HomeVideo Savant Week in Review: DirecTV HD Juggernaut; Digital TV Angst
Week in Review: DirecTV HD Juggernaut; Digital TV Angst
Written by Video Savant
Saturday, 20 October 2007
DirecTV continues to plug away on its HD programming expansion plan, as it rolled out 18 new HD channels during the past week, including FX, Cartoon Network, HGTV, Fuel, Speed and the recently launched Fox Business News Channel. The satellite TV provider also added six HD pay-per-view channels and six regional sports networks.
The most recent additions brings DirecTV's version of its HD channel count to more than 70, and while it may be valid to dispute whether regional sports networks and limited access East/West Coast networks should count as national channels, there's no question that DirecTV can, at last, make a legitimate claim to being the US leader for HD programming. At this point, DirecTV's only credible HD challenger is DISH Network.
While HDTV penetration remains at only around 30% of US households, that number is rising steadily and if 2007 holiday season HDTV sales are anything like 2006, a near-term increase to 40% penetration seems inevitable.
This raises some serious questions for the rest of the pay television industry, in particular for cable television. While the leading cable TV providers have been selectively trickling out new HD channels in the wake of DirecTV's flood of HD additions, this week was relatively quiet on the cable front. And the industry consensus seems clear -- cable TV will have trouble keeping up with DirecTV .
It's certainly true that some of DirecTV's recently launched HD channels are marginal, with relatively little true HD programming (I'm looking at you, CNBC). But just like the HD DVD versus Blu-ray tangle, the unfolding HD war is ultimately a public relations battle.
But unlike the consumer indifference directed toward the "HD Disc Wars," there's more interest here, as well as the fact that there is quite a lot of money up for grabs. Consumers are clearly sizing up these developments, and if the chatter on Internet discussion boards is anything at all to go by (always a question mark), cable TV customers are restless and many appear to be seriously considering a switch to satellite, with DirecTV getting primary consideration.
The cable television industry has been banking on the "stickiness" of its "triple play" bundle, and some providers, such as my local cable TV monopolist, Charter Communications, are clearly more focused on telecom services (Internet and local phone) than video. No doubt there is value in being able to offer this sort of one-stop shopping. But if the video options in that bundle are lacking, the convenience and discounted package deal may not be sufficient to win the day for consumers who just dropped a couple thousand dollars on a new HDTV.
So, maybe the triple play devolves into a double play?
HDTV Programming
In other HD programming news, while HD additions by cable television providers were few and far between this week, DISH Network added the NHL Network, AT&T's U-verse added History Channel, Fox Business and TBS, and Verizon followed up last week's addition of A&E (reportedly its first expansion of HD programming in 6 months) with Fox Business. The recent lack of aggressiveness by Verizon has puzzled some industry observers, but now it has been revealed that Verizon has bumped up against some interim, ultimately addressable, bandwidth obstacles...
Outside the US, Voom Networks, a subsidiary of Cablevision, secured additional exposure as the new Virgin broadband TV service in the UK added the flagship Voom HD channel offered outside North America. HDTV is also spreading across the western pond, with Southeast Asia's first HD channel due to launch next month. Voom HD is also expected to be carried once Singapore Telecom's IPTV service expands its scope beyond that initial channel...
A bit of a puzzler is the BBC trying to determine if it needs to provide UK viewers with a dedicated BBC HD channel. While I can't claim to fully understand the dynamics of the UK television market (or the US, for that matter), it does seem like a no-brainer for the Beeb to step up and provide at least one full-time HD channel...
As reported in previous weeks, television broadcasters have worked up a plan to educate the American public about the 2009 shutdown of the US analog television system and what that means for viewers with analog TVs. This campaign will include public service announcements on participating stations, as well as local outreach. The education effort, coordinated by the National Association of Broadcasters and estimated at a market cost of almost $700 million, will create more than 98 billion viewer "impressions."
The one thing that really stands out for me about the digital TV transition is how much concern there is among our elected officials and bureaucrats that the switch to digital broadcasting from analog should happen without a single inconvenience to consumers (er, voters). I think this speaks volumes about priorities and perceived priorities of everyone involved. Our elected officials really seem to believe that television is the most sacred thing in the life of the average American citizen. Willfully waste a few hundred million dollars of taxpayer money on a bridge to nowhere? No problem. But, boy oh boy, you mess with the public's ability to reliably receive an over-the air television signal and all hell will surely break loose across the republic.
