[opendtv] Re: How important are new Codecs wrt OTA Broadcasting?
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: opendtv@xxxxxxxxxxxxx
- Date: Wed, 22 Feb 2006 09:59:00 -0500
Coming out of hiding for the moment.
At 7:17 AM -0500 2/22/06, Don Moore wrote:
>With a majority of viewers watching OTA via cable or satellite, why are
>we worried about this?
>
>We've allowed cable and satellite to replace our transmitters to the
>point where they (cable and satellite) are wanting direct, raw,
>un-compressed feeds so they can provide the best signal for their
>subscribers.
>
>We've missed the boat here, and there may not be another one available.
>It's just a matter of time before broadcasters are either made
>irrelevant or we retake the leadership role in video communications.
>
>Don Moore
>
I have been quite busy lately and have not spent much time
interacting with the list. Fortunately, the list seems to have a life
of its own, and I doubt that I have been missed much.
;-)
I have been saving us some of the more interesting threads and plan
to spend some time responding to a few, and tying some of them
together.
Here's a hint at whereI think this shipwreck is going. The thread
about codecs highlighted several interesting issues:
Uptake of DTV and what the stats really mean.
We learn that less than 20% of Koreans have upgraded to HDTV. This is
only surprising in the fact that this number is higher than I would
have expected. HDTV is STILL a niche market, even here in the U.S.
One must factor in the cost of the receiver/monitor, and the cost of
content to feed the beast. I suspect that for the vast majority of
Korean's the cost for HDTV versus the benefits derived, cannot be
justified.
The stats in other global markets - including the U.S. - have strong
parallels with the type of DTV service being provided. The 56% number
for the U.S. is a strong reflection of the fact that cable and DBS
have had very good success converting their customer base to DTV
services, and more recently they have begun to develop a significant
market for HDTV services as well. But the reality is that the success
of DTV in the U.S. is primarily related to the increased programming
variety afforded through the delivery of SD quality to subscribers.
This is true as well for every global market where SD quality DTV
services have been offered in the free & clear. The common thread
here is that consumers will invest in DTV receivers, if they realize
a benefit. In countries where subscription services have NOT
dominated the market, DTV is growing, ESPECIALLY when it is packaged
to increase programming variety a.k.a. Freeview.
Kon has the correct technical answer to the question Mark raised in
this thread. Any service will need to migrate to new technologies as
they emerge. The subscription based services can do this by replacing
old receivers periodically, but even for them, programmability is
likely to be appealing as competitors keep pushing the envelope.
Remember, it is not just over-the-air broadcasters who are threatened
by new distribution technologies. Don correctly points out that U.S.
broadcasters have conceded delivery of their content to cable and
DBS. They have done this in part because they can use the cable and
DBS infrastructure to collect "subscriber fees," while they continue
to give away their content to the bottom feeders who still use the
NTSC service. For the next few years it will be very appealing for
broadcasters to stick it to cable and DBS subscribers as they
negotiate large payments in return for retransmission consent
agreements. I suspect that this will only make matters worse, as
consumers become aware of just how much they are paying for FREE TV.
This is basic economics. It is no different for TV than for gasoline.
Alternatives to gasoline powered cars only become viable when their
operational costs are equal to or lower than continuing to use gas.
As the monthly cost for TV services continues to ratchet up, this
creates the environment for alternatives to cannibalize the
cable/DBS/OTA oligopoly. I can buy a great deal of content for
$75/month. The answer for broadcasters is not difficult to understand.
It is called competition.
We have seen in Great Britain and now in other markets, that
delivering 30 or more channels in the free and clear works. It may
not be as profitable as the subscriber based business model here in
the U.S., however, one must question how much further subscriber fees
can be increased before competitive alternatives become appealing.
Broadcasters CAN change the rules of the game...the only question is:
Is the level of pain sufficiently high to tell the NAB, the
politicians, and the content oligopolies where to stick it.
I am hopeful that we may be approaching the threshold of pain.
Regards
Craig
It is not too late to save OTA broadcasting, however, it is the
business model, not the technology that is the big hurdle.
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