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Although the advertising industry will receive a boost from the Olympics, 2008 is not looking to be a good year. In fact, many predict 2009 will be much
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Although the advertising industry will receive a boost from the Olympics, 2008 is not looking to be a good year. In fact, many predict 2009 will be much worse. For countries wanting to join the HD club, this is not a good time to launch HD services. Although the cost of HD post-production equipment is little more than SD was a few years back, the primary costs lie in the setup and launch of the delivery service, which is especially true for terrestrial networks.

For those regions that started up DTV services early on with MPEG-2, a shift to MPEG-4 AVC is going to be a challenge.

For most broadcasters, the move to HD has been because they have to, not because they want to. Will HD spots sell for a premium? Probably not. Will costs go up? Probably yes. For viewers, it is a period of confusion. They may have bought a 1080p display, labeled HD-ready, but what will they watch? The answer is scaled-up SD. A good deal of HD content is upconverted in master control, which is not the best source of HD programming.

For the subscription channels, the business case is clearer. There is a direct relationship between subscriptions and revenue. For advertising-sponsored channels, it all gets fuzzier.

During the early adoption of HD, we saw how government legislation drove the move, but that the services didn't become popular until affordable receivers came on the market — and that was only in the last 18 months. Now there is HD takeup in areas like news spreading across the country.

In Europe, governments have encouraged the switch to digital, but they are not pushing broadcasters to adopt HD. That has been left to the market, and only the innovators like News International's Sky run a real HD service with a choice of channels.

France is to pioneer terrestrial HD in Europe, but has the advantage that it can use MPEG-4. A current MPEG-4 HD set-top box is now affordable for widespread adoption. However, the broadcasters that went for MPEG-2 now have to convince the public to throw away their relatively new digital STBs and integrated receivers for new ones that will receive MPEG-4 HD. This will prove difficult to explain. Switching from analog to digital is one thing, but moving from MPEG-2 to AVC — try explaining that to the average couch potato. As Oliver Hardy once said, “Well, here's another nice mess you've gotten me into.”

Big events can drive receiver sales, but the 2008 Olympics is upon us. The next event is four years away, so what signature event is going to herald mass HD adoption in Europe and Asia? It could be a slow migration, where lack of receivers holds back advertisers, which in turn holds back the launch of new channels. In this scenario, government sponsorship can be a big help. The French, for example, have always had a positive attitude toward the promotion of new technology. Other governments are more interested in auctioning spectrum to any sector with cash.

Is HD important? If you think that it brings an enhanced viewer experience, then yes, it is important. If you don't think so, then we could be still watching black-and-white programming. In the meantime, it looks like the subscription channels are going to show viewers what high-quality pictures can look like in the home.

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