How sad. But what might be even sadder -- they may be correct.
Leaving the political rant aside, getting the word out to viewers about the end of analog broadcasting should be left entirely to broadcasters. The move to digital is absolutely fundamental to the future of the television broadcasting business, and if the people leading the broadcast industry can't see that clearly and figure out how to act effectively on that fact, boohoo for them...
On a more upbeat digital transition note, Best Buy will no longer sell analog televisions. This is a highly effective way to get the word out about the scheduled termination of analog TV broadcasting -- and as a free market bonus, it's also good business for Best Buy...
It seems that one of Wall Street's favorite targets of speculation is AT&T's acquisition intentions, and in the past year much of that focus has been alternating between DirecTV and DISH Network. Of course, DirecTV was recently sold by News Corporation to John Malone's Liberty Media, with that transaction currently under US regulatory review. But that hasn't stopped many industry analysts from thinking that Malone could turn around and sell the company to AT&T, once he's actually in control.
As I've said here several times before, the all-time, most encouraging development I've seen in the pay TV business is the recent, intensifying focus on picture quality. DirecTV really set this in motion, with its yearlong advertising campaign touting its HD expansion plans and its by-the-way-we-have-the-best-picture-quality claims. Of course, anyone who had been paying attention to the HD scene over the past few years knew that DirecTV had long been accused of delivering a watered-down version of HDTV, dubbed "HD Lite." And a customer in California last year filed suit against DirecTV, accusing the company of intentionally downgrading the picture quality of its HD channels.
I'm in the camp that believes DirecTV traditionally delivered something less than the best possible HD picture quality. But by all accounts, DirecTV has raised its game with its new HD channels, as the use of more efficient MPEG-4 compression and newly expanded satellite capacity has greatly diminished any near-term motivation for "bit-shaving."
But what's not cool is DirecTV disputing another company's HD picture quality claims, never mind filing suit to halt those claims. Besides being spectacularly hypocritical, there's likely no completely definitive way to prove which provider delivers the best picture quality -- there are too many factors that determine picture quality and there are likely to be minor variations among the dozens of HD channels offered to customers.
So, the best thing going forward is for all pay television providers to understand that more and more of your customers care about picture quality and that this is going to be one of the key factors in determining where we send our subscription TV dollars each month. Whether it's DirecTV, or DISH, or Comcast or Cox or whoever, as far as we're concerned you can say whatever you want (well, within reason). But know that it will be your highest-paying customers who will determine who is and who isn't properly invested in delivering true HD picture quality...
DirecTV also announced this week that its next-scheduled satellite will deploy a few months later than originally planned. But this shouldn't be any cause for concern, as DirecTV apparently has all the bandwidth it needs to deliver on its promise of at least 100 HD channels by the end of 2007. If anything, we're more likely to be waiting on the creation of new channels rather than the availability of the satellite needed to beam them down to us...
One can only assume that the decision-making process is a just a bit whacked out at Comcast, as the nation's largest cable TV company has announced it is raising subscription fees in some markets as a result of costs associated with adding HD programming. I'm not a highly paid consultant, but I don't believe this is the ideal time to be increasing fees and attributing it to HD programming that doesn't match up with the competition...
In Demand Networks made a curious announcement relating to the launch of two new HD sports channels. The channels, Team HD and Game HD, will be used to carry select games from the National Hockey League, the National Basketball Association and Major League Baseball. That sounds OK, but IDN goes on to say that these two channels "will be compressed along with the existing HD PPV channel, taking up the bandwidth of one HD channel." That doesn't sound very promising...
ESPN has revealed some details about its upcoming ESPNews HD channel, which is scheduled to debut late in the first quarter of 2008. It sounds like ESPN will be doing something similar to what CNBC is doing with its so-called HD+ channel. The main difference is that ESPN will be providing actual HD images that have been sized to fit a reduced size 16x9 window area, with the remainder of the screen taken up by tickers and graphics. This makes perfect sense, particularly since ESPNews is a secondary delivery mechanism -- if someone really wants to see the highlights of a particular game in true, full HD, they can wait until the next edition of SportsCenter rolls around (or DVR it)...
It's hard to disagree that a fine of nearly a quarter of a million dollars for a single parent found guilty of relatively minor copyright infringement seems excessive. But it's probably a bad strategy to base an appeal on that, particularly in view of the fact that offense she was convicted of allows for even a higher "per incident" penalty. And it's not like it's completely unknown for a US juries to defy instructions and go well beyond legal penalties or award levels...
