I'm not sure this will happen but if I were doing the planning for the upgrade, I would tie it to an ROI formula.
Consider the cost of a subscriber lost to be $100 per month. Consider an HD DVR and a regular receiver in another room wholesale cost to upgrade to be $500 + $200 or $700 for that subscriber-
If you tell the subscriber he will have to pay "cost" he will most likely walk and E* will lose $100 per month. If they give the pair away, they keep the subscriber but BE in 7 months, or figure a year if they discount the cost of programming into the ROI formula.
But, what if the customer walks 5 months after receiving the equipment?
The best thing to do would be to require a graduated investment downpayment based on the subscription vs. the hardware. e.g. If the subscriber has 4 receiver's to replace with one being a DVR and only pays $35 a month programming charges, his replacement equipment cost would be much higher than say for a subscriber who had a single DVR and pays $120 per month programming.
I have oftern said, with these multichannel providers, it's all about programming, never about equipment. So, if you can lock a subscriber into a $100-$120 monthly amortization but only requires a single HDDVR, why not make his transition "free" while the guy who's amortization is $30 per month but has several receivers, should have to pay more to transition as his ROI to E* would take 3 times longer.
Another way is to require a longer commitment depending on the monthly ROI as well.
But, if E* thinks they can simply say, on this date everyone will need to buy new receivers because we are obsoleting your existing equipment. The equipment cost will be similar to what you just paid, then they should expect to be closing their doors as 90% of the subs will walk to other services. I don't care if they have the best HDTV programming around, the competition, even cable is "good enough" considering what having the same picture in MP4 vs. MP2 will get us.
Yes, I think they will need to consider the value of a subscriber based on the monthly revenue to determine what each will have to pay or commit to when the upgrade rolls around to reality.
But in any case, history tell us that what is first offered will be at early adopter cost and when the shut down happens will be the best deals. In other words, those new MP4 HD channels will require you purchase the full retail price of the MP4 equipment, but later when the shutdown happens on existing channels, you get the same equipment for cheap, or, better equipment for cheap.