The future's on the telly

No good will come of television, said British journalistic grump CP Scott last century. The word is half Greek and half Latin, he complained.

No good will come of television, said British journalistic grump CP Scott last century. The word is half Greek and half Latin, he complained.

Leaving aside such linguistic pedantry, what would he make of its mulatto great grandchild, digital TV?

The coming reform of television — and this time it could well be a revolution, if one considers the component parts of digital TV such as widescreen sets, set-top boxes, digital video recorders, electronic programme guides and interactive services — will offer plenty of opportunities for the software developers, content providers and hardware makers of the world.

This is not to set aside the challenges inevitable in any new area of IT. We need only consider that people may need two separate set-top boxes (STBs) for the next year or so to get both TVNZ and Sky digital services to see that standards and platforms are far from universal. Or note the slow pickup of CDs to be reminded that people are reluctant to give up their electronic investments without a fight.

Much confusion exists in the minds of Joe Consumer, let alone more IT-savvy types. For instance, widescreen TVs — that is, the big, sexy, flat ones with a width-to-height ratio of 16:9 rather than the current 4:3 — are not digital TVs. Most TVs in people’s homes, of course, have some kind of digital processing, but “digital” here refers to the kind of signal, not the resolution. Sticklers in the industry say the only true digital TV sets are those with a built-in decoder (an “integrated” set), of which there are very few. For example, of the more than 25 million television sets sold last year in the US, less than 3% were digital, according to the New York Times.

Digital television is also regularly confused with the high definition television (HDTV) standard. The first wave of digital TVs, in fact, may be standard definition television (SDTV), the digital standard DVDs typically operate at. There are also analogue HDTV sets, just to add to the confusion, though this standard wastefully consumes more of the analogue spectrum. Regardless of what happens in the interim, most countries will switch off all analogue signals by about 2010.

Even if they are confused, consumers are buying into digital TV. Sky already claims well over 200,000 digital customers out of its 400,000-odd subscribers. Each has an STB. A small but rapidly growing number have widescreen sets. Why the move to stouter screens? Better picture and sound. Also, people see the world far more horizontally than vertically, say marketers. The idea has been around for ages — big-screen (cinema) movies are even wider in format than 4:3. All films will eventually be transmitted in widescreen, so with a 4:3 screen you will either miss the sides or suffer black bars at top and bottom.

Home appliance rental firm DTR estimates the average cost of a widescreen TV at $3500 to $5000, and naturally suggests renting rather than buying to get through the technological stop-gap, even though widescreen prices dropped by 40% within two years in the UK. Following the launch of digital TV in the UK rentals jumped by 300% and quickly accounted for 30% of the widescreen market. Sets will have to be changed more frequently than the 7- to 10-year lifecycle of today, it suggests.

Others in the industry agree prices will come down and say “entry-level” models will undoubtedly arrive, but claim demand is exceeding supply at present, encouraged by the use of DVDs and an increasing number of widescreen-formatted films on Sky.

So what will you get if you pay for a digital signal over a widescreen TV? A flat screen, faster refresh, CD-quality sound. There is no interference; viewers either get a picture or they don’t. Expect an increasing number of channels, perhaps one for each camera angle at a sports game. Perhaps one for each hole of a golf tournament. Perhaps four streams of advertising, suited to your likes — or observant of your dislikes. Expect interactive services such as shopping, betting, banking and email. Expect the long-awaited video on demand (trials are under way in Australia). In Britain viewers can get digital TV through satellite (Sky), terrestrial (OnDigital) and cable (Telewest Communications, Cable & Wireless and NTL). All three systems carry the BBC’s digital channels (there are seven, according to www.bbc.co.uk). In this country satellite is the preferred system for TVNZ and Sky, though Ihug offers IDTV, a service that transmits from high points in Auckland.

Digital TV is unsurprisingly causing widespread concern among the advertising communities. Pay TV causes audience fragmentation. Forrester Research notes in the UK that multichannel viewing is chipping away at ad-funded ITV’s mass audiences. Meanwhile, interactive services such as email and shopping are drawing viewers away from broadcasts, and personal video recorders (PVRs) allow consumers to skip ads. Nevertheless, Forrester believes TV’s business model will still be standing firm by 2005. The multichannel onslaught is slowing down as pay TV subscribers settle on a few staple channels and interactive TV use is still light. In the last six months, just 66% of BSkyB’s viewers entered interactive services on the platform. Only 160,000 out of those 3.3 million visitors actually bought anything.

Forrester also says personal TV will hardly touch ad revenues. UK viewers will only skip 12% of ads by 2005, because PVRs will only have reached 23% of homes by 2005, and PVR users will still view the majority of their TV live.

Among its recommendations for beating the threat of pay TV, Forrester recommends pre-empting the privacy outcry. “Regulators striving for traction in digital TV will inevitably kick up a fuss about the privacy implications of house-by-house TV measurement. Digital TV broadcasters must copy web marketing best practices and combine true opt-in marketing with crystal-clear privacy policies to avert the permanent stain worn by web marketers like DoubleClick.” This is not to mention the trouble TiVo, a PVR maker, got into with the US-based Privacy Foundation for gathering viewer habits while apparently promising not to do so.

Next week: Personal TV — what it will look like

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