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2005 IN REVIEW: DTV Growth Accelerates
12/7/2005

Transition on track; content leaps into new venues

WASHINGTON: Finally, after several years of consumer hesitancy on making the leap to HDTV, and the ensuing flat sales of flat-screens and other DTV products, 2005 is shaping up to be perhaps a seminal year for the digital transition.

The Consumer Electronics Association projects that 4.3 million "units" (SD, ED and HD-integrated displays) will be sold by the end of 2005, compared to 2.7 million in 2004. CEA says the average selling price of a plasma set fell about $800, to $2,700, since 2004. "2005 may soon be known as the year that 'DTV' started becoming known simply as 'TV' to American consumers," said CEA Pres-ident/CEO Gary Shapiro.

Household penetration of HD sets climbed to nearly 10 percent in the past 12 months as sales of LCD and plasma flat-screens showed impressive growth amid steadily falling prices. ED and SD flat screens also became more than a couple of one-of-these-days fantasies for consumers. Clearly, the mass media finally caught the HD bug, too (albeit a few years later than originally envisioned by the trade press).

"2005 allowed broadcasters to start leveraging more of the capabilities of the ATSC's suite of DTV standards," said Mark Richer, president of the Advanced Television Systems Committee. He cites this year's expansion of HD beyond prime time on the Big Four with shows like ABC's "Good Morning America," and CBS's "Late Show with David Letterman."

A handful of local stations, too, began to provide news in HD, including CBS affiliate WUSA-TV in Washington, D.C.--the only market in the U.S. that can count at least some members of Congress and FCC commissioners and staff as regular local viewers.

DISTRIBUTION METHODS SUDDENLY ABOUND

Broadcast content--pipelined exclusively to wired TV sets via local affiliates for its entire history--suddenly in 2005 was being re-purposed through various forms of VOD to the online portals of MSN, Google, Comcast, Cox, Verizon, Yahoo!, the reborn AOL, tiny wireless video displays like iPod, and cell phones.

TV upstart Verizon broke new ground in more ways than one with its fiber optic TV service, begun this fall in several suburbs/exurbs in Texas, the Washington, D.C. market, and suburban New York. While Verizon was the first telco out of the box with its FiOS TV to compete with cable and DBS, fellow telco SBC began ramping up its own IPTV-based infrastructure, with some rollouts ex-pected in 2006.

THE KATRINA EFFECT

Weather and its particularly destructive nature played an unusually significant role in telecommunications this year, as hurricanes Katrina, Rita and Wilma obliterated wide swathes of the Gulf Coast region. Amid the government's nationally televised, widely agreed-upon incompetent response to Katrina came the renewed call for a faster cutoff of spectrum for first-responder use. But Congress again overcame Sen. John McCain's (R-Nev.) attempts to reclaim spectrum by 2007.

"Whatever the communications problems after Hurricane Katrina, they had nothing to do with the analog-to-digital transition," said engineer, publisher and consultant Mark Schubin. "If a radio repeater isn't working, it doesn't matter what frequency it's on."

Schubin said Katrina was a vivid example of why every broadcaster should have an emergency plan. "Hurricane Katrina challenged the bases of those plans. Do you have enough fuel to run a generator for two days? How do you get refueled after that period? Does your fuel supplier have power for the pump that gets the fuel out of the ground?"

CONGRESS SETS A DATE

At press time, a Congress distracted by Katrina and a host of legal/political issues was working to reset the official analog cutoff to early 2009. Despite a transition that began in late 1998 and was, until this year, officially scheduled to end in 2006, Democratic members of Congress sounded urgent warnings about plunging low-income, analog-only households into the dark without a heavily funded subsidy for set-top conversion boxes, which likely will be at least $1 billion.

NEW LEADERSHIP IN DC

The FCC weathered a transition of its own in 2005 when Commissioner Kevin Martin, a former deputy general counsel for the Bush campaign, was tapped to succeed Michael Powell. The Martin appointment was generally welcomed by most industry players, including the NAB and CEA.

President Bush also re-nominated Commissioner Michael Copps, a Democrat, and nominated Tennessee utilities regulator Deborah Tate, a Republican. That political balance likely will restrict Chairman Martin's influence, much like it did his predecessor's.

This fall the commission began seeking feedback on how to ensure state and local authorities do not erect unnecessary barriers to new competitors seeking to provide video services; in other words, that telcos be afforded a level field to play ball with the bigger, firmly entrenched cable guys. The commission was allegedly lax this year in dealing with a surge of public complaints of indecency and violence content, according to a Washington Post survey.

After considering about 80 candidates, NAB tapped National Beer Wholesalers Association President David Rehr as its new president/CEO. Rehr, 46, was signed to an unspecified multi-year contract and officially took over his post on Dec. 5. He is widely considered to be a politically well-connected Republican lobbyist.

A YEAR TO FORGET FOR PBS/NPR

2005 proved to be one of the most tumultuous years for public broadcasters since National Public Radio and the Public Broadcasting Service were created 35 years ago. A series of controversies came from a most unlikely of sources: the typically low-key, apolitical Corporation for Public Broadcasting.

A handful of key presidential appointments of former GOP campaign operatives led to a takeover of CPB leadership following the abrupt departure of its president, Kathleen Cox, last April.

APTS spokeswoman Kristin Wilson said "in this [political] environment, the challenge for local stations to maintain federal support will be greater than ever, and it will certainly test our limits and capabilities."   Print Page