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Analog TV: One Year And Counting Till End Of An Era

CNBC.com

A year from now, the 11 percent of American households that still get their TV over the airwaves will have their screens go black, unless they upgrade. Analog TV will be dead, as of Feb 17, 2009, and we will be living in an all-digital world.

What does that mean? Well, if you bought a TV after 1998, you're fine. If you have cable, satellite TV, or TV service via a telecom provider, don't worry about it.

But millions of Americans are getting TV only via an antenna, and they'll have to make a change. The government is giving $1.4 billion in subsidies to help in this conversion--giving $40 coupon for a converter box (they run $40 to $60) they can buy at Best Buy , Wal-Mart , and a bunch of other retailers. (Though I bet it's not material to the stock prices, that sounds like a nice little boost in traffic).

And many Analog Americans will simply upgrade, and start subscribing to cable or satellite TV. They'd probably sign up for the lowest-level Comcast or DirecTV service, since they haven't been paying anything for TV until now. The company that could grab the most customers from this transition is Echostar and its Dish network. Dish offers the lowest-cost packages and is making a real push to grab some of those lower-end consumers.

But the companies like Echostar could have the most to lose. The most price sensitive customers could simply upgrade their TVs and then opt out of any pay service, dropping their monthly payment, and opting to get the new digital transmission of the basic channels over the air.

Of the satellite and cable companies, Morgan Stanley's Ben Swinburne tells me that DirecTV is the most insulated--it has the highest end customers, who won't budge. But I also doubt that it'll get any boost from this switch, it's service is simply too expensive.

So, it probably evens out. The cable and satellite TV operators will probably add some new subscribers, mostly on the lower end. But they also might lose some of their lowest-end consumers who opt out of paying anything.

Will see how it all shakes out. And be warned, unless you've got a DVR or TiVo, you'll be watching a lot of public service ads on this in the next 12 months.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.