The biggest negative of the Jammie Thomas case is that it was difficult to defend and losing it only seems to have strengthened the record industry's legal resolve. Evidence of that was plentiful this week, as the Recording Industry Association of America turned its legal cannons in the direction of 19 US universities and the business entity Usenet.com...
And in a development that straddles two of the hottest of hot-button topics of the moment -- file-sharing and net neutrality -- an Associated Press investigation claims to have determined that Comcast is filtering traffic related to peer-to-peer file-sharing from its network. It appears this filtering may be motivated more by the need to ensure network efficiency rather than preventing copyright infringement, but in some instances it does appear to impede file-sharing of both the legitimate and illegitimate varieties...
A number of media companies have joined forces to lay out a set of principles designed to protect copyright owners who make content available online. But the practical impact of the group and its stated guidelines seem in doubt, due to the absence of key technology players such as Google and an apparent lack of the technology solutions that would be needed to support their requirements...
You can be sure that it was a relatively slow week when the opening story in the Display Technology section here is about the development of a round LCD display. But now that scientists have cracked that difficult nut, it should be just a matter of time before they create all the insanely shaped "view screens" that have been popping up in science fiction films for the last half century...
Or they could just turn that round LCD screen into a clock and call it a day...
Thomson, maker of the once-popular RCA brand televisions sold in the US, has officially thrown in the towel on the consumer electronic business. Thomson is selling its CE business to Audiovox, which had earlier acquired the RCA brand. Thomson is narrowing its business focus to digital film and video distribution.
OK, I've never seen a sports stadium or arena scoreboard that displayed anything that could even charitably be called high quality images. But that won't stop me from staring at those monsters after a few brews. Oriole Park at Camden Yards is the latest major league ballpark to add a widescreen HD display.
It's easy to forget that business is often conducted in entirely different ways outside the US. I worked abroad for nearly 20 years, and after being back in America for more than a decade, it's something that even I overlook now and then.
But this is one that I should have seen coming -- the Wall Street Journal (Blu-ray vs. HD DVD: A Solution Abroad) reported earlier this week that avid HD disc collectors work their way around the exclusive studio arrangements that the Blu-ray (Sony, MGM, Disney, 20th Century Fox, and Lionsgate.) and HD DVD (Universal, Paramount, Dreamworks, Dimension) groups have organized by seeking out those films in the alternate disc format in non-US markets.
For example, even though Sony is the creator of Blu-ray, some Sony Pictures films can be found on HD DVD, due to the way distribution has been organized for different countries. And better yet, you don't even need a passport, as the alternate-format discs can be bought through online outlets in the country where that format is used.
One warning though: Bring more money...
Click here for Engadget's weekly summary of the Nielsen Videscan market share numbers for Blu-ray and HD DVD.
The long-rumored $399 40GB PlayStation 3 game console will be available in the US market in early November, following confirmation 2 weeks earlier of similar low-end PS3 consoles for markets in Europe, Asia and Australia. However, unlike some of those other markets, a larger 80GB model will continue to be offered in the US, with the added bonus of the price of that model being lowered to $499. While the new low-end model sacrifices compatibility with PS2 games, that compatibility is maintained for the 80GB model...
There's no doubt that Blu-ray's ability to compete with HD DVD has been assisted immensely by the fact that all PS3 game consoles have included a fully functioning Blu-ray player since the PS3 launch. While Microsoft has offered a relatively affordable $150 HD DVD drive add-on for the XBox 360, that hasn't provided the same sort of lift to HD DVD sales. However, rumors are heating up that Microsoft and Toshiba are working to create a new XBox 360 model that will include an integrated HD DVD player. No details yet on pricing or release dates, though such a beast appears unlikely before the second half of 2008...
Finally, picture Q handing Bond a game controller and telling him this is the agency's latest technological marvel. Or flip that over back to front, because Britain's Government Communications Headquarters plans to insert recruitment ads in video games in an attempt to attract "computer savvy, technologically-able, quick-thinking recruits." Since the UK is an important ally, I hope the Engadget reporter was just having a bit of fun when he suggested one of the games to include the ads would be "Tom Clancy's Splinter Cell: Double Agent." Not helpful.
Video Savant 
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