THE FRONT LINE
Maybe HDTV Wasn’t “The Next Big Thing,” After All…
In a few short weeks, “D-Day, Take II” will arrive on June 12. And that day will see the final chapter, the closing credits, the obituary finally written for over 60 years of analog television broadcasting in the United States.
It’s been a long and rocky road to get here, one which included three different dates for the analog TV shutdown, a government-subsidized converter box program that was plagued with missteps, an outright refusal by at least one TV network to adopt HDTV broadcasts (they later succumbed to peer pressure), a not-ready-for-prime-time DTV broadcast system that was eventually debugged, and endless Congressional hearings, posturing, and political theater.
Back in 1997 when this all started, awareness of digital TV was low among the general public. The DVD video format was just getting off the ground, with expensive players and movie titles. Not many homes had an Internet connection, and those that did were mostly relying on dial-up service from companies like America Online (AOL).
Broadcast TV, although losing more viewers each year to cable and nascent direct broadcast satellite services, still ruled the TV ratings roost. A strong prime-time show like ER or Seinfeld would routinely attract upwards of 20 million viewers. Local TV stations were “rolling in the dough” from automobile, pharmaceutical, and financial services advertising.
It was a big deal to own a flat screen TV, most of which used picture tubes. 42-inch plasma monitors with 480p resolution cost upwards of $10,000, and 50-inch sets retailed in the $20,000 to $30,000 range. A home theater projector inevitably used CRTs, weighed a ton, and required extensive calibration. Laser disc players and VHS decks feeding line doublers were still the heart of many home theaters — TiVo was just starting to deliver 14-hour hard drive recorders for analog TV.
Of all the drivers to adopt digital television, HDTV seemed the most compelling. In demos around the country (the Harris road show, WHD in Washington), people flocked to see high definition video images. The promise of improved audio quality and multi-channel sound added to the momentum. Indeed, more than one member of Congress mistakenly assumed the digital transition was a transition to 24/7 HDTV!
Twelve years later, the television landscape has changed completely. HDTV has gone from science fiction to “no big deal.” Every major broadcast and cable TV network incorporates HDTV programming into its lineup, and you know it’s become mainstream when shows like Wheel of Fortune, Jeopardy, and your local newscasts are carried in HD.
But economics and changing audience tastes are taking their toll on the TV business, not to mention seismic changes in technology. Internet-delivered video, DVRs, the collapse of the auto industry and TV advertising budgets, and shrinking audiences are putting tremendous pressure on traditional broadcast networks to stay afloat.
Today, a typical prime-time TV audience might number between six to eight million homes, with shows like CSI, Grey’s Anatomy, and American Idol punching into the low double figures (even Idol is seeing a drop-off in viewers!). The premiere of Lost in September of 2004 cost over $2 million to produce, a sum of money TV networks would be loath to spend on a prime time drama in September of 2009.
Ironically, Lost is currently the most time-shifted TV show. And time shifting, with it’s attendant skipping of commercials, is what’s giving broadcast TV networks the willies these days. In addition, the overnight success of YouTube and sharing of video files over the Internet has resulted in networks trying to grab back audiences with Web video sites of their own, such as Hulu (which now numbers Fox, NBC, and Disney among its owners).
The other thing no one could have foreseen was the rapid penetration of high-speed Internet connections, or broadband. A pipe dream back in 1997, it’s now de rigueur for more and more homes. And with faster Internet connections comes the ability to download and not only time-shift, but also place-shift larger files — including episodes of TV shows and movies, both in high definition.
No that long ago, TV manufacturers were talking about and equipping TVs with CableCARD connections, so viewers could get rid of the cable box. Today? CableCARD sets are largely history, and even the new Tru2way interactive cable standard is being met with indifference.
Instead, manufacturers like LG, Samsung, and Sony are increasing shipments of Ethernet-equipped TVs. LAN connections are cheap to install and give the user instant access to online video content from not only YouTube, but specialty sites like Pandora and USA Today, and download/streaming video from Amazon and Netflix as well. These connections are also showing up on TiVo and new Blu-ray players from LG and Samsung.
The impact of direct downloads is unclear at present. Some pundits have forecast the demise of traditional cable TV channel tiers, as customers drop cable TV service and use broadband instead to download the shows they want to watch. Others point out that, in a down economy, a combination of free, over-the-air HDTV and video delivered via broadband is a very affordable solution to spiraling cable TV charges.
It’s pretty clear now that while HDTV was the big market driver in 1997, it’s not any longer. Time-shifting has become the “next big thing,” and place-shifting is following in its wake. There’s no better example of this change in thinking than the Blu-ray format, which was too expensive when introduced a few years ago, and was also largely met with indifference.
Now, Blu-ray players are evolving into media centers as they should be, just as they already have in Japan where the typical BD player has a built-in hard drive recorder, RF and Ethernet connections, and employs a write/read (BD-R) drive. Before long, you’ll see more new models on this side of the ocean with LAN and wireless Internet connections and increased on-board memory for not just BD-Live applications, but for streaming and downloads, too. (And maybe hard drives, if we get lucky!)
The digital TV transition is almost history. Where the TV industry goes from here is hard to say, but it’s clear that Internet connections will be an increasingly important part of future TV viewing. As for HDTV, it’s become mainstream — people expect it, and content providers deliver it. It’s just no big deal anymore.
The question we should all be pondering is whether broadcast television can survive for much longer. Will Mobile DTV be its savior, or its replacement? Will networks like CBS and ABC continue to own and operate TV stations in major markets, or will they exit the station business entirely and simply focus on content distribution going forward? Will Amazon and Netflix ultimately become more important players in content distribution than NBC and Fox?
Stay tuned (or time-shifted, or place-shifted)…
