[opendtv] Re: 20060117 Mark's (Almost) Monday Memo

  • From: Bob Miller <bob@xxxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 18 Jan 2006 21:12:58 -0500

Manfredi, Albert E wrote:

>Craig Birkmaier wrote:
>>Given all of the things that Radio Shack sells, and
>>the fact that many companies offer co-op ad
>>incentives to promote their products, what makes you
>>believe it would be profitable for RS to advertise DTV
>>receivers versus other products with significantly
>>greater sales potential?
>I don't think I was saying anything strange, Craig. I
>thought it was drop dead obvious that a product that
>customers don't know about won't sell.
>Radio Shack sells items that are advertized by others,
>such as their DBS systems and cell phones. And they
>sell items that have been on the market for a long time,
>which require no advertizing (batteries, cables,
>connectors, antennas). But this new specialty item could
>easily be promoted on OTA TV, where the potential
>customers are, either by Radio Shack or by Humax. Had
>the box sold more rapidly, they might not have needed a
>close-out sale, eh?
>What was the lesson from the Berlin DTT transition?
The lesson from Berlin was that if you have a modulation that works well 
everyone gets on board and pulls together and makes it happen. The 
public was educated about the transition. Those who could not afford a 
receiver were addressed. Manufacturers came forward with lots of choice 
in receivers. Prices were low and have fallen since. Content was 
plentiful and the only course offered to consumers was not to buy a new 
expensive TV set. When is the last time you saw an ad in the US for a 
digital receiver that you could use with your current analog TV set?

And as to manufacturers being on board where is LG? Promising a $50 
converter, non HD, in 2009 if someone buys a boatload or maybe two 
boatloads for delivery on the Potomac. That $50 doesn't include a profit 
margin, allocation for returns, distribution or advertising cost. I 
wonder if it includes IP royalties for LG, a 5th gen chip or a power cord.

I remember the disdain that such as Nokia, Pace and others had for 8-VSB 
back in 2000. They have  stayed away from 8-VSB wisely while heavily 
involved in ventures like Crown Castle's DVB-H venture here and anything 
to do with DVB-T anywhere.

The lesson from Berlin is we have the wrong modulation or we would be 
doing just as well as the UK, Italy, Germany, France, Japan etc.

France, 1.3 million in first 9 months with only 50% coverage which would 
translate to 7.8 million in the US.

Japan, around 8.2 million receivers after 24 months of digital 
broadcasting which would translate to 18.6 million in the US. And Japan 
is far from full coverage today. In fact for much of this 24 months only 
three cities were covered.

The UK at over 10 million sales of COFDM receivers with 75% coverage of 
the market. That would be 60 million in the US and 80 million if you 
adjusted for coverage. The US has only 110 million households so that 
would be doing pretty good, and without a mandate.

Brazil, again rejects 8-VSB. Whew! What a relief, I was so worried. I 
guess the US could not buy this one. I wonder how long it will take the 
ATSC to delete Brazil from their site.

And I could go on with the lessons we should be learning Bert. Berlin is 
the least of it.

But where there is stupidity, corruption and ignorance there is also 
opportunity. We could leapfrog all these others by considering a new 
modulation and codec now. 8-VSB would have saved us from an even worse 
folly. The UK is now considering how to switch to MPEG4 with over 10 
million MPEG2 receivers out there. At least we don't have that problem.

Bob Miller

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