That's how it went for the cable TV industry this week, as Federal Communications Commission Chairman Kevin Martin was forced to beat a retreat from his widely publicized plan to expand the scope of the FCC's regulatory power over the US cable TV industry under the so-called 70/70 provision.
While that would seem to be cause for relief for cable TV executives, Martin has instead put forward a compromise plan that, if adopted at the FCC's next meeting Dec 18, would result in the FCC placing a limit on the number of customers nationwide that can be served by any single cable television company.
If this is compromise, it makes one wonder what sort of draconian regulations Martin would have unleashed on cable TV had he been able to push through his 70/70 plan.
I'm no fan of the cable TV industry, but it's difficult to see how this sort of arbitrary cap on any company's growth potential would benefit consumers. And I'll go further out on the limb and say that I don't see any obvious consumer benefit to areas where the FCC has traditionally regulated the Pay TV industry.
But leaving that broader rant aside, it really doesn't seem to make a lot of sense to limit the size of any single cable TV company, particularly in an environment where there's more and more competition for pay television dollars.
The real problem here is one of the key issues with government regulation in general -- controls and restrictions are being driven by the demands of competitor companies in an industry or related industries, rather than any legitimate need or genuine desire to protect consumers.
It's not really surprising that Sony Corporation CEO Howard Stringer has publicly backpedaled from his recent comments that the HD disc format war is a "stalemate" that "doesn't mean as much as all that."
So now Stringer's out there setting things right, by saying Blu-ray has "momentum and scale" and "I think Blu-ray is just a better format."
Blah, blah, blah...
I believe Stringer's original, unsanitized comments are probably a lot closer to his true, gut feel as a businessman about the HD disc marketplace. And I think a stalemate is exactly what Toshiba is aiming to bring about through its aggressive price-cutting. The way I see it, Toshiba can't win at this point, but it can inflict plenty of damage on Sony whether it follows Toshiba downmarket on player pricing or not.
I think there's also something fundamentally untenable about a continuing stalemate. The market for a product this new generally won't function efficiently without realistic prospects for dramatic near-term growth -- businesses play the game to make money. This truth applies to all parts of the product food chain here, from the format "owners" at the top of the pile, down through the movie studios, the pressing plants, and the retailers and rental outlets. If neither format can take command of this market and accelerate the number of units moving into consumers hands, then key parts of the chain will lose interest and look for better places to invest their time and money. From there, stalemate quickly becomes defeat.
As a result, I believe that Sony and Toshiba must get together and work out a long-term HD disc alliance.
Federal Communications Commission Chairman Kevin Martin told the New York Times last weekend that he believes the cable television industry is now subject to increased regulatory scrutiny under the so-called 70/70 rule. This 1980s-era provision kicks in when cable television becomes available to more than 70 percent of homes nationwide, with 70 percent of those capable of receiving it actually subscribing to it.
I'm not a statistician, but it's difficult to understand how this regulatory wrinkle has suddenly come into play in a pay TV environment where cable television's market share has progressively shrunk in light of satellite TV gains over the past decade. And now there's even more competition to cable TV, with the arrival of teleco TV providers such as Verizon and AT&T.
Don't look now, but no one is running to the defense of Chairman Martin's prototype pocket calculator-cum-time machine.
More interesting is the speculation that Martin's 70/70 talk is designed to provide leverage that would aid him in making another run at mandating an "a la carte" pricing system onto cable TV providers -- "a la carte" would allow consumers to select and pay for only the channels they wish to view.
Although Martin has said he's not focusing on "a la carte," the 70/70 saber-rattling is widely viewed as an attempt to gain leverage over the cable industry in this and other upcoming regulatory battles.
Announced at the Consumer Electronics Show this past January, Warner Home Entertainment initially planned midyear releases of its Total HD product, a dual-format disc containing a movie in the HD DVD format on one side and Blu-ray on the other. Those plans were subsequently pushed back into early 2008, but now Warner tells High-Def Digest it has no current plans for Total HD releases.
