With apologies to the rock band R.E.M., and to our readers for that sensationalist headline, the end of the analog world is rapidly approaching. Last week, retailer Best Buy announced it has pulled all analog television products from its stores ahead of the planned 2009 U.S. switch to digital television. The stores have been instructed to stop selling analog TV products by Oct. 1 and it will now sell only digital video tuners.

Aldo Cugnini
Analyst

As is now becoming more widely known, U.S. broadcasters will be required to terminate analog broadcasting on February 17, 2009, as dictated by Federal law. In anticipation of the analog cutoff, the Federal Communications Commission has required manufacturers to stop building analog-only sets as of March of this year, and retailers to post warning messages on all remaining analog sets in inventory.

The move by Best Buy is said to be one to help boost awareness of the analog cutoff. In practicality, it was also prompted by lagging sales of the units, together with a conservative attitude to avoid fines - the Commission having already issued more than $3M in fines or citations to more than 150 companies including Wal-Mart, Radio Shack, Fred Meyer, Syntax-Brillian and Maxent.

Best Buy said it was the first electronics retailer to publicly announce an exit from analog sets. "The majority of people don’t know about (the analog cutoff)," Mike Vitelli, Best Buy senior vice president of electronics, said in an interview, and Vitelli estimated that 25 million to 30 million households with analog TVs would be affected by the change. "The analog TV portion of our assortment has been dwindling each year," Vitelli said, adding, "Customers can now be sure that any television they purchase at Best Buy will be fully compliant with the digital television transition. And for customers who aren’t in the market for a new television, we can help you find the best solution to meet your needs."

Both Best Buy and Circuit City have announced their intent to stock shelves with DTV converter boxes (needed to prevent the obsolescence of existing analog TVs), and to honor the $40 coupons that will become available from the NTIA starting in January. It is not known when the boxes themselves will first become available, although manufacturers such as LG (Zenith) and Thomson (RCA) have suggested it will happen early in the year.

The decline of the analog TV follows that of analog sound and video recording devices, with one big difference: a government mandate has made the difference between a slow and a relatively rapid transition. (Perhaps the last holdout will be that of radio broadcasting, and with no sunset date on the books, the takeoff of digital radio services may take some time.) Although VCRs may soon be supplanted by DVD recorders, the former devices are still being used to play vast home libraries of VHS tapes, and will continue to do so for some time. It may be these and game consoles which retain additional use for existing analog sets.

Also consider that an interesting side problem now looms as many owners scrap their analog TVs for digital ones. Will there be a glut of new pollutants at refuse and land fill sites? Perhaps there’s an opportunity here for someone to start a reclamation/recycling business for old lead-laden analog TVs.

In the meantime, one potential source of consumer confusion appears to be fading out, and that should be good for DTV sales. As R.E.M. put it, "And I Feel Fine."

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