It looks like the price of a digital-TV-to-analog converter box just went down to essentially nothing for those with government-subsidized coupons.
EchoStar Communications announced Monday that it teamed up with Sling Media to brand a converter box that it said will comply with the National Telecommunications & Information Administration's specifications for devices that can be covered entirely by the NTIA's subsidized $40 coupons.
And at a price of $39.99 at retail, according to EchoStar, it will cost only the price of the sales tax, if any, on the box. And in the handful of states without sales tax, the government could even save a penny.
The news came as the the 2008 International Consumer Electronics Show opened in Las Vegas, where the NTIA is unveiling its coupon -- more like a gift card with magnetic strip and security hologram -- which households could start applying for -- up to two per household -- Jan. 1.
The boxes have been expected to retail for $50-$70, but EchoStar may have just changed those price points.
EchoStar said it would also market a higher-end box with digital-video-recorder functionality (DVR boxes do not qualify for the coupons).
EchoStar chairman Charlie Ergen agreed that the TR-40’s price point is “a dramatic announcement,” considering LG Electronics' price point of $59.95, and conceded that EchoStar would lose money on the product. But he said that if the product is successful, it will free up broadcast spectrum, which is of benefit to everyone, and perhaps buy EchoStar a little goodwill when a free-over-the-TV viewer decides to step up to a pay TV service.
“No company has really stepped up to make this transition happen,” he added. “We’re saying that we will make a product available for $39.99, and there’s no reason the digital transition can’t take place.”
The TR-40 -- which will be sold under both the EchoStar and Sling brands -- will be sold at online, at EchoStar retailers and at the 5,000 brick-and-mortar retailers that currently sell Slingboxes, Sling chairman, founder and CEO Blake Krikorian said.
The higher-end TR-50 won’t be eligible for the NTIA coupon, as it has an internal hard drive for DVR functionality. EchoStar hasn’t release pricing for that model, but Ergen said that product wouldn’t lose money and speculated that at “$59.95, maybe we make a little money.”
The NTIA-compliant TR-40 converter box will be available "in limited quantities" starting in March, said EchoStar, with "unlimited quantities" starting in June.