High-definition television’s promise — to deliver high-resolution pictures accompanied by near theater- quality sound — is being kept, albeit gradually and with some trepidation and confusion among HDTV service and content providers and, most importantly, consumers.
The quality of high-definition technology has never been questioned. It provides up to 1,920 active horizontal pixels by 1,080 active scanning lines, represents an image resolution of more than 2 million pixels and renders a widescreen format. Translation: By any standard, it’s far superior to standard-definition television.
And there’s no denying HDTV’s value as a competitive tool in the intensifying video and data delivery business, led by cable, satellite and a growing presence from telephone companies.
Still, some issues remain. The Federal Communications Commission is affecting the delivery of HDTV, through its mandate that all television sets must have digital tuners by July, 2007 — and its requirement that all broadcast-television stations switch to digital from analog transmission (though not necessarily HDTV) by Feb. 17, 2009.
And there is still confusion among consumers about exactly what high-definition is and how it works, with more than half of viewers believing they’re watching HD when they’re not.
Then there is the bandwidth issue. Cable operators are cautiously pushing ahead with bandwidth expansion and management plans to accommodate HDTV’s voracious appetite, but only on an as-needed basis.
Despite these pressing issues — which have stunted the spectacular growth many predicted for HDTV early on — 34 million homes are expected to be able to view the high-resolution format by 2007, according to a Kagan Research study.
With the FCC mandate, the improved picture quality and the competitive value of HD, it’s no wonder service providers, manufacturers and content providers are now getting clarity about high-definition’s expanding role in the communications space.
“HD is definitely one of the top three priorities, along with [digital video recorders] and [video on demand], as a tool for cable operators to compete against satellite. Cable is responding to satellite’s early move with HD to gain market share, and leveraging their local HD programming early on in the game,” said Michael Cai, director of broadband and gaming for Parks Associates, a media-research firm.
Leveraging indeed. Comcast Corp. has stepped up its HD service with a reported 10 million digital customers, a 47% penetration rate — 28% of whom currently subscribe to a DVR or HD service. The company has also announced it will increase its high-definition offerings later this year.
Insight Communications Co. is also expanding its HD service to include a five-channel package of high-definition content for $7.95 per month and free local programming.
Most of the top MSOs are expected to add HD programming in the next year.
DISHING IT OUT
On the satellite side, EchoStar Communications Corp.’s Dish Network is providing 29 HD channels in 31 markets, significantly more than its cable competitors. And it is addressing the bandwidth issue by including MPEG-4 technology in its high-def receivers, which will allow a significant increase in the compression rates of the current MPEG-2 technology.
“HD has been notoriously slow to take off. But the FCC has kick-started HD and is pressuring cable and content providers to launch HDTV, which they have,” said Seth Kenvin, vice president of strategic marketing at BigBand Networks. “But with VOD, broadband speeds increasing and now the bandwidth needs for HD, operators are getting strapped for bandwidth, which is at a premium, especially with forecasts of 30-50 HD channels in the next few years.”
Kenvin believes a number of combined techniques will at least temporarily solve the bandwidth issue. “Rate-shaping, switched broadcast, upgrading plant to 1 GHz, node splitting, and eliminating the analog tier altogether are the best ways to gain bandwidth efficiencies,” he said. “Another answer is moving from MPEG-2 to MPEG-4, but currently there aren’t any devices in the home that can receive it. There’s no single answer.”
For consumers, the question is just what is HD? “There’s confusion among consumers. Many don’t realize they need to subscribe to the service that provides programming in HD. There’s a definite disconnect there,” maintained Michelle Abraham, principal analyst for research and analysis group In-Stat, a sister company to Multichannel News.
Price is also a factor. “Most consumers couldn’t afford a four-thousand dollar HDTV set,” Abraham added. “But prices have fallen to the mid-range, and that has helped the market.”
Additional help is on the way via the Consumer Electronics Association and the National Cable & Telecommunications Association. The trade groups announced a joint effort to “broaden educational outreach to consumers about the transition to digital and HDTV” through public-service announcements, enhanced retail sales force education and other awareness efforts.
And with HDTV, awareness counts. “The move to HD has been frustrating, with few programs available, and not much penetration. But that is gradually changing,” said Mukul Krishna, industry manager for digital media research and consulting group Frost & Sullivan. “The retail stores say HD sets are flying off the shelves, but our vendor feedback says that’s not true, and that consumers are relatively clueless about the FCC deadline and what HD is.”
Nevertheless, Krishna and others see HDTV as a viable competitive tool, particularly when mixed with cable’s interactive services, which its satellite competition can’t provide.
WHAT'S TO WATCH?
“The ability to watch HD is there, but there is currently little compulsion from the end-user market because of the few channels in HD available. That’s what people are struggling with,” maintained Krishna. “What will help cable the most is its ability to provide two-way, on-demand services and targeted advertising. Operators can provide targeted ads for each TV in a household, and with HD. Satellite can’t do that.”
Though not necessarily a struggle, high-definition set-top box manufacturers are being challenged to make the transition to HD boxes, which must include new chips, more memory, an advanced process to get technology “to the edge” and, invariably, more cost, said Scientific Atlanta chief technical officer Dave Clark.
“We’re aware that many people don’t know what HD is. Just because there’s a watermark in the corner doesn’t mean you’re watching HD,” Clark said. “That is a challenge to us: retail, programmers and operators. And how do we effectively service the people when the FCC says, 'Turn off the analog spectrum?’ ”
Good question: and one not likely to be answered until close to the FCC’s 2009 deadline for the transition to digital broadcasting, admitted Krishna.
“When all of the issues are combined, the U.S. market for HDTV will continue to move gradually,” he said.
“Once people have gone to digital, they’ll go to HD,” he explained. “And in 2009, the FCC will fine people for not switching off analog, with 2012 the final deadline.”
The deadline for mass consumption of HD sets is less clear. Most experts agree that awareness, bandwidth and cost issues must be solved first.