The Big Picture
By Jim Hanas
FEBRUARY 8, 1999: A picture, they say, is worth a thousand words. At that rate, the Mitsubishi HD-1080 16:9 will cost you about $6.50 for every a, an, and the.
From the retail perspective here in Memphis, its not going to be a set for everybody. Right now they are still expensive and I really dont expect that the TV sets themselves will come down that much, says Richard Dorsey, sales consultant, standing in the glow of a 375-pound high-definition monitor in the showroom of Modern Music Audio/Video. Youll see the prices come down, but I wouldnt expect to see the prices come way down.
Actually, it will happen. Eventually. It has to. Current government regulations call for the transition to digital television of which high-definition television (HDTV) is the crown jewel to be complete by 2006, at which time analog television, TV as we know it, is scheduled to cease. For that to happen, 85 percent of viewers will have to be equipped to receive digital signals by then, whether via rear-projection sets like the big Mitsu or through set-top converter boxes that can digest digital signals and feed them to present analog sets, or something in between. One way or another, prices will have to come down.
There are other factors involved in the rollout of the next generation of television. Theres signal availability and the availability of programming. But ultimately, the broadcast industry which sold the government on the idea of HDTV a decade ago now has to sell it to the public.
The picture itself certainly lives up to the hype. It is, as many have observed, like looking out a window. Watching a football game, one can discern every divot in the turf and every face in the crowd. Nature programming is breathtaking. And with a 16-by-9 screen ratio (as opposed to the 4-by-3 ratio of todays television), HDTV rivals the panoramic clarity of the big screen.
Something like 90 percent of the people who see it say, Yeah. Now I get it. Thats a beautiful picture. I want one, says Gerry Kaufhold, principal analyst for Cahners In-Stat Group, a Massachusetts-based high-tech market research firm.
But first they have to see it. Less than a year ago, a poll conducted by the Washington-based Consumer Electronics Manufacturers Association found that more than 40 percent of the public hadnt even heard of high-definition television. Since then, some 40 stations have begun broadcasting digitally, and by the end of this year, Kaufhold projects that 160 more will begin broadcasts.
In smaller markets like Memphis, however, digital broadcasts arent mandatory for another three years. For now, the 65-inch, $6,500 Mitsubishi in this East Memphis showroom is a set without a signal, running streaming nature footage and a forgotten college football game.
Strictly speaking, HDTV is already here. But when the technology will actually take hold and change the way we watch television is up in the air, and the precise form the next generation of television programming will take remains an open question.
he switch from analog to digital television (DTV) is like the switch from black-and-white to color television if black-and-white sets had eventually become obsolete. Its like the switch from albums to CDs, if the latter had been required by law. Its revolutionary scope has only imperfect parallels in the history of electronic media.
In his book Defining Vision: The Battle for the Future of Television, journalist Joel Brinkley more accurately compares the advent of high-definition television in the U.S. to the space race, sparked as it was by the advent of high-definition televisions in Japan in the late Eighties, which offered unprecedented picture clarity on a wide theatre-type screen.
Almost overnight, high-definition television became a powerful icon, a symbol of everything that was wrong with the nation, Brinkley writes, citing the view of one FCC commissioner who observed, This is the same kind of thing as Sputnik in 1957.
Originally, back in the Eighties, explains John Earnhardt, director of media relations for the National Association of Broadcasters, the Japanese were developing high-definition television in analog, and Congress got involved, the White House got involved, obviously broadcasters were involved. And it was kind of like a competition. We didnt want their technology to take over the marketplace, so development started on HD and it came up with digital as a more effective, efficient, and higher-quality way of delivering those signals.
There were other motives as well. Specialized services were beginning to cut into the channels reserved for broadcast television as the FCC started allocating the unused portion of the UHF band for cellular and other services.
The original idea was that broadcasters were starting to lose channels, says Sid Shumate, broadcast engineer and appraiser for BIA, a Washington-based consulting firm. To keep that from continuing to happen, the broadcasters were saying, Well, is there anything we can tell the FCC to keep them from taking away more channels from the broadcaster? And the point was made, and they decided to use this point, that if were going to upgrade to a newer system were going to need those extra channels for the newer system, because the system may either use wider channels or it would necessitate the use of second channels for the conversion. And thats what got the ball rolling in the first place.
