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HDTV Divas

Industries jockey for bragging rights

WASHINGTON

The good news for HD proponents on the eve of 2005 is that if you have an HD-capable monitor, you can view a lot of channels today with the right set-top box--if you live in a top-20 market, or almost anywhere in Pennsylvania. The bad news is there still isn't much 1080i and 720p in a lot of smaller markets, although that may not be HD's biggest problem right now. And no cable companies are bragging about (or publicly releasing) how many HD subs they have.

HD is not cable's priority these day. Endlessly prompting subscribers to leapfrog from analog to digital tiers--and heavily promoting Internet broadband, cable telephony and VoIP--are proving to be lucrative, albeit distracting, diversions from the HD build-out that seemed so promising a few years ago. The high churn rate of digital cable customers who went back to analog tiers or to DBS, hasn't helped ratchet up the HD market either, outside the largest DMAs. Nor has an elusive digital must-carry rule.

WHAT REVOLUTION?

Yet three different industries don't hesitate to take credit anyway for "leading the digital revolution" (as the National Cable & Telecommunications' Web site labels it) toward HD growth. NCTA says it is clearly the leader. Not so fast, says NAB. Don't forget about those local broadcasters who started on-air with HD signals nearly six years ago. In the other corner, the Satellite Broadcasting & Communications Association says DBS is the true leader in propelling HD's growth.

"In the last two years, cable has gone from zero to 90 million homes now technically capable of receiving HD programs from their local operators," said Brian Dietz, NTCA senior communications director. "Cable has now thoroughly embraced HD and is not just talking about it. We've invested a lot of money in order to bring consumers HD. Today every cable company out there provides digital services, and with it, HD in [some markets], in different ways."

It may sound a bit like déjˆ vu all over again to some longtime observers, but the NCTA, the Consumer Electronics Association and the FCC itself (which recently launched its own "DTV--Get It!" consumer re-education campaign), believe they are now finally starting to see the beginning of a significant change to full digital and HD conversion. It's been six years since terrestrial HD programming first began on PBS, NBC and other broadcast networks and thus became available to cable venues.

As of October, there were 17 (nonbroadcast) cable channels featuring at least some HD, ranging in genre from sports (ESPN HD, Comcast SportsNet, Madison Square Garden Network) to movies (Bravo+, Starz HD, Cinemax HD and HBO HD) to science (Discovery HD Theater). Neither Comcast nor Cox Communications releases statistics on how many of their subs access HD programming via cable. Dietz said compression rates for SD and HD channels tend to vary between local cable systems (rates are also a guarded secret), but he said the cable industry adheres to the rule that no digital programming will be intentionally degraded en route from its original source to the end user.

Brain Roberts, chairman and CEO of Comcast, the nation's largest cable company with more than 22 million subs (more than two-thirds still analog), said in a conference call in late October that his company added more than 340,000 digital-tier subs in the previous quarter--and in-stalled more than 200,000 HD boxes. (The HD numbers were mentioned after Roberts first told reporters about the sign-up of nearly 550,000 new broadband customers, a Comcast quarterly record.)

Comcast said it technically can provide HD services to about 19 million customers, which is more than 90 percent of its overall sub base. It currently provides HD to subs in at least 28 states--although in 19 of those states, only one or two markets are affected. (A major exception is Comcast's home base of Pennsylvania, where HD is available in all-size markets across much of the Keystone state.) Comcast deploys HD in 18 of the 20 largest markets. The smallest DMA served is the retirement/resort town of Panama City, Fla. (No. 159).

Cox spokesman Bobby Amirshahi said as of the third quarter, 37 percent of its overall customer base now subscribes to its digital tier (although again, he would not disclose the number of Cox HD subs). Both Cox and Comcast charge only a few extra dollars to rent HD set-top boxes, and neither charges extra for providing basic broadcast HD (all broadcast networks in most markets served) or cable HD programming, although premium HD channels like HBO do stipulate their own fees.

DRIP, DRIP, DRIP

Although most local broadcast HD channels remain elusive to digital cable carriage outside the major DMAs, in the absence of digital must-carry rules (and sizable audiences with HD equipment--about 6 percent nationally today), local carriage agreements are announced fairly regularly. In late October, for example, WB affiliate KDAF-DT became available to a half-million Comcast subs in Dallas-Ft. Worth (Channels 214 or 657). Like the major broadcast networks, most WB primetime shows are simulcast in HD.

NAB, meanwhile, thinks the cable industry is taking far too much credit for the digital conversion.

"It is disingenuous for cable to claim it is driving the HD revolution," said NAB spokesman Dennis Wharton, "when the reality is that cable was late to the game on HDTV and is trying to play catch-up to broadcast television leaders. There are hundreds of cable channels, and barely a handful has any HDTV programming whatsoever. If that's 'driving the HD revolution,' then cable is riding in a horse and buggy."

For its part, the DBS industry (which appears to be abandoning its efforts to compete with cable and telcos for broadband customers) also thinks that cable has little to be proud about in the digital revolution. It contends that DBS deserves the credit for pushing HD to the forefront of the American mindset.

IT'S SATELLITE, STUPID

SBCA President Richard DalBello said both the "cable and broadcast industries are still struggling to catch up, as DBS continues to define the technological boundaries of HDTV." He predicts that as compression technology improves, "expect the number of satellite-offered local and national HD channels to rise substantially."

DirecTV announced in September that its planned launch of two new satellites next year will give the satellite broadcaster enough capacity to offer more than 1,500 local HDTV channels.

Advertisers have not exactly been lining up to buy time (much less at higher rates for higher quality) in the HD realm, especially as audiences remain relatively small. A few million viewers of NBC HD's Olympics coverage last summer can attest to the lack of HD-centric spots firsthand, after they had to endure the same Sony spot promoting its HD products over and over again.

Well-financed national HD networks aside, inserting ads into local HD programming presents its own set of challenges. But help may be on the way: Cox recently tested the industry's first local ad-insertion into

HD shows using a digital video networking platform from Terayon Communications.