV 
programming delivered via the Internet. It is quite feasible that an 
Intel powered media center will cost no more than an ATSC receiver by 
the time this happens. More important, many of the homes that do not 
subscribe to a multi-channel service are young, lower income 
demographics who are growing up with the Internet, and will be more 
likely to choose a solution that does not involve either OTA 
broadcasts or subscription to a multi-channel service.

Bottom line, I do not see the market for ATSC STBs ever reaching 10% 
of U.S. homes, and more likely it will be below 5%. Note that this 
assumes no change in the U.S. broadcast business model.

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