Initially, development of HDTV in the U.S. followed the Japanese model, using analog signals to transmit high-definition broadcasts. Eventually, this was scrapped in favor of a plan forwarded by a so-called Grand Alliance of developers to transmit such broadcasts digitally. Digital broadcasts, as opposed to analog broadcasts, transmit programming as data 1s and 0s. This has the advantage of reducing interference and, more importantly, of allowing compression so that an HDTV signal can be delivered over the same band-width that now delivers a single analog channel.
With the passage of the Telecommunications Act of 1996, the move to digital began in earnest. Television licensees were granted a second channel free of charge, in what even then-Senator Bob Dole decried as a big, big corporate welfare project to begin digital broadcasts. Since digital signals are not backward-compatible with analog sets as color broadcasts, by contrast, are compatible with black-and-white sets stations will broadcast on two channels (one analog, one digital) until 2006, at which point broadcasters are scheduled to surrender their analog channels for municipal use and auction to other service providers.
Although the first rollout deadline is not until May when all affiliates of the four major networks in the top-10 markets are required to go digital some 40 stations are already on the air, not only in top-10 markets but in smaller ones like Madison, Wisconsin, and Jackson, Mississippi. The affiliates in the top-30 markets are required to be on the air by the end of this year, with the remainder of stations, like those in Memphis, the nations 43rd largest market, coming on by mid-2002.
The good news here, says Kaufhold, is the FCC has been kind of nervous that the broadcast community was not going to jump in and start rolling out this digital transmission according to the plan, and our surveys show that by the end of calendar 99 there will probably be about 200 television stations on the air with a digital transmission, and the quota from the FCC called for 120 stations.
But those signals are only slowly reaching consumers. According to the Consumer Electronics Manufacturers Association, only about 13,000 digital sets have been sold thus far, and analysts project that sales in the next 12 months will come to just under a million sets, compared to the average of 23 to 25 million conventional sets that have been sold annually in each of the last five years. Digital is out of the box, but how, or how quickly, it will catch on remains to be seen.
The argument on both sides is: We cant sell sets until theres programming out there, and the programmers are saying we cant really put out programming without sets, says the NABs Earnhardt. So theres the chicken-and-egg argument there.
n February 27, 1998, a dozen heart monitors in nursing stations at Baylor Universitys A. Webb Roberts Hospital in Dallas unexpectedly quit. An investigation into what went wrong with the signals transmitted from equipment monitoring patients recovering from heart surgery led to a local television station, WFAA-TV, which, as it turns out, had flipped the switch on its digital transmitter.
An unanticipated result, to be sure, but one that serves as an apt metaphor for the uncertain future of digital television. Important issues remain to be resolved before that future comes into sharper focus.
For one thing, experts agree that the spread of digital is largely dependent on cable systems carrying the signals, something which they are not yet required to do and to which they are somewhat resistant.
Seventy percent of television viewers are watching cable, and while the local broadcasters signal is important, all these cable networks Turner Networks, Turner Classic Movies, HBO you cant get those anywhere except on cable, says Kaufhold. So obviously cable has to get ramped up to deliver HDTV.
Carrying locally originating digital signals looks like a burden for cable systems, since it doubles the number of stations a particular system is required to transmit. Instead of four local signals, for example, they would suddenly have to carry eight, the analog and digital version of each local station. And since each of those channels is capable of transmitting more than one broadcast, digital television will multiply the number of channels on the system competing with the cable company for advertising dollars.
The cable companies are resistant, says BIAs Shumate. Its not in their best interests to carry HDTV, all things considered. Not in their best interest in many cases, so theyre reluctant to do it. But the broadcasters are telling the FCC, hey, if you want this to fly, 70 percent of the country have at least one TV set in their house hooked to cable. So theyre basically telling the FCC if they want this DTV idea to fly, they have to require cable companies to pass it.
The FCC has said it will rule on whether it will require cable systems to carry local digital signals in the first quarter of this year. Locally, Time Warner officials say digital cable is currently being tested in some markets and should be set to roll out in Memphis by the end of the year.
Another issue is programming. Some sporting events, including last Sundays Super Bowl, have been broadcast in HD, and NBCs Tonight Show with Jay Leno and CBS Late Show with David Letterman are expected to begin broadcasting in high-definition some time this year. HBO has long been a staunch proponent of the format and its HD broadcasts will likely be carried by direct satellite providers in the near future. But widespread high-definition programming is still down the road.
Its going to be September of 99, which is the next new programming season, before we start to see any programs, any weekly television shows, that are produced in HDTV, says Kaufhold. And my prediction is that its going to be 2000 before theres enough TV sets out there for it to really be a big enough market to have a program. Sometime in late 2000 therell be some hit TV program that does something in HDTV that people will want to see it in HDTV.
