Wednesday, November 28, 2007

15 Months and Counting: What's Changed?

Once again, the 17th has come and gone, and it's now less than 15 months until the current "hard" date (2/17/09) on which analog broadcasting is supposed to cease. This is the 20th of 35 planned monthly recaps of developments affecting the various players (laid out in my first few posts) in this story, meaning that we have gone more than half the distance that remained when we started this blog in March of 2006. 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). That said, here's some of what happened (or was commented on) between 10/18 and 11/17. As is usual, major news sources for this update include Multichannel News, Engadget HD, TV Week, TWICE and

THE PUBLIC - Consider your daily activities for a moment (not counting whatever you have to do to get the bills paid). Are there any that are done primarily out of habit, that you might drop if they became more costly or difficult? According to a recent survey by the Consumer Electronics Association, a lot of analog TV owners might be feeling that way about their TV viewing. The survey asked analog owners (those who only watch over-the-air broadcasts) what they would do to prepare for the transition, and 22% said "nothing". Now it's possible that a portion of that 22% simply don't believe that the nation will really go through with this, but that still leaves a lot of people who are currently planning to become ex-TV-watchers in the near future. Good news for the movie and publishing industries?

Since I began this blog, I have noted many public-education campaigns announced by a variety of organizations. Finally, we're seeing some of the results. I started to notice spots affiliated with the National Association of Broadcasters' DTV Answers campaign around the time of the World Series. It'll be interesting to see if this affects the next round of public-awareness survey numbers. More recently, all the broadcasters in the Washington D.C. area launched a co-ordinated campaign featuring locally-produced spots and simultaneous airing across stations.

Hopefully they'll produce better results than we're seeing in the related area of HD awareness, where a recent Leichtman Research Group survey reveals continuing confusion on the subject. Especially noteworthy is the finding that 20% of HDTV owners still think they are watching HD, but aren't. Still, there's been movement since this blog began. Back in June 2006, I noted the results of a previous Leichtman survey. Back then, 43% of HD owners were watching HD programming, compared to 53% now. And it's important to note that these percentages are part of a growing pool of HDTV owners, with the overall result (according to Neilsen) that 11.3% of US homes now receive HD programming. Of course, some areas have taken to it more quickly than others - the same survey puts NYC on top with 17.5%, while Boston ranks fourth at 16.2%.

One aspect of the message that hasn't been getting out well at all (in fact, it's news to me) is that there are actually exceptions to the transition rules - thousands of low-power, Class A and "translator" (meaning they rebroadcast signals from full-power stations) stations, which largely serve rural areas and specific urban communities, and which aren't required to abandon analog on The Day. That's not to say they don't have problems of their own, such as the fact that much of their audience will soon be getting its programming from converter boxes that won't be able to see their analog signal.

GOVERNMENT - In last month's "Public" section, I made note of the NAB's plans to run their PSAs during prime time. However, formalizing this through proposed FCC mandates doesn't seem to be going down too well, with both the NAB and Fox Television Stations complaining. Also not happy is the CEO of Insight Communications, who argues for a small operator exemption from the new FCC must-carry rules (if a provider doesn't go all-digital by 2/17/09, they have to continue to offer analog versions of their local must-carry stations for at least three years). The cable companies have issues with FCC Chairman Kevin Martin that go beyond the transition itself, as he seems determined to use provisions of a 1984 law as a pretext to dramatically expand the FCC's ability to regulate cable's overall operations, even though he may be using bad data in the process.

Another FCC mandate still facing resistance is the one requiring cable companies make their equipment CableCARD friendly (thus enabling consumer-electronics companies to market devices using provider-supplied CableCARDs) - Comcast is suing for a waiver. But adoption is now widespread enough to focus on which technology will set the standard for interactive access in the future - the CEA's favored "digital cable ready plus" solution, or OpenCable, which providers are advocating.

Meanwhile, John Knauer, the governments main transition point-man, is leaving.

