EchoStar Holding Corp., the set-top box maker that sells the Slingbox, introduced a digital-analog TV converter that U.S. consumers can get for free and use to watch older sets after the country moves to all-digital broadcasting in February 2009.
The boxes, called TR-40, will sell for $39.99, but the National Telecommunications and Information Administration began offering $40 coupons for them on Jan. 1. Each household can get up to two coupons.
Millions of households do not have digital TV sets.
"That means that every home in America, for two TV sets absolutely free of charge, can convert to digital," EchoStar chief executive Charlie Ergen said. "There's no reason the digital transition can't take place in February 2009, and there's no reason it'll cost the consumer a dime."
EchoStar will lose money on the boxes but will benefit from the interaction with new customers, Ergen said. The converter boxes were expected to cost $50 to $70.
"Maybe they'll just feel good that you helped them with their problem of TV and they feel good about you and they buy something else from you down the road," Ergen said.
EchoStar's device will be available online and at DISH Network satellite retailers in March.
EchoStar plans to sell for an undisclosed price an upgraded converter, called the TR-50, that adds a hard drive and a digital video recorder. It does not qualify for the government coupon.
LG Electronics Inc. debuted a digital-analog converter box under the Zenith brand at this week's Consumer Electronics Show in Las Vegas. It will be available nationwide next month for $59.95.
The company will make a profit, but "there's not a lot of margin in it for anybody," LG spokesman John Taylor said.
The product will offer "crystal-clear" images even on older televisions and have such digital features as an electronic program guide, Taylor said.
The Nielsen Co. estimates that 14.3 million households, or about 13 percent of the 112.8 million total television households in the nation, rely on over-the-air television broadcasts for programming.
To request a coupon, consumers can apply online at http://www.dtv2009.gov. The government also has set up a 24-hour hot line to take requests, 1-888-388-2009.
Congress, in ordering the transition to digital broadcasting, set aside $1.5 billion for the coupon program, which will fund 33.5 million coupons and other costs.