Thursday, May 01, 2008

10 Months and Counting: What's Changed?

Once again, the 17th has come and gone, and it's now less than 10 months until the current "hard" date (2/17/09) on which analog broadcasting is currently scheduled to cease. This is the 25th 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 just over two-thirds of the distance that remained when I 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 3/18 and 4/17.).As is usual, major news sources for this update include Multichannel News, Engadget HD, TV Week, TWICE and TVPredictions.com.

THE PUBLIC - Last time, I was disparaging current public education campaigns, pointing out that I hadn't even seen repeats of those DTV Answers spots lately. Well, at least that much has changed. As I mentioned last time, April 1st was the scheduled date for a notable increase in the number of transition-related ads, as well as the introduction of screen crawls. And despite the flexibility the FCC has given local broadcasters in scheduling these in less-valuable (and less-watched) timeslots, I have definitely seen a lot more ads (and a few screen crawls) in the last few weeks. In fact, even HD broadcast channels (whose viewers are likely to be set for the changeover) have had screen crawls. Personally, I find the scrawls very hard to ignore (I suspect those of us who already know this info are going to get very tired of them, even more so starting in October, when the frequency is scheduled to increase). However, opinions are divided over the effectiveness of current spots (and the need to do more), as shown by comments made at the recent Washington Forum sponsored by the Consumer Electronic Association (CEA), as well as at the National Association of Broadcasters' annual NAB Show. I'd say it's better to air on the side of caution - I'd rather be a bit annoyed than have additional millions caught by surprise. So it's good (despite what seemed like rather complacent comments last time from CEA head Gary Shapiro) that the organization is making other efforts to spread the word, such as the information session they hosted along with the National Telecommunications and Information Administration (NTIA) and RadioShack, or their senior-targeted "Convert Your Mom" campaign. For a look at some others trying to spread awareness, check out the webcasts accessible from this list of FCC DTV Consumer Education Workshops (thanks to Cymon for the tip).

As far as current public awareness goes, a new Magid Associates study shows that roughly 6 in 10 Americans are aware of the transition, up from 34 percent last September. However, as pointed out a couple of months ago, quality of information is at least as important as quantity, so I'd be curious to see a bit more detail concerning what those 6 in 10 actually know. And knowledge does not automatically give one the ability to take action. Last month's update contained a notable comment concerning the impact of these changes on elderly people with limited resources. Then there are over-the-air viewers who live in "challenging" reception areas, people who might be used to so-so analog reception but who will fall on the "nothing" side of DTV's all-or-nothing reception equation. How many people might we be looking at there? This study says up to 9.2 million (and I couldn't help noticing that Boston is considered to be one of the more vulnerable areas).

GOVERNMENT - Right now, the main transition-related government initiative is the converter-box program administered by the NTIA. The new head of the NTIA says the converter-box program is working just fine (they appear to have mailed out about 6 million of the 33.5 million coupons the current program calls for). But this is another area where it's important that people be given correct info, as is demonstrated by this Engadget HD shopping trip (the short version; the local Best Buy and RadioShack came out ahead when it came to checking to see if the customer actually needed the box in the first place). It also helps if the boxes actually work well, (unlike this GE model) so check out the comments section of this Engadget HD post for some user reviews of boxes.

The other big story is the auction of the old analog-TV spectrum, results of which (after 261 rounds!) were finally released. This article from Multichannel News runs down the winners. Google was one of the bidders, but confirmed what many suspected - they were only bidding on a particular slice of spectrum (known as the C block) in order to push the bidding beyond the $4.6 billion mark necessary to activate open access rules for that spectrum (you see, Google has its own mobile platform in the works...). Someplace else Google would like to see utilized for mobile use after the transition is the "white space" between TV stations, but broadcasters are not thrilled with this idea.

Government was also busy in the area of carriage requirements. The FCC cut satellite providers and small cable operators a significant amount of slack, with satcasters being allowed to roll out their carriage of HD locals over a four-year period after the transition, and FCC Chairman Kevin Martin is now proposing that small cable operators be exempted from the requirement to carry both digital and analog versions of must-carry stations (they can just downconvert to analog and carry only that). As for the latter, it may help smaller systems manage their bandwidth, but not having HD after February of next year will surely make a provider look "small time" in more ways than one, especially when satcasters offer service everywhere, as this article points out.

Waivers were granted to small operators in another area as well, as two companies were allowed to bypass the CableCARD mandate and deploy old-style set-top boxes with integrated security features instead. They may not be the last! (At the same time, CableCARD-enabled set-tops passed the four-million-deployed mark.) The FCC was a bit less forgiving as regards another mandate, the one requiring consumer warning labels on any analog TVs that still remain on the shelves, slapping millions of dollars in fines on retailers such as Sears, K-Mart, Wal-Mart and Circuit City. Surprisingly, Best Buy also got hit - when I was researching my series on the tuner mandate last year, my local Best Buy was the first store I saw with no analog TVs at all. BTW, those tuner mandates just got tougher, with labeling now required on tuner-less monitors and other devices such as DVD recorders.

