NATPE: Executives Debate Advanced TV

Even as producers shoot ever more in high definition, and even as the 2002 conference of the National Association of Television Producers and Executives buzzed with fresh pitches for interactive TV ideas, those in the thick of the hottest technologies were clear in their assessment of advanced technologies: for now, the economics just don't hold up.
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LAS VEGAS

Even as producers shoot ever more in high definition, and even as the 2002 conference of the National Association of Television Producers and Executives buzzed with fresh pitches for interactive TV ideas, those in the thick of the hottest technologies were clear in their assessment of advanced technologies: for now, the economics just don't hold up.

NATPE 2002 included, again, its "D-Town" pavilion, with demos and discussions on topics from HD post production to revenue prospects in interactive TV. But despite the lifelike grasshoppers crawling on HD screens, and despite the apparent success of interactive ventures in places like Denmark, few executives were sugarcoating the financial prospects of high-tech ideas.

A DirecTV executive, for example, when asked whether viewership of its HD offerings is "substantial or significant," said it isn't.

Executives with TV shows like Who Wants to be a Millionaire? and Survivor spoke of the Web sites that enhance those programs. But even they were lukewarm about the future of interactive TV – just weeks after Consumer Electronics Association President Gary Shapiro called the outlook for growth and change in the consumer electronics industry "phenomenal."

For 18 months, DirecTV satellites have beamed HD channels. Mark Cuban's Dallas-based HDNet runs sports programming 18 hours a day, with pay-per-view on the other six hours.

"We have seen the growth not go as quickly as we'd hoped," Stephanie Campbell, DirecTV senior vice president for program development, said at a NATPE panel. "It's sort of a missionary effort to get the word on HD out there."

To promote its crusade, DirecTV includes HD in its regular package instead of charging extra, Campbell said. DirecTV asks users to register so the company can count its HD viewers, but does not release those figures.

At least for the foreseeable future, Campbell said HD programming will not increase significantly because a single HD channel consumes the bandwidth of five regular channels. And until demand increases – or, perhaps, when more bandwidth is available after a merger between DirecTV and competitor EchoStar – don't expect much more HD channels by satellite, she said, although DirecTV will announce one new HD channel early this year.

"Today, we're actually burning a transponder for each (HD) channel," she said. "Right now, the engineers are working feverishly to figure out how to stack them, because we have to be able to do that to proceed with our plan to launch additional HD channels. Until the compression improves to the point where [HD bandwidth requirement] is virtually the same as a regular video channel today, it's tough to justify the economy. Right now there isn't enough of it around for us to fill 10 channels."

Neither satellite provider has announced any plans to carry the major networks' HDTV.

But Cuban, whose productions included the NBA game broadcast by NBC on Super Bowl Sunday, Feb. 3, was optimistic about the proliferation of HD sets, despite the financial losses of his pioneering HD projects.

"If you look at the price-points of televisions this past Christmas, you'll notice that they're dramatically different," he said. "People don't buy non-HD-capable big-screens anymore. You'd have to be an idiot to buy an analog big-screen."

ONWARD IN HD IN RALEIGH

At Capitol Broadcasting Co.'s WRAL in Raleigh, N.C., program associate Jimmy Goodmon Jr., the son of Capitol President and CEO Jim Goodmon, has a rosier HD outlook – rosy enough to invest each year in about seven original HD productions, such as documentaries. And the entire WRAL newsroom has been digital since October 2000.

He's also using that news footage as the raw material for a 24-hour local HD news channel. In addition, WRAL's HD-1 ENG truck has covered special events around the country. And for the second year, he said, WRAL and other CBS affiliates are mulitcasting the entire NCAA basketball tournament in digital, with the Final Four in HD.

"We're not letting the economy stop us," Goodmon said.

Of its 19.39 Mbps digital stream, WRAL devotes 13.5 to HDTV, 3.5 or more to SDTV and another one or so to datacasting via accessDTV's TotalCast system, which users receive with a PC card and desktop antenna.

The datacast periodically updates users' hard drives with news, sports, short movies and other programming including a "microsite" version of the station's Web site.

Goodmon estimated more than 5,000 people tune in to WRAL's HDTV, and he speculated that the video receiving cards in PCs will someday disappear as an add-on, with such capabilities instead being built-in on most PCs.

WHITHER INTERACTIVE?

Many talk about interactive services, from video-on-demand to live-participation games to companion Web sites. But executives at NATPE dreamed aloud of a producer of the future who will reveal the now-hidden killer business model.

Even the most talked-about Web enhancements of TV shows – such as the expanded content from Survivor available with RealNetworks – are mainly convenient cross-promotional add-ons for projects that have already found success.

"Right now, in this universe, with the penetration of broadband and various applications, I don't see interactive TV driving viewership, said Conrad Riggs, business partner of Survivor executive producer Mark Burnett. "I think it's an add-on, a great add-on for the right show."

Millionaire executive producer Michael Davies, indicated no one at his show is becoming a millionaire from the show's Web component.

"It's fun for the audience," he said. "From an executive producer standpoint, it's always appealing to offer our audience an extension of the number of ways they can play the game."

But is it profitable? No, he said.

And is America ready to talk back to its TV screen?

"Culturally, I have some suspicion that the American television audience is a little more passive than audiences around the rest of the world," Davies said. "The American television audience has a great tradition in coming home, flopping down on the sofa, and turning on the television and not wanting to work that hard. And there's nothing wrong with that."

At NATPE, attendees could check out an interactive quiz show in which Danish children answer questions through a set-top box, with the quickest young Dane earning a prize or coupon. They could learn about a proposed reality-dating project called Live Auction, in which home viewers could bid online for dates.

But the interactive schemes generally follow a successful show – not the other way around.

It's hard to get a television program developed and sold to a network, Davies said, and it's next to impossible to add another layer of cost without a solid revenue plan.

Eddie Seslowsky and Mark Zagorski of WorldNow, an Internet sales company, described how their Web-TV crossover works. And they have deals with hundreds of stations.

A plan, they said, might be to tap into advertisers that didn't use TV before, such as law or medical offices. Add a Web link related to the sponsor, such as medical information or an "Ask the Experts" legal advice area. Coax contact information from Web surfers for follow-up with a sales pitch. And make sure the news anchors plug the Web services.

One Kentucky eye surgery practice advertising on a broadcaster's site scored a database of 600 prospects for laser surgery, with about 30 eventually undergoing the $4,000 procedure. The practice took in $120,000 in fees on the $24,000 investment.

"The challenge for the station is mixing sales with the news department," said Seslowsky.