Predicting the future becomes even more complicated, however, by the fact that high-definition is only one of the capabilities of digital television. Of the 18 standard formats for DTV adopted by the FCC, only half are high-definition formats. The other half are standard-definition (SDTV) formats, which deliver a digital picture with the same resolution as todays analog sets. Regulations, furthermore, only require that stations deliver at least one of the 18 sanctioned formats, not necessarily HDTV. This opens up a range of possibilities.
We are making a transition to digital television, says Frank Chebalo, vice president of operations and engineering for the New York Times Company Broadcast Group, which locally owns WREG-TV Channel 3. Once we get there, then we have another series of choices that we can make. High-definition is the most pristine image, having not only a wide-screen characteristic but extremely high resolution. But digital television is also comprised of a number of other components.Within that same digital stream of information, if we choose not to do high-definition, we can do multiple channels. As a matter of fact, we could do four standard-definition channels very easily or we could do two for a while, or we could do a mix. At the moment, a mix looks attractive.
Also entering into the mix will be interactive elements and transmission of other sorts of data, be it audio or Internet access.
This is a time where its possible to experiment, shall we say, to find out what works, says Shumate. Everyones trying to find out a way to make money with it. Thats the main problem that the stations have with this. Most of them dont see a business plan to go with DTV, but it is a forced conversion that the FCC has put on them.
If youve seen a business plan, send it to me because I dont think theres too many out there, says Earnhardt, adding that however broadcasters end up defraying the roughly $16 billion cost of converting to digital, its high-definition that will likely serve as the main draw for consumers.
I think when consumers see high-definition television theyre going to want it, and thats been the trend whenever theres been demonstrations, he says. Were well aware that theres going to be experimentation with different ways of distributing programming and multiplexing and data-casting and the like, and were aware of that, but I think thats farther down the road and as people become more aware of it. Its a market-driven process, but we really think that high-definition is whats going to drive the transition.
nderstandably, high-definition television sets arent moving too briskly in Memphis. Modern Music Audio/Video says theyve sold 10 or so. Berclair Television, which likewise carries the Mitsubishi line, says its sold a dozen.
The only thing thats really holding it up is the signal, says Modern Musics Dorsey.
Meanwhile, area stations are gearing up to spend the $8 million to $12 million the NAB estimates it will cost to take a station digital.
It changes all the time, says WREG-TV Channel 3 general manager Bob Eoff of his stations timetable for the switch. Initially we were going to be on this year and weve slowed that process down. Currently, Channel 3 is preparing its East Memphis tower for the necessary equipment and making internal changes to digital equipment.
I think its going to be largely driven by what happens in larger markets, says Jack Peck, general manager of WPTY-TV Channel 24, which is constructing a new tower in Brunswick, Tennessee. Because as they go to digital, as they increase the amount of programming, its really going to come down to how many people buy the sets. If its similar to color TV and its moving at a pretty brisk pace, I think youre going to see everybody accelerate their efforts.
Memphis digital deadline may be more than three years away, but chances are good that well see a station go digital sooner, perhaps by the end of 1999.
I think theres going to be a station on the air in Memphis by the end of the year, says Kaufhold. So whoever the leading station is in your market is probably going to generate some goodwill and some free PR by being the first on the air with a digital signal. First in the market with digital. That never goes away. That becomes a logo they can write forever.
And if that never goes away, imagine the self-promotion bonanza that awaits the first station to produce and transmit digital news.
I really think thats what companies are going to be looking at is what percentage of the population has HDTV and then kind of put that in line with when we are going to go digital with our news, says Peck. And like anything else, therell be some benefit, I dont know how much, for those who go first. Its a big promotional topic to say that youre the first to shoot digital news.
But it still all comes down to the price tag.
The prices will come down. Best Buy, for example, started carrying HDTVs in about half of its stores in mid-November and plans to introduce more models to all of its stores by spring. Prices will come down. The question is when?
Its not going to be a mass-marketable product until you see the prices come way down, and thats going to be a little while, says Dorsey, still standing in the glow of the pricey Mitsubishi. I dont know if thats going to happen any time real soon.
Channel 3s Eoff, on the other hand, is optimistic.
It took IBM a long time to get that great big computer down to the laptop to carry home with you, he says, but its not going to take that long for that TV to come down to something thats affordable.
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