There was also news in other, less transition-related areas. Mostly these concerned the FCC's struggles with Congress and cable companies, over issues like media concentration (the FCC is trying to loosen the ownership rules), a la carte (Chairman Martin wants it, over the objections of broadcasters, providers and a number of lawmakers), net neutrality (one area where I do agree with the FCC) and signal carriage (the NFL Network is complaining over their treatment by Comcast).

With all of this, it's important to remember that it's not just analog TV that's going away next year, so is this administration (and presumably its political appointees). So cable, at least, is looking forward to better times ahead, and is determined to ride out the remainder of Chairman Martin's term.

BROADCASTING - The conversion of local news operations to HD continued at a crawl - I actually only have one example to offer this time out (however, it's looking like things will be considerably different next time). So instead of more examples, I thought you might enjoy this interview with Sterling Davis of Cox Television, whose company has already converted seven of their local stations. On the national level, ABC's This Week became the first Sunday morning news show (Fox's Sunday morning show is in widescreen SD) to announce its intention to go HD - their first HD broadcast was a couple of days after our close.

Outside of news, a fair number of shows announced forthcoming HD conversions. One of the biggest SD holdouts is the reality genre, so it's notable that Survivor (the most popular show in that genre) is now onboard for a fall HD debut (shooting this summer). Other shows on the way include Sesame Street, Cops (currently in Fox Widescreen) and Oprah.

I wrote last month about the dismal experience of watching my local PBS station drop the PBS HD Channel for a simulcast with very little HD (although that did mean I finally got to see The NewsHour with Jim Lehrer in HD). Thankfully, I can now report that with the end of the latest pledge period a few days a week now have a decent amount of HD in primetime. Also upping their amount of HD programming - regional sports networks (AKA RSNs) and the forthcoming Summer Olympics.

With The Day drawing so close, local stations and the broadcast groups representing them had a lot to do at the recent NAB Show - here's a look at how six major groups are preparing.

One of the downsides of all this to viewers sticking with analog TVs after the transition is that they will be seeing a lot of downconverted digital programming, which may mean a lot more letterboxed shows than some people want to see. This may explain why ABC's 10 owned-and-operated stations will continue to offer an analog feed to cable companies, for at least a year after 2/17/09.

PROGRAM PROVIDERS - The big story in this section (everyone else's attempts to stay competitive with DirecTV's HD offerings) continues to be the big story (and will probably be so for some time to come). As we saw last time, channels are now being added in great big chunks. Most of these are designed to bring lagging areas up to the standard previously seen in high-bandwidth regions, but there are also a few channels that are new to cable (such as Disney, Toon Disney and ABC Family), or U-Verse's introduction of HBO2 HD, HBO Comedy HD and HBO Family HD.

Of course, you can only go so far in this direction without doing something to add capacity.Dish's attempts to add capacity via a new satellite have run into some problems, as that satellite (AMC-14) was declared a total loss. Despite this, Dish is saying that their HD rollout plans are on track, and in fact they have been adding a few national channels as well as expanding their coverage of local broadcast channels. The only way I can make sense of this is to assume that the HD plans they're referring to involve what they can do with the remaining capacity on their existing satellites, and that they will have to wait for the next two satellites to take a real run at DirecTV. The problem there is that DirecTV's recent satellite launch was a success, and they now have plans to expand capacity to 150 national channels by September. So good luck to everyone else!

Cable doesn't have the option of adding capacity via something like a satellite, and providers have been trying various methods to compensate. The links I gave above for channel adds don't say, but I suspect that technologies like Switched Digital Video (SDV) are coming into play with at least some of them. One other way Comcast has been doing it is to squeeze three channels (rather than the usual two) into a 6Mz channel, and this study shows that the resulting bitrates are noticeably lower than those of Verizon. People must be noticing, or Verizon would not be exploiting the situation with these recent commercials. Given the recent survey that finds operators citing video quality as one of the top causes of viewer complaints, this doesn't seem to be a very wise course of action on Comcast's part. I mentioned SDV above, and that method carries its own problems. For instance, Cablevision customers using a CableCARD connection can no longer see the Voom channels, which are going SDV. Even worse, many CableCARD-enabled TVs (unless they use TiVo with the upcoming "tuning resolver") may never support SDV.

Another way to get more HD bandwidth is to reclaim space from analog, which Verizon is doing. I have to confess that I didn't realize Verizon had any analog to get rid of in the first place, but apparently it's designed for additional TVs in the household - or was. And then there's IPTV (the IP standing for Internet Protocol), whose worldwide subscriber base is expected to increase 52% a year through 2012. One thing that will speed that along is this prepackaged content/equipment solution for providers, from the partnership of Avail Media and Motorola.

