[opendtv] News: An Advance in Digital TV Is Coming. Why Isn't AnybodyExcited?

Hmmmmmm...

The mandate for 1/2 of all big screen (>36") receivers to have an 
integrated ATSC receiver kicks in Thursday July 1st.  For some reason 
the author of this New York Times article seems to think that the 
mandate also extends to the provisioning of a one-way cable ready 
tuner as well.

It may well be true that sets that include the ATSC receiver will 
also get a cable ready receiver, based on a voluntary  decision by 
set manufacturers to include both, however, I cannot remember such a 
mandate from the FCC. Did I miss something?

Regards
Craig



http://www.nytimes.com/2004/06/28/technology/28cable.html?th

An Advance in Digital TV Is Coming. Why Isn't Anybody Excited?
By KEN BELSON

Published: June 28, 2004

Nothing, it seems, comes easily when cable providers and electronics 
companies converge.

  Cable companies have a federal mandate, starting Thursday, to 
provide consumers with a new way to get digital and high-definition 
television programs without having to pay for a separate digital 
set-top box.

  As part of the government's long-term goal of creating an entirely 
digital broadcast universe, the plan requires that cable providers 
distribute cable cards - each about the size of several credit cards 
stacked - that can be plugged into slots on new television sets for 
access to encrypted digital programming. Starting Thursday, at least 
half of all televisions that are 36 inches or larger will have to 
include a slot for a cable card.

In addition to eliminating clunky set-top boxes, the cable card 
technology is meant to help bolster television sales and motivate 
consumers to sign up for digital services. But the reality may be 
quite different.

The cable cards, unlike set-top boxes, provide only one-way signals: 
from the cable provider to customers' homes. Consumers with 
televisions that use the cards will not be able to receive video on 
demand, interactive program guides and other services that require 
two-way signals. Indeed, those services are a central selling point 
for digital programming.

  This significant drawback means that people with set-top boxes may 
be unlikely to switch. Television makers are hoping that the cable 
card option will be attractive to the roughly 50 million cable 
customers who do not subscribe to digital programs and are looking 
for an easy way to receive digital services. But most analysts are 
skeptical that the market will embrace the technology.

  "From a consumer standpoint, this is a nonevent," said Bruce 
Leichtman, president of the Leichtman Research Group, which tracks 
the cable industry. "Consumers don't hate their set-top boxes. And 
there's a reason people still have analog sets. They're not 
interested in digital television."

Because the cards allow only one-way signals, television 
manufacturers and retailers are unable, or unwilling, to predict the 
demand for cable cards. Few companies, though, expect a run on the 
new card-ready sets.

"Cable cards alone won't be enough to motivate people" to buy a new 
television or sign up for a digital programming package, said Page 
Shaper, director of marketing for new products at  Charter 
Communications, a major cable provider in Denver. "When it's two-way, 
the story changes."

  Despite the modest expectations, most TV makers say the one-way 
cards are a necessary first step in the move to digital broadcasting.

  Cable providers also say the requirement to make cable cards 
available to consumers has prompted them to set up delivery and 
customer service systems that will be needed for two-way cards that 
are likely to be introduced in a few years.

  The one-way cards are the result of an unusual compromise between 
the cable providers and television makers that dates back to the 
1990's, when both industries, prodded by the Federal Communications 
Commission, were eager for progress on digital programming, even if 
the one-way technology was less than perfect.

  Since then, digital programming has blossomed. About 30 percent of 
all cable customers receive digital signals, the vast majority via 
set-top boxes, which have become more sophisticated and cheaper.

  This evolution has made cable cards, while still convenient, far 
less desirable than it was once thought they would be. Even so, 
television manufacturers say the cards could give an added kick to 
already strong demand for digital and high-definition televisions. In 
the coming years, smaller televisions will also have to have card 
slots.

  The Consumer Electronics Association expects sales of digital 
televisions to jump 41.5 percent this year and nearly quadruple by 
2007, thanks mainly to declining prices and the greater variety of 
sets. Panasonic, for instance, will have 14 card-ready models on the 
market by next year, priced anywhere from $1,200 to $9,000 for a 
high-end high-definition set.

  It is far from clear, though, that people buying these high-end 
televisions will choose to use a cable card instead of a set-top box.

  Manufacturers hope the new sets will sell well with consumers new to 
digital programming, particularly among families adding extra sets in 
bedrooms, kitchens and spare rooms.

  "This at least gets them into the digital cable environment," said 
Peter Fannon, vice president for technology policy at Panasonic.

But electronics industry representatives say consumers may have a 
hard time getting the cable cards because cable companies are 
dragging their feet. Though the cards are small and can be sent to 
consumers by mail, most cable companies plan to dispatch workmen to 
deliver the cards and charge customers as much as $60 for the 
installation.

Cable companies say the hand delivery is needed, at least at the 
outset, because the system is so new.

The hefty fees and wait for installation, though, are tactics meant 
to discourage customers from using the cable cards, according to Gary 
Shapiro, president of the Consumer Electronics Association. Cable 
companies would rather have consumers order two-way services like 
video on demand because they generate additional income, he said.

"Two-way service is where all the money is for the cable providers, 
so they don't want one-way cable cards," Mr. Shapiro said. A cheaper 
and more effective strategy would be to sell the cards to consumers 
at retail outlets like  Best Buy, he said.

Cable providers and electronics manufacturers, however, agree that 
one-way cards will succeed only if retailers make clear what the 
cards can and cannot do. The fear, the companies and analysts say, is 
that electronics shop clerks, eager to earn commissions, will give 
consumers incorrect information, leading to returns and 
recriminations.

"Consumers have to be savvy to fully understand all the variations," 
said Aditya Kishore, a cable industry analyst at the Yankee Group. 
"There are a lot of little pieces to the puzzle and it is confusing."

In the meantime, the cable and electronics industries are working on 
developing a two-way card. Unlike the one-way deal, satellite, 
technology and entertainment companies are also part of the current 
discussions. One big stumbling block in the new round of talks is 
finding ways to protect copyrights, said participants in the 
meetings, who predict that an agreement on two-way cable cards is 
unlikely to be reached for several more years.



 
 
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