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By Evelyn
Messinger, Robert Eisert and Heather
Hurford
The communications infrastructure
has always been a Tower of Babel, each medium a
language more-or-less incomprehensible to other
media. But now television, telephony and cyberspace
are being translated into a single digital tongue.
It's still too early to know exactly which of these
media will emerge as triumphant or how the hardware
will evolve. One sure thing is that there are billions
at stake, and the battle will be fiercely waged.
Here are the combatants as of February 1998.
Broadcasting
Broadcasters received a tremendous windfall last year when
the FCC gave each channel a second frequency, so they could transition smoothly
to digital. The new channels are on loan until 2006, but many think that broadcasters
will find a way to hold onto both frequencies.
One would expect station executives
attending the National Association of Television
Program Executives (NATPE) convention in mid-January
to be overjoyed about their future prospects, but
they didn't appear to be. A panel titled "Broadcasting
Bonanza" asked them, "What Will You Do
With All Those New Channels?" Surprisingly,
the panel discussion was fraught with defensive
declarations of the superiority of broadcast over
other media. The points below are paraphrased from
the panel:
--
Broadcasters were advised to stop saying HDTV
(high definition television) by
dropping the H, and calling it just DTV, referring to digital television.
-- "I can envision a How-To Channel
from the Home Depot."
-- "We think leasing new frequency
to paging companies and the like is
an interesting prospect."
-- "But do television stations want to become common carriers --
just another AT&T?"
-- "Would the FCC allow us to just lease the frequencies?" (The
regulations as currently written allow broadcasters to lease these frequencies
after paying a fee.)
-- The broadcasters were eyeing the $100 billion spent each year on print
advertising as possible new income when they can offer viewers interactive
classified ads.
-- One broadcaster speaking at the
convention said, "More channels
may not give viewers a better choice, but may give advertisers a greater
choice." He was thinking of 'time-shifting,' multiple airings of
the same show at different times, presumably at one low rate to the advertiser.
-- Some Bonanza speakers predicted a 'big pipe' into the home (lots of
information to the viewer) and a 'small pipe' out (very little reply
capabilities), revealing their misunderstanding of the value of true
two-way interaction. The small pipe, as broadcasters see it, only needs
to be big enough to carry two things: orders to purchase products, and
lucrative marketing data from consumers. Recognizing a threat to their
accustomed top-dog position with advertisers, the broadcasters coveted
the Internet's effortless ability to channel consumer information to
advertisers. |
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~~~~~
In a private conversation, one major-market
News Director posed an interesting theory correlating
new media and bad television: owners of television
stations today secretly have given up fighting for
their future, assuming that cable and other media
will eventually whittle broadcast audiences to an
unprofitable shadow. Therefore they are squeezing
budgets for all they're worth now, junking the future
value of their properties because they don't think
they will be worth much anyway.
As its rivals gear up for fully
interactive, fully merged media, broadcasters would
rather keep you passively watching than let you
surf off into the Internet, perhaps never to return.
They are, it appears, trying to sell an ersatz
Internet experience. At the NATPE convention, an
industry-financed company called Datacast demonstrated
a new interactive system that will allow viewers
to access, on their home computers, Internet-like
information about the television program they are
watching. However, the system will provide no direct
access to the Internet itself. Adding insult to
injury, a user who selects an offered topic on
the web-like page has to watch a pre-recorded commercial
before getting the desired information.
The system is technically clever.
It resembles the Internet's push technology, which
sends pre-selected material to users, rather than
waiting for them to search for it. Datacast's imagery
is transmitted as part of the TV signal, directly
to an antenna affixed to the home PC. The broadcaster
sends this digital information imbedded in a tiny
chunk of video that the television set can't 'see,'
called the sideband. There are similar systems
that tuck the 1's and 0's into the vertical blanking
interval (VBI), which already contains closed captioning
information. The sideband is bigger -- it carries
six gigabytes of information, roughly equivalent
to 100 minutes of standard quality video.
The transmitted material arrives
quickly, unlike the Internet which is becoming
increasingly congested as more and more users log
on. Datacast foresees all kinds of advertisers,
including webcasters, buying time to push their
pages to consumers who will, presumably, be checking
out information about their favorite shows. The
kind of content that will persuade computer owners
to swallow all this additional advertising is not
at all clear.
~~~~~
Meanwhile, PBS is wondering how to develop its own bonanza
of additional channel capacity. Some of the ideas, with commentary:
Niche national channels (children, nature, documentaries, etc.) are the current
buzz. Many of these would pit PBS against those cable competitors that have
stolen its thunder in recent years: Discovery, A&E, Nickelodeon. On the
face of it this may look like a good idea, but the fact that others have fragmented
the PBS market should perhaps be a disincentive to fragment it even more. Alternatively,
a national channel with a whole new focus, like all-live, all-international
or all-interactive could make audiences cohere rather then splinter.
More local channels could add
something useful and unique and fit well into PBS's
community service mission -- but how to pay for
them? There is talk of leasing the new channel
capacity to other users to bring in much-needed
income. This is a good idea but may overestimate
the amount of revenue, since there will be a surfeit
of channels and commercial broadcasters are looking
at the same income source. Historically, PBS has
been blocked whenever it has threatened commercial
television.