Last time I mentioned Cox's goal of 80 channels by year's end, and here's a bit more on that. Another expansive forecast is Time Warner's 100 channels prediction for New York and New Jersey by year's end (they have 50 now, pretty good for cable). However providers get the job done, they'll need all that capacity and more if we start to see 1080P channels in a few years time.

There continued to be legal matters between the various providers. Dish Network's appeal for a rehearing of TiVo's patent-infringement lawsuit was denied by the Federal Circuit Court of Appeals, but they seem to be prepared to take this one to the Supreme Court. Also denied was Verizon, who were seeking a temporary restraining order to block two Time Warner Cable TV ads that they feel contain false statements about FiOS service.

There was more news on the franchising front, with lawmakers in Louisiana and Tennessee considering state franchising (the Tennessee bill seems to have been put together with AT&T's U-Verse in mind). Meanwhile, Verizon is asking for a city-wide franchise in New York City.

In the area of non-traditional providers, there's some interesting news concerning Blockbuster's plans to compete against Apple TV with its own set-top box. And Eric Feng from Hulu.com comments on the future of HD on the Web here.

HD NETWORKS - It's still fairly quiet on this front, but do have a bit more than last time. As mentioned last-time, ESPNews HD launched, and is currently available on DirecTV (supposedly Dish, Comcast and Time Warner are next). Two other networks launched as well, both aimed directly at the mainstream audience. Hallmark Movie Channel HD's held its launch party in Peoria, Ill. The other launch was Lifetime Television HD, carried by U-Verse and FiOS (Lifetime Movie Network has been in HD for awhile now). There was also a channel announcement, although this one was more of a rebranding, as Discovery Home becomes Planet Green (with an HD simulcast added).

But it not just the number of channels out there that I'm interested in, it's also the amount of actual HD, and in that area, we have taken a step back, as the previously-mentioned simulcasts of Food Network and HGTV have - as feared - resulted in a marked decline in true HD content relative to their all-HD predecessors. And this leads me to wonder about the future of HD
"showcase" channels as the expanding HD viewership becomes more mainstream (and more inclined towards HD versions of the TV brands they already know) every month.

But at least someone still believes in the showcase concept - Clint Stinchcomb of HD Theater, who is profiled here. And the VOOM networks haven't given up, with the Equator HD channel adding new series. And the simulcast problem will eventually grow less severe (as early viewers of ESPN HD can attest) - even widely-derided TBS has begun to add a bit of real HD.

MANUFACTURERS - Mopping-up operations from the recent HDM (high-def media) format war continued, as Toshiba forecast a $665.5 million loss for HD DVD operations in fiscal year 2007. Various retailers tried to make it up to those who bought HD DVD players from them, as Best Buy offered $50 gift cards and Amazon offered $50 in credit, while Wal-Mart went them one better by offering full refunds on players bought after Nov 1st. Other signs of the times including HD DVD discs vanishing from Best Buy, and the departure of Ken Graffeo (former HD DVD Promotional Group head) from his HD marketing position at Universal, though he will still be at the studio (which has now announced its Blu-ray release plans - thanks to Engadget HD for pointing us to this) in some position or other. Still, there is one more piece of hardware to be introduced, a Plextor combo drive (for computers) as well as an update to the Xbox's HD DVD drive.

So how has the resolution of this conflict benefited the winner? So far, Blu-ray disc sales appear to be rising, Sony is pumping new money into disc production, Blockbuster is expanding Blu-ray availability from 1,700 to almost 5,000 stores and analysts forecast that the format will be in 29 million homes worldwide by the end of this year. But as this chart shows, the new struggle against standard DVDs is still in the extremely early stages, with Blu-ray having just four percent market share (it also shows that those vanishing HD DVD discs are still selling better than in any time in recent memory). The other struggle will eventually be with downloads, but that's for the future, according to studios (for one thing, only 5.7M homes have the necessary connections). But there's another possibility - flash memory cards. According to THX's chief scientist, this medium will have enough storage capacity to compete with Blu-ray by the time that format gets to the mass-market level (hmmm... let's ask the studios what they think of this one). In the meantime, look for players to get cheaper and gain new capabilities. Of course, Blu-ray isn't strictly an American phenomenon, so every so often we need to take a look at how things are going worldwide.

Moving on to other hardware news, LCD continued to gain as a display technology as Circuit City reported weak sales for projection and plasma, and Canon joined the list of those who have dropped the rear-projection line completely. We've been covering the first faltering steps of the OLED display technology, and this article points out it will be awhile before reasonably-sized (such as 32 inchers) sets are produced in quantity - think four years. Going in the other direction in terms of size, here's a piece on DTV for mobile devices (not portables, we're talking handheld devices here). Finally, a retired professor is suing a huge number of companies for patent infringement concerning LEDs and laser diodes. This could be interesting!

That's all for now!

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