Finally, on the state government front, an Ohio bill that would have compelled arbitration in carriage disputes between cable companies and networks is dead for this year - this is seen as a setback for the NFL Network and Big Ten Network.

BROADCASTING - The lead item this time reads like a repeat of last month - a few more new local HD newscast launches, with one big national news story- an HD launch of The NewsHour with Jim Lehrer is not far off, although perhaps not the Jan 1st date that has been reported elsewhere. Antiques Roadshow is slated for later in January.

One area of broadcasting that has been slow to accept HD is syndication - for quite awhile now, Wheel Of Fortune and Jeopardy have been pretty much it. Now, however, another of the big names in syndication is about to fall in line, as Entertainment Tonight will be going HD sometime "next season".

OK, I know this next one isn't actually "broadcasting" at it's usually defined in this section, but HD transmissions from the moon are just too cool to ignore, even if they don't fit into the framework here.

PROGRAM PROVIDERS - After the floodtide of DirecTV channel additions last time, things were fairly quiet (other than the addition of NHL Network HD and NBA TV HD, two moves that were quickly matched by Dish) until Nov 15th, when they added 23 more channels. However, when you deduct PPV channels and RSNs (Regional Sports Networks), you come up with all of five new national HD networks (Nickelodeon, Spike, CMT, MTV and VH1). The latter three of those have been supplying their meager HD libraries to MHD, so don't expect to see too much great new stuff right away. But with the way that DirecTV counts channels, they can now say that they have fulfilled their "100 channels" promise.

As before, this left cable companies (and FiOS) scrambling to fit a few of the newbies into their stretched lineups, and here's a few examples of what I'm talking about. Here in Boston, Comcast recently added USA, CNN, History and Discovery, with NHL Network HD only featured in Boston proper and Brookline (good thing I'm not very interested in hockey). And yet, Comcast still proclaims itself to be the HD leader (based on such factors as subscriber count and VOD lineup).

You might have noticed I'm including FiOS among the bandwidth-challenged, judging from the glacial pace of their adoptions. That's nothing I would have expected, given all the hype we've seen about the advantages of fiber optics. So what is the situation, anyway? Ben Drawbaugh from Engadget HD did some digging and analysis, and has some interesting speculations about the possible causes of this situation. But whatever the cause is or isn't, it seems to be fixable, since Verizon is promising 150 HD channels by the end of 2008.

As stressful as this struggle to expand capacity is for program providers, it is most definitely good news for program producers, as noted by Josh Sapan of Rainbow Media Holdings.

There was some action on the legal front this time around, with yet another suit over the accuracy of HD ad claims (this time DirecTV is suing Cox), plus a suit by HDNet designed to keep DirecTV from bumping the channel to a new $5 "HD Extra Pack" tier.

In other provider-related news, Comcast now has a TiVo service webpage where you can get info and check availability (I'll let you know when they get around to offering it in my town) The AT&T franchising setback I mentioned last time was replaced by victories in Connecticut and Ohio. AT&T was also the subject of increased Dish merger rumors, as well as suffering a nationwide outage that might be related to infrastructure strains related to recent subscriber growth. Projected spending on that infrastucture has recently increased by $500 million even as the estimate of potential subscribers (people to whom the service would be available) fell by a million. Two providers announced HD subscriber milestones - Verizon has more than 700,000 and Cablevision is up to 900,000. Finally, a less-traditional provider (the VUDU service) just became more relevant to many of us by signing HD content agreements.

HD NETWORKS - As mentioned above, many providers have been adding a few channels out of the recent explosion. So far, USA, CNN and History seem to be doing especially well, with Discovery just starting to make real inroads. There are some other items concerning recently launched channels - Broadcast Engineering has an interview with Greg Ahlquist of Fox Business Channel, HDTV Magazine has a column from Ed Milburn on CNBC's unique way of presenting HD, and Comcast had some comments for the FCC regarding the NFL Network's attempts to force arbitration regarding which tier it should go on (it's currently on the Sports & Entertainment tier).

