Smaller NCTA show focuses on extra revenue streams
Special to TV Technology
Now that cable television executives have discovered high definition TV, they'd have you think that they invented it. Or that they're the only ones who can make HDTV succeed in the U.S.
To demonstrate the newfound enthusiasm, the National Cable and Telecommunications Association created a huge HD Pavilion in the middle (albeit not front and center) of the show floor at its annual convention in Chicago June 9-11. With nearly two dozen "technology partners" and 16 program providers, the sprawling HD Pavilion-which included a bar/lounge plus "living room" and "home theater" areas-was a lively venue throughout the event. At the very least, it was a good use of floor space at a convention that was barely half the size of its previous presence in the same venue two years ago.
HD Pavilion participants, including TV set makers, video-on-demand technology providers such as SeaChange and nCube, plus ABC, CBS, NBC, PBS and a dozen cable networks, demonstrated technology as well as their HD program line-ups.
Putting their mouths where their money was, many cable honchos extolled HDTV (along with their other current digital passion, online broadband connectivity) during convention sessions. "Through a Lens Brightly: The Changing Picture of Cable Programming" focused almost entirely on the HD outlook, with bullish promises galore.
John Hendricks, chairman and CEO of Discovery Communications Inc., envisioned that the "10 to 20 million homes with projection or big-screen TV sets now will be the first to trade up to high definition." He expects 70 percent of the nation to be HD by 2010.
The ever-ebullient Mark Cuban, president and chairman of HDNet LLC, grinningly acknowledged that he "always says 'yes'" to anything cable operators ask of him in order to extend his networks' reach.
"We're not going to play stupid content protection games," Cuban vowed. "That's just shuttling deck chairs on the Titanic."
The panel, which also included Mathew Blank, chairman and CEO of Showtime Networks Inc. and George Bodenheimer, president of ESPN Inc. and ABC Sports, also agreed that video-on -- demand -- a lurking theme throughout the convention-will offer tremendous support to the HDTV initiatives. Yet the panel was concerned about tampering with cable's constantly improving ad-revenue motif.
"One approach would be to go á là carte for everything," said Hendricks, "but that would destroy the $8 billion ad revenues" that cable has attracted. Drawing on his own family's use of HDTV, Hendricks said HD shows become "appointment TV." He mentioned that his family tends to seek out and watch HD programs if they are on -- mentioning that the Hendricks household tunes into Jay Leno on NBC in high -- def, rather than the competing David Letterman on CBS, who is not telecast in HD.
Bodenheimer encouraged other program networks and cable operators to push ahead with HDTV, despite the higher production costs.
"Long term, if you're going to be in the cable business, you want to put the best product you can out there," Bodenheimer said.
PLUG-AND-PLAY STUMBLING BLOCKS
As important as long-term vision was at the NCTA show, much more concern was focused on short-term reality. Among the most breathtaking moments came at a seminar about the HDTV rollout. Bob Perry, Mitsubishi Electronics VP (and chairman of the CEA's video division) stunned the audience when he said that the FCC's delays in adopting the plug-and-play policy could kill plans for digital and HD retail product introductions through the end of 2004.
"We've heard ... that [the commission] may delay the decision to late summer," Perry said. Without the FCC's immediate OK, "there will be no products" in the manufacturing process for next year's holiday shoppers. Moreover, the FCC foot -- dragging on the plug -- and -- play digital plan -- hammered out in December by a cable -- CEA negotiating group -- will postpone phase two of those negotiations, which address bi-directional (interactive) plug-and-play products.
"The bi-directional discussions will bring a whole new level [of products]," added Greg Gudorf, VP of the Digital Platform Division of Sony Electronics. He described that process as one that will enable the consumer electronics industry to bring its best products to market. The cable industry also expects that its VOD and other interactive plans will be validated.
FCC officials attending the NCTA convention offered no timetable for adopting the plug-and-play agreement, which they had jawboned the industries into adopting.
BEYOND HD AND IP
The convention rhetoric about HDTV and new digital services was reinforced by armadas of new products. At the HD Pavilion, Zenith, Panasonic and Samsung showed cable -- ready digital HDTV sets and set -- top boxes. Zenith and its sister company LG Electronics Inc. presented the first public demonstration of a digital cable-ready HDTV set, using a POD (point-of-deployment) interface, based on the unidirectional plug-and-play standard. The LG -- brand 52 -- inch widescreen LCD rear-projection HDTV is built around an advanced LGE QAM tuner for digital cable HDTV reception and Zenith's VSB tuner for terrestrial HDTV reception.
LG also showed its Advanced OpenCable HDTV receiver, a digital cable set-top box intended for retail sales.
Pioneer Electronics pushed its Voyager 3510HD set-top box and also exploited its presence by spreading 50 of its HDTV sets (from plasma monitors to Pioneer Elite projection TV systems) among exhibitors on the show floor. Pioneer showcased its Voyager 4000 STB, which includes HD and digital video recording capability. The device has a dual tuner, allowing for both standard and HD signals to be encoded onto the hard disk drive simultaneously.
Pace Microtechnology shook up the show with its ultra-low -- cost Digital Cable Adapter -- a $70 device that could speed digital TV adoption, including HD. The DCA converts digital video signals for viewing on analog TV sets. Pace, which continues to make inroads into the set -- top box sector still dominated by the Motorola and Scientific -- Atlanta duoploy, contends that the DCA will speed the digital transition and enable operators to leverage their investments in digital plant upgrades.
Pace, Sony, Pioneer and other STB hopefuls-all of whom are eager to crack the duopoly's control-showered other solutions at the NCTA convention and at the previous month's Philadelphia Cable-Tec Expo, run by the Society of Cable and Telecommunications Engineers.
Pace, for example, unveiled its DC -- 550 HD set -- top box, now being deployed in limited quantities by Time Warner Cable. The unit is the "smallest" HD STB, according to Pace. But more significantly, it has a video loop-through connectivity so that it can be tied into DVD players and game consoles. It also supports HD video scaling in program guides and has zoom and stretch control features.
For their part, Motorola and S-A also continue to crank out HD and digital video recording technologies as the cable industry continues to waffle about how much emphasis to put on DVRs so as not to stymie the VOD juggernaut.
The nature of that juggernaut was at the core of the NCTA convention-and of the confusion. For example, the opening session featured an onstage chat among Microsoft's Bill Gates, Comcast CEO Brian Roberts and Time Warner CEO Richard Parsons. Their landmark gab was expected to include a deal calling for the big cable companies to shift toward Internet Protocol in their operating process-a big win for Microsoft and a stake in the heart of cable's legacy technology providers.
An unnamed last-minute snag (believed to be a Comcast nit-pick) delayed that announcement-and set up some awkward moments on the stage during that opening session. But the digital dynamic appeared to be underway nonetheless.
HDTV, as seen and shown by cable moguls, is part of that picture.
Gary Arlen, a contributor to Broadcasting & Cable, NextTV and TV Tech, is known for his visionary insights into the convergence of media + telecom + content + technology. His perspectives on public/tech policy, marketing and audience measurement have added to the value of his research and analyses of emerging interactive and broadband services. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the long-time “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports; Gary writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs.
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