In any case, the more channels
for sale, the less each is worth. In the end, a
combined strategy may work best: Interesting and
unique national channels, community-oriented local
channels, and leased capacity to help foot the
bills.
Cable
Cable has begun to invest in cable modems, which let users
access the Internet more than 60 times faster than common telephone lines.
They are leased for around $40 per month, roughly twice the current standard
cost of Internet service. But the companies must invest in upgrading their
cables, and they project that only 20% of US cable systems will be modem-ready
by 1999.
Cable companies plan to offer
two-way, fully Internet compatible set-top boxes,
in theory before year's end. Although an earlier
interactive cable design was tried but failed to
catch on several years ago, broadcasting is now
going digital and the cable companies feel newly
inspired to provide digital services to their customers,
too. TCI Cable has ordered something in the neighborhood
of 14 million such boxes. The boxes will first
be available for lease, and since they use industry-wide
'open architecture' standards, they will eventually
be sold at retail outlets like Radio Shack.
In all likelihood digital cable
will closely resemble today's WebTV, the most advanced
so-called convergence technology, which offers
the Internet to television viewers. Armed with
Microsoft's recent $425 million investment, and
using spiffy picture-in-picture technology, WebTV
shrinks the TV show and surrounds it with a web
page; the viewer is alerted to the Internet link
by a 'click now' icon that appears on the TV image.
The WebTV box is on the shelves now for around
$400 fully loaded.
These digital cable boxes are
currently the focus of intense maneuvering by the
software providers (predominantly Microsoft and
Sun). And as of this writing, the degree and form
of the FCC intervention in cable technology is
still unknown. Crucial issues like whether cable
must carry High Definition Television (HDTV) signals,
whether some of the many new broadcast channels
will or will not appear on the cable, and even
the degree of compatibility between the set-top
and the desk-top, are still to be sorted out.
Internet
The crystal ball is still murky but one thing is clear: channel
surfing and web surfing are merging to become linked forms of at-home entertainment.
There are altogether about 40 products scheduled to hit the market this year
that combine access to the web and the television on one screen. A survey commissioned
by television stations that run web sites shows that people are increasingly
setting up their new home computers near the TV set, and bouncing from a television
show to its web site, where they learn more about the subject matter or enter
chat rooms with the program's stars or fans. When CNN covered an air crash
last year, for example, the entire passenger list couldn't be read on the air.
The anchor announced that the list was available on the CNN web site and subsequent
user 'hits' at the site increased dramatically.
The web/television merger's biggest
problem isn't technical -- it's that people watch
TV from five to eight feet away, but they read
info on their computers at one to two feet from
the screen. There are those in the industry consciously
building TV-like web sites that can be easily viewed
from a distance. In the end, however, the industry
may opt to continue with a near (maybe hand-held)
screen, and a far viewing screen. When TV is fully
digitized by 2006, the distinction could become
irrelevant: you will watch and access data on digital
screens, all of which will display clear images
and might offer two-way interactions.
~~~~~
The broadcast and cable industries have uneasily coexisted
for over 15 years. Broadcasters have stood by and watched helplessly as cable
slowly eroded their share of the viewing audience. Now comes satellite TV,
which was born digital, and the Internet creeping up on them all. Perhaps broadcasters
are correct to assume its the end game for them.
But broadcasting may simply be
victimized by its own success. Spoiled by 40% profit
rates, the industry so far refuses to reinvent
itself to survive. Broadcasters miss the message:
if they fail to adapt broadcasting itself will
not disappear, but someone else will control it.
Whatever happens, we can be sure that the coming
battles over rules, profits and content will be
worth watching, and at least as entertaining as
the entertainments they will offer us.
Works Cited
1. Barthold, Jim. "TCI Sets OpenCable Place With Sun, Microsoft." January
19, 1998.
Accessible: http://www.mediacentral.com
Accessed 23 Jan. 1998.
2. Caruso, Denise. "WebTV is Microsoft's Linchpin in its Drive For the
Interactive Media Market." New York Times, Digital Commerce, 17 Nov. 1997,
natl. ed.: C5.
3. Davis, Andrew W. "Cable Modems: A High-Bandwidth Solution to Internet
Access." Desktop Video Communications, January/February 1998: 7 - 12
4. O'Malley, Sharon. "Adding News Without Adding Headaches." RTNDA
Communicator, December, 1997: 26 - 31.
5. Paulson Daily, Linda. "Data Broadcasting Taps the VBI Pipe." SmartTV
FOR SELECTIVE AND INTERACTIVE VIEWERS, Spring Issue 1998: 14.
6. PBSonline. "PBS and DTV."
Accessible: http://www.pbs.org
Accessed 26 Jan. 1998.
7. PR Newswire. "WorldGate Communications to Offer Service Globally; Agreements
Reached With Operators that Serve 3.5 Million Households." December 12,
1997.
Accessible: http://www.newspage.com
Accessed 12 Dec. 1997.
8. Schiesel, Beth. "Three Giants Of PC World Turn Focus To Speed." New
York Times, 26 Jan. 1998, natl. ed.: C1.
9. Telecommunications Reports International, Inc. "Video Competition Report." December
15, 1997.
Accessible: http://www.tr.com
Accessed 16 Dec. 1998.
10. York, Matthew. "Internet Prime Time." SmartTV FOR SELECTIVE AND
INTERACTIVE VIEWERS. Spring Issue 1998: 9-10.
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