Of HD networks that have been around for awhile, all the items I have this time out are for MOJO, which has been pretty busy lately - getting off-network rights to Heroes, creating a new block of finance shows on Thursday night, and getting its programming into new distribution channels via Internet TV provider Joost and the Amazon Unbox digital-video-download service.

So now it's time to look ahead at channels of the future. Actually, by the time post gets up, Biography HD's launch (on DirecTV) will be in the present (it's scheduled to debut on Nov 28th). Very soon after (Dec 1st)will see the debut of RFD-HD, a network focused on rural concerns which is trying to expand its reach by carrying a video version of Don Imus' new show.Two more are coming in the first quarter of 2008 - QVC and Ion TV - carriers yet to be announced.

MANUFACTURERS - In the NextGen DVD format war, it was a pretty decent month for HD-DVD, which should come as a relief, since it could have been disastrous. As big a step up as the Paramount HD DVD-exclusive deal was, Warner's format neutrality is a bigger asset, so when Dan Silverberg (VP of high-definition media for Warner Home Video) recently mentioned that Warner was "re-evaluating" whether they would continue to support both formats (in the same speech in which he proclaimed Warner's commitment to Blu-ray), it caused quite a bit of nervousness among HD DVD fans, at least until Warner denied that any changes were on the horizon. Still, you have to wonder whether this was simply a matter of the company trying to cover for a lapse in discretion. One possibly relevant data point - Total HD, their planned format-neutral disc for those wishing to future-proof their disc purchases, has been dropped before it ever had a chance to get off the ground.

But Mr. Silverman's comments were soon overshadowed by those of Sony CEO Howard Stringer, who referred to the format war as a "stalemate" (due to the Paramount switch). Sony is the leading backer of the format, so this kind of comment carries enormous weight - even after it was "clarified" in the last few days (it was, after all, left out there unmodified for a couple of weeks). It certainly makes the comments of Bob Chapek, president of Disney Studios Home Entertainment (where he in essence tells HD DVD supporters to just give up and accept the inevitable) seem not only premature but a bit petulant as well.

But the most noticeable event (from the point of view of the public, in any case) was the price collapse (at least temporarily)of HD DVD players, to the degree where they now threaten to become mass market items (compared to Blu-ray players, which have only in the last few days gone below $399). As recently as Oct 26, it was news when the Toshiba HD-A2 dipped below $200. By Nov 1st, they were being blown out at $99. Then the newer HD-A3 hit $199, and on Black Friday was selling for a low as $169 at Sears. As a result, sales went through the roof (and have been on a tear ever since). (Full disclosure - when the A3 went to $199 at Circuit City before Black Friday, I could resist no longer.)

But let's not forget that Blu-ray still has some powerful competitive advantages going for it. They are still well ahead in disc sales (except for the recent week when HD-DVD exclusive Transformers set sales records), and it's a good idea to remember that recent price cuts have multiplied PS3 sales as well (and that even a modest estimate of the percentage of these that are used as Blu-ray players continues to give Blu-ray a solid lead in installed player base). They've also just updated their hardware spec with new features. So it's doubtful that Blu-ray is in any kind of trouble, but with business looking up for HD DVD, there's no reason for its supporters not to keep the game going. We are still in the very early chapters of this story. While in the long run the recent Jupiter Research study (which suggests that the final winner may be the standard DVD) may be proven wrong, for now the "good enough" old favorite is still the real leader - even in most high-def homes.

So this is the part where I remind myself that NextGen DVD players aren't the only hardware we look at here, though it certainly seems that way sometime (what can I say - conflict makes for a compelling story). New things arriving and old things passing from the scene also make good stories, so you might be interested to know that the OLED display technology that has been talked about here may actually get here this year - if only it was bigger than 11 inches (can't have everything). Heading in the other direction is the old stalwart RPTV (currently taking up a lot of space in the living room where I live) -despite it's superior "bang for buck", nobody wants a big box in their house anymore, so Hitachi has stopped production.

And that's all I have for now!



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