Thursday, August 23, 2007

18 Months and Counting: What's Changed?

Once again, the 17th has come and gone, and it's now less than 18 months until the current "hard" date (2/17/09) on which analog broadcasting is supposed to cease. This is the 17th of 35 planned monthly recaps of developments affecting the various players (laid out in my first few posts) in this story. Despite the name of this blog I do cover some stories (like the growth of HD) that are not directly transition-related (but strike me as being of interest to transition-watchers). Due to my upcoming trip, this will be a bit more focused than usual. That said, here's some of what happened (or was commented on) between 7/18 and 8/17. As usual, major news sources for this update include Multichannel News, Engadget HD, TV Week, TWICE and TVPredictions.com.

THE PUBLIC - Again, nothing new this time on the public's attitude towards the overall transition, but the argument goes on over who is responsible for educating them. At the recent CTAM (Cable & Telecommunications Association for Marketing) Summit in Washington, two prominent legislators (Representatives Rick Boucher and Greg Walden) urged cable to pick up the pace of its educational efforts.

GOVERNMENT - This section's big story this comes this time from the Senate Commerce Committee, which held a hearing on July 26th, entitled "Preparing Consumers for the Digital Television Transition". The archived webcast on the linked page doesn't seem to be working (for me, anyway), but there are links to a number of transcripts from some prime players, both from the governmental side (NTIA, FCC) and from public-interest groups (AARP, National Hispanic Media Coalition and The Leadership Conference of Civil Rights). From the advocates' comments, you can see that concern is high and rising regarding the level of current awareness among their various constituencies. And comments from Sen. Claire McCaskill included this:
Frankly, this scares me, politically..I mean, there is no anger that comes close to the anger of an American who can’t get television.
For more on the overall event, here's Dale Cripp's overview.

Plenty of other people expressed similar concerns. Andrew Schwartzman of the nonprofit Media Access Project was especially skeptical of the ability for the current planned efforts to reach the poor, elderly and non-English speakers. Using a term he also used back in April '06, FCC Commissioner Jonathan Adelstein warned again of a "tsunami" of consumer complaints at The Independent Show (a conference for small cable operators). Perhaps because of all of this, the FCC is now asking for comments on proposed remedies such as requirements for broadcasters (mandatory PSAs) and cable companies (bill inserts).

Speaking of requirements, there were developments regarding several mandates. The National Telecommunications and Information Administration(NTIA) recently awarded IBM the $120 million contract to administer the converter-box program designed to allow analog TVs to still receive over-the-air broadcasts after 2/17/09. They'll be responsible for areas such as consumer education, voucher distribution and retailer reimbursement. (The program itself has a budget of $990 million, with an additional $510 million available if needed.)

You might be forgiven for thinking the story regarding another mandate (the July 1st ban on integration of security features into cable STBs) is over, considering that the July 1st deadline has passed. Not the case, as the FCC is still giving waivers for financial-hardship reasons. I can't see that being the reason if Verizon succeeds in getting the two-year extension of the one-year waiver they've already been granted. Not all waivers are being granted. though. One denial that is being appealed concerns the request from The National Cable & Telecommications Association. If it's the blanket waiver for the whole membership (meaning the biggest names) that it seems to be from reading that article, I can't find the denial surprising - granting that particular waiver would make the mandate fairly meaningless, no? For those who are complying, here's a look at the box-CableCARD combos that are now being served.

Another government-related story is the upcoming auction of the 700Mz analog-TV spectrum auction. There are two main areas of contention at the moment. One is over the rules affecting auction winners. the interesting twist here is that the open-access wireless regulations favored by FCC Chairman Martin (a Bush appointee) are being opposed by Republican House members who consider the rules an abandonment of free-market principles. There is also contention over proposals to open up the so-called "white spaces" in the DTV spectrum band for unlicensed wireless uses, proposals supported by technology companies in the White Spaces Coalition (like Microsoft, Intel, Google and others), but opposed by broadcasters and consumer electronics manufacturers such as LG Electronics, Samsung, Hitachi and Panasonic.

Finally, the FCC checked an item off the transition to-do list by issuing final digital channel assignments.

BROADCASTING - One small retransmission story this time. In a bid to counter arguments that retransmission fees impose onerous costs on cable customers. local broadcasters submitted a study to the FCC showing those fees amounted to less than a dollar per customer per month. Another recently-quiet area is stirring this month is new local HD newscasts, which have recently recorded a milestone by passing the 50 mark nationwide (still a relative handful). No progress to report on national network news, but from personal observation I can report that the one network currently offering an HD nightly newscast (NBC) is finally starting to move non-studio shots beyond the White House lawn, with some Discovery-worthy footage shown in a recent story on territorial disputes in the Arctic.

Some new (or expanded) broadcast HD to report. The CW network will broadcast all their comedies and dramas in HD this coming season, with WWE SmackDown following in January, in contrast to CBS, which will stick with SD for its reality programming. Sports coverage is picking up; the Phoenix Suns will soon be the first NBA team to broadcast all their games in HD. And ABC has launched its on-line HD player (I tried it and it looked OK, but my connection never got up to the 2mb per second needed to light up the "HD" logo).

