With digital transition, more focus on smaller TVs

Cable and satellite companies saw a boost in first quarter earnings from the digital transition.

Comcast Corp and Time Warner Cable Inc posted higher-than-expected quarterly profits, and raised the possibility of more subscriber additions in the current quarter. But both also said customer growth will likely slow in the second quarter compared with the first quarter, with the U.S. economy not yet out of the woods.

COSTLY FOR INDUSTRY

The digital TV transition was initially set for February but was delayed by Congress when it became clear that nearly 6 million households were not yet ready.

Currently, about 2.5 percent of American TV-watching households, or 2.8 million, still rely on antennas to receive television shows this week, according to government officials who cited a study by the Nielsen Company.

The transition ordered by Congress to free up analog signals for public service use has been costly.

Broadcasters spent $5 billion in infrastructure upgrades and another $1.2 billion on consumer education campaigns, according to the National Association of Broadcasters.

The government is also providing AmeriCorps volunteers to help install the DTV boxes.

Commerce Secretary Gary Locke told reporters he was surprised to find elderly consumers better prepared for the transition than younger, Internet-driven consumers. "Maybe it's because they (the younger consumers) rely on new forms of media for news and programing and don't care about television anymore," Locke said.

(Reporting by John Poirier; Additional reporting by Ian Sherr in Chicago; Editing by Gary Hill)