Chain reaction: The revival of the HDTV transition

For anyone involved in high-definition television, the past six years have been some-what of a rocky ride. Terrestrial broadcasters have spent a considerable
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For anyone involved in high-definition television, the past six years have been some-what of a rocky ride. Terrestrial broadcasters have spent a considerable amount of money on HDTV capability, but they have seen little return on their investment. Broadcast equipment manufacturers keen to participate in the transition have invested heavily in the development of HDTV products, but they have seen limited uptake of their products. The truth remains that the HDTV build-out achieved thus far by most local stations has involved somewhat limited compliance packages consisting of upconversion, basic logo insertion and HD encoding.

It got to the point where people in the industry were embarrassed to talk about HDTV because the HDTV ramp-up was going so poorly. But just when we were about to give up hope, HDTV reached critical mass, setting off an unstoppable chain reaction. It is now obvious that HDTV has finally taken off and will take its rightful place in broadcasting history.

This article describes this chain reaction and the many forces driving the strong HDTV transition now underway. Figure 1 provides an illustration of the chain of events that has begun and is likely to continue. The following paragraphs describe these events:

Major sports channels go HD

The chain reaction reached critical mass in late 2002 and early 2003, when we began to see plans in the sports broadcasting world for the playout of multiple channels in HDTV, and the build-outs of new digital broadcast centers featuring full HD infrastructure, production studios and master control.

Build-out of production trucks and studios

One of the first impacts of sports broadcasting getting serious about HDTV was a sudden and large build-out of HDTV production trucks and other production facilities. Sports programming has been a particularly powerful driver for the creation of new production facilities because so much content is live. No other content would have caused such a rapid build-out across such a wide geography.

More affordable HD equipment

For broadcasters who follow the sports channels, and for other early adopters, the result has been a broader range of more affordable broadcast equipment. The increased volume and competition has resulted in a reduction of the pricing of typical HD products of 25 percent to 40 percent, depending on the function. Figure 2 illustrates the reduction in price of HDTV upconverters over a six-year period. It is interesting to note that the price of an HDTV upconverter today is less than the price of an NTSC-to-601 converter 10 years ago, the basic block of the transition to 601 inside facilities.

Real HD facilities, not just compliance

The build-out of the production trucks and production studios required to feed this new HDTV sports programming has been significantly more important than the impact of early DTV deployments. Production trucks and studios involve more complex systems, featuring a much broader range of equipment. The average production studio or truck represents $3 million to $4 million of audio and video equipment, as compared to $500,000 to $700,000 for a typical HDTV-compliant master control (excluding transmission equipment).

Men buy HDTV sets to see sports

For years, retailers of big-screen TVs have always sold the highest number of units just before a big sporting event. It's a well-known fact that sports fans buy big TVs. The rollout of HD sports programming naturally has led to typical sports fans buying large HD televisions, just like those they enjoy watching in the sports bars.

Other specialty channels follow suit

Although there were other specialty channels that had begun broadcasting HDTV before the sports channels, many more first- and second-tier channels have since announced their intentions or are discreetly working on their HDTV plans.

Price of flat-screens falls below $1500

Display technology, particularly flat-screen display technology, has been evolving at an astonishing pace. It has been driven not only by TV display applications, but also by applications such as computer display and electronic signage. Newer, larger and higher-resolution displays appear every few months. Prices are decreasing at an average rate of 4 percent to 5 percent per month. By the time this article goes to print, large LCD and plasma displays will have fallen below the $1500 price point.

Not only are these displays capable of displaying HDTV images of increasing quality, but also they are also attractive and trendy. They are quickly becoming sought-after décor items in homes. It has come to the point where a conventional 4:3 TV set now looks odd and out of place. Soon, on the day of the next community yard sale, the 4:3 set will be out in the driveway, along with those white appliances that were removed from the kitchen to make room for the shiny new stainless-steel ones. A new flat-screen TV has achieved the rare distinction of being a purchase that the sports fan and the home-decorating guru can both fully agree upon.

Cable/DTH motivated to carry HDTV

Many have argued that the element missing from broadcasters' early HDTV-over-DTV rollout was cable carriage. Cable and satellite subscription rates in the United States have risen from approximately 65 percent 10 years ago to better than 85 percent today. More importantly, the demographics of cable/DTH versus free over-the-air television are such that the typical early adopter of HDTV is more likely to be a cable/DTH subscriber. (See Figure 3.)

The availability of specialty channel programming in HDTV, such as sports and other channels, is now driving cable carriage. Indeed, HDTV has become part of the core proposition from many satellite and cable providers and is often used to promote services with competitive deals. For instance, in early 2004, one provider was offering a package featuring a dish, an HDTV receiver and an HDTV flat-panel display, all delivered to your home for $1000.

Introduction of HD DVDs

The DVD player is widely recognized as having the most rapid adoption rate of any home electronics product. Some maintain that the DVD has redefined the way consumers think of picture quality, and the DVD is often credited with driving the purchase of larger displays, new sound systems and the demand for subscription to digital services.

Soon, HD DVDs will become available, and they will likely stimulate consumer demand for HDTV content. Home viewers who have experienced HDTV DVDs will no longer find SDTV adequate, particularly if they have purchased high-resolution displays also.

Network TV gets serious about HDTV, and local broadcasters increase HDTV content

Once HDTV cable carriage is well established and specialty channel HDTV programming has broadened, then there will be increased pressure for traditional networks and their local affiliates to provide more HDTV programming. This will complete the cycle and allow broadcasters to leverage and expand the HDTV infrastructure they first installed as part of their DTV initiatives.

Consumers are key

The key to the chain reaction now underway is that it is driven by consumers — more specifically, their appetite for HDTV content and their desire to purchase the equipment necessary to view it. This represents the positive market environment so desperately needed by our industry.

Some will argue that it is unfair to credit sports broadcasters with starting the chain reaction that has brought the industry this new health and excitement around HDTV. Perhaps they didn't start it. But, even if they didn't, they deserve a great deal of credit for the important role they have played in breaking the content logjam, helping push cable and satellite system providers to carry HDTV, and for breathing new life into broadcast equipment manufacturers' HDTV R&D programs.

Michel Proulx is vice president of product development at Miranda Technologies.