PROGRAM PROVIDERS - As I suspect will be the case for the foreseeable future, the biggest story in this section continues to be the struggle of various providers to expand capacity, both to compete with each other and to keep up with all the new HD channels being launched in the near future. Right now, the provider to catch is DirecTV, which will be starting its 100-HD-channel push by ramping up to 70 by the end of September (with an additional 30 coming by the end of the year). The situation was recently addressed in a panel discussion at the CTAM ( Cable & Telecommunications Association for Marketing) conference in Washington. Two videos and a recap are available here.

One provider with an immediate answer to DirecTV's announcements was Echostar/Dish Network's Charlie Ergen, who downplayed DirecTV's move, using a quality-over-quantity argument ("There's not 100 channels of HD that I would watch"). Only days later, he gave a little demonstration of what he does think is worth watching, by adding six new HD channels, including four Discovery Networks simulcasts (HD versions of Discovery Channel, Animal Planet, The Science Channel and TLC) that we all assumed would go up first on DirecTV. Nice!

There were also developments in various legal issues among the providers. Providers just love doing two things these days - claiming that their HD picture quality is the best, and suing anyone who says otherwise. While Time Warner and DirecTV are settling their differences, DirecTVs issues with Comcast are ongoing. Comcast recently won an injunction against two recent commercials, and the same judge rejected DirecTVs earlier motion for a similar injunction against Comcast.

There was also some action on the franchising front. In response to the recent trend toward fast-track franchising six organizations representing local and county authorities filed suit against the FCC, challenging the agency's right to tell them how long they can spend approving new video-service providers. Also, a Connecticut judge reversed a June decision by Connecticut regulators exempting AT&T's U-verse service from cable franchising rules.

In other provider news, Comcast added over 800,000 digital customers (added to a loss of 95,000 basic subscribers, this ups Comcast's digital-subscriber percentage significantly - a crucial factor in determining how fast they can proceed with analog reclamation). Dish has a new HD DVR.Verizon FiOS is rolling out an Interactive Media Guide,that combines sophisticated DVR functionality with PC integration and widgets. They now have over 500K subs, more of whom switched from satellite than from cable. Also getting more subs is U-Verse, now up to 51K subs, which doesn't sound like much, but is way better than the 13,000 they had three months ago. Cablevision has good news, too; their HD subs are up 78 percent year-over-year.And Time Warner President Jeff Bewkes wants providers to make DVRs unnecessary by putting everything on VOD.

Smaller providers you don't hear so much are part of the picture, too. They recently came together for a conference called The Independent Show to discuss their own strategies in managing the transition.

HD NETWORKS - Another month of little new-HD-channel news - presumably the calm before the storm. There will be a new HD movie channel early next year, an HD simulcast of the Hallmark Movie Channel. Turning to channels we aren't seeing, some might be surprised to see so little news in that area from the adult-entertainment business, given its pioneering role in establishing the home video medium. This Multichannel News article looks at some of the reasons why. In existing-channels news, MOJO will have three new series this October. Finally, another bit of video from the CTAM conference, as Dan Rather talks about working at HDNet, as well as making a few comments that received somewhat more exposure in the mainstream media.

MANUFACTURERS - As happened a couple of months ago, events taking place after the 17th threaten to overshadow those of the previous month. Up until Paramount/Dreamworks announced they would join the HD-DVD exclusives club, it often seemed that Universal was the Atlas holding the HD DVD world aloft, with its extensive list of releases playing a major role in keeping the number of releases for each format roughly equal (even closer than last time, in fact). That's probably why we started seeing indications that Universal might be coming under pressure (despite their denials.) to add Blu-ray support. To the mainstream consumer, lack of Universal product was (up to that point) the only price they would have to pay for picking Blu-ray. Those concerned about missing out on anime from Bandai or the 1000 indie films project that I mentioned last time are a much smaller group, so any Universal switch would have to be seen as more of a game-ender than a mere game-changer. With these new reinforcements, that's a lot less likely to happen in the near future.

However, the continuing problems for HD DVD extend beyond studio support. Target recently decided to start putting NextGen players in its stores - but only Blu-ray models. Like Blockbuster, this decision affects stores, not the website, and HD DVD discs (along with the Xbox 360 add-on drive) will remain in the stores. Also dropping HD DVD from stores is BJ's Wholesale Club. But now the question arises - when customers want to know why they can't get Shrek 3 in HD, will Target, Blockbuster and BJ's change their tune? I expect to see more fallout from this development in the next recap.

In hardware news not related to NextGen DVD, TiVo has introduced the sub-$300 "lite" version of the Series 3 that I said they were working on last time, and (getting back to the transition), Samsung will be selling a $75 Digital converter soon ($35 after using one of those $40 government coupons).

And that's all for this monthly recap. I am off to Japan on Wednesday, August 29, and expect to start work on the next recap on September 13. There'll be a lot of news, and it will likely be a bit later than normal if you're a new reader, I should explain that this one is several days earlier than normal). See you then!

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