Sony's CEO calls the HD DVD-versus-Blu-ray format war a "stalemate" that "doesn't mean as much as all that"... Following Nielsen's recent lowball estimate of HDTV households, Leichtman Research ups the ante... HD Net sues over DirecTV's move to push the pioneering network's channels into a secondary HD pay package... Blu-ray's DRM protection is cracked -- not for the first time and likely not for the last... Flat panel HDTV prices are stablizing, and LCD and plasma TVs earn top marks for reliability... And Nintendo's Wii is keeping it simple.
Click the Read More link below to find out more about these and the other leading stories in home entertainment in the latest edition of The Weekly Rewind...
Naturally, most observers, commentators and analysts have swiveled their attention in the direction of Sony and Blu-ray, looking for the next price cut gambit. But so far Sony doesn't appear inclined to play "follow the leader," if it means jumping off the edge of a cliff.
It's been recognized for some time now that reliable, authoritative data on the number of US HDTV households is elusive. Up to now, the most often-quoted data has come from the Consumer Electronics Association, and that trade group's most recent estimate puts US household penetration at 32% (36 million homes), with that share predicted to increase to 36% by the end of this year.
Now, Nielsen comes along and releases a new survey that pegs current HDTV penetration rate at less than half the CEA figures.
Earlier today, JupiterResearch released a new market research report that paints a pessimistic future for the purveyors of Blu-ray and HD DVD hardware and software.
While the conclusions of the report may turn out to be more or less correct, the findings ignore the two most important factors in any forecast for this market -- one, the inherent incompatibility between the competing formats; and two, and the apparent failure of the new formats to generate genuine, broad-based enthusiasm among the trend-setting "early adopter" demographic.
[Publisher's Note: The
following article is provided to ISF Forum readers by G. Alan Brown,
the founder of CinemaQuest Inc. and creator of Ideal-Lume, the sole
source for reference standard lighting products used in professional
and home viewing environments throughout the world. Alan is one of the world's most knowledgeable, passionate and eloquent
advocates for display industry
standards and imaging excellence. We're pleased to be able to
provide Alan with a platform to explain why your home viewing environment
matters and what you can do to make it work better for you.
You can read more about Alan and his background here.]
There’s no doubt about it – consumers are becoming ever more demanding about television picture quality. This relatively new phenomenon is largely being driven by the fact that consumers have begun to move en masse to HDTV. As a result they’re suddenly spending anywhere from three to 10 times (or more) what they would have paid half a decade ago on a box-standard, replacement-level color television.
And, as a result, consumer expectations have been irreversibly raised.
While it appears that even casual viewers understand that HDTV technology is at the heart of the picture quality improvement all those extra TV dollars are delivering, there’s also an apparent realization that while the display may be the biggest and most obvious piece of the picture quality equation, it is most definitely not the only consideration.
This is probably most apparent in the explosion in demand for HDTV programming – whether it be over-the-air broadcasts, cable or satellite program delivery, or via new
packaged media, such as Blu-ray and HD DVD discs. There’s also rapidly growing
interest by consumers in professional video calibration services, as well as
the use of high-end cables and interconnects, video scalers and processors, and
power management and conditioning solutions.
All in the quest for even better picture quality.
The Missing Link: The Viewing Environment
Given all that, there’s still one fundamental ingredient in the picture quality recipe that is the least-recognized, the least-understood, and without question, the most consistently overlooked element – the viewing environment. Despite a
traditional indifference to viewing environment requirements, they have a direct and
weighty impact on the picture quality that an HDTV can deliver to viewers.
Perhaps the best way to bring the mystery of the ideal home viewing environment into clearer focus is to gain an appreciation for the importance these factors are given by film industry and television professionals.
Because the Conservatives are not the majority party in the UK and because a general election is unlikely to be held there for at least a year, the Conservatives' policy position is probably more public relations ploy than legal reality. But that doesn't mean that environmental groups in other countries aren't paying attention, with a report now circulating in Australian government circles suggesting a ban should be imposed there.
The recording industry strategy up to now has been to sue file sharers and then settle out of court at lower cost than the penalties available under copyright law. But one defendant decided to opt for a jury trial and that looks like maybe not such a wise decision.
