The short answer is:
The medium answer is:
It’s like the music industry. Remember how sound quality improved as the music industry went from the 8-track to the cassette to the CD to digital files? TV’s distribution is due for an upgrade and will result in improved picture and sound quality.
The long answer is:
There is a spectrum of signals available for companies to distribute information. The various signals in the spectrum have different levels of capacity. The digital signal can accommodate more programming of a higher technical quality than the analog signal can.
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Currently many entities use different parts of the spectrum. Public safety communications (think police squads, fire departments, and rescue teams) use part of the spectrum. Wireless devices (from radios to smart phones) use part of the spectrum. Broadcasters also use part of the spectrum.
Switching to all-digital broadcasting will free up valuable parts of the spectrum. The extra spectrum can be marked for public safety use and even auctioned to companies to accommodate increasingly advanced services (like wireless broadband).
For TV watchers, it means better picture and sound quality, as well as more programming options. You can watch “standard definition” (SD) digital programs or super sharp “high definition” (HD) programs on DTV. (Note: DTV is not the same thing as HDTV, but they do work in concert). Broadcasters can even distribute several programs simultaneously on one broadcast channel, which is called “multicasting.” This means more choices for you to pick from when watching TV. And finally, DTV can provide interactive video and data services (like interactive voting) that are not possible with analog technology. So, in short, it’s better!