The Australian Federal Government is exploring the idea of giving away free digital TV set top boxes. However resellers have warned to be careful.
Reported moves by the Federal Government to investigate the possibility of funding the mass distribution of set-top boxes could be a bonanza for several vendors. Last month the Minister for Communication Helen Coonan told SHN that she was keen to speed up the migration of consumers to digital TV after reports that only 13% of Australian had taken up the new service. The proposal to government fund set top boxes could cost the Federal Government up to $500 million dollars.
Rob Kester, Director of World Wide Sales for Legend Digital said that a roll-out of that scale would require something in the region of $500 million dollars. Legend Digital was the first company to come out with a Digital TV Set Top Box at $99, but Kester points out that it can only do that because of the lower overheads it has over some other multinational manufacturers and that devices less than that (even at wholesale pricing) you would have to ask questions about.
“The Government would have to be wary of endorsing a device that didn’t match up in terms of quality,” he said, “I don’t think it would look good on the Governments part to be endorsing something that wasn’t up to scratch.
However the Government would get this investment back by selling the freed up analogue TV spectrum to digital radio providers. The original date of 2008 set by former communications minister Richard Alston to switch off analogue signals and move to 100 per cent digital broadcasts has proved unrealistic with millions of Australians still using CRT TV. The move if it goes ahead could accelerate the pull through of LCD TV in particular 32″ LCD TV’s that are set to drop to sub $1,000 if not lower by 2008.
According to Michael Sainsbury writing in the Australian newspaper Helen Coonan is keen to make the move sooner rather than later, canvassing the set-top box distribution as part of an overhaul of media rules slated for next year. Digital TV signals give vastly increased picture and audio quality and also free up spectrum for possible extra channels and interactive applications such as those provided by Digital TV.
But Australians have proved reluctant to buy the boxes, which retail at between $99 and $700 or more and which at this stage only offer improved quality and no extra services.
Kester believes there is scope for increasing consumer interest in Digital TV simply by promoting the existing advantages it offers. “Promoting the existing benefits might help for a start” he said.
“There are a few other elements as well, when you put a HD compliant screen with an HD box you are talking about some key differences to the viewing experience. The price drop in LCD panels is making consumers look at HD screens with a little more interest.”
Len Wallis of Len Wallis Audio in Sydney said the move could cause major headaches for resellers. “At the best of times set top boxes are problematic and the thought of millions of people all getting at set top box at the same time is going to result in people calling resellers to configure them or fix them. This concept has to be well thought through”.
Kester also pointed out that a lot of people don’t even know about ABC2 and the SBS World News channel, he points out and many have not seen or experienced the improved quality of DTV.
“The up take in Digital TV over the last two quarters has been significant,” noted Kester.