IBC Daily News - September 1997

Digital Television is Finally Here – Now What?
by Sheldon Liebman

Earlier this year, HDTV and Digital Television in the United States became a reality. At least that’s what we would like to believe. In fact, the digital television "standard" handed down earlier this year by the Federal Communications Commission provided multiple definitions of what is considered to be digital television along with a multi-year timeframe for implementing these formats.

After many years of discussion, the end result is a mixture of old and new with loopholes bigger than the Chunnel connecting England and France. The latest loophole was signed into law only last month by United States President Bill Clinton. As part of the recent budget agreement and tax cut legislation, an amendment was attached that effectively eliminates the "firm" timetable by which broadcasters have to switch to digital television. In effect, this amendment says that broadcasters don’t have to move away from analog broadcasting as long as 5% or more of the audience they serve cannot receive the new digital signals.

Like the standards themselves, this is ambiguous enough to effectively eliminate any pressure that might be felt by broadcasters to move to digital. How exactly will this 5% number be measured? Is it a function of the number of television sets? The number of households? The number of people watching television? Or is it something else entirely?

In the United States, 98% of household have televisions, with most having more than one. Today, TVs are an easily affordable commodity. Recent advertisements offer 27" stereo sets with picture-in-picture capability for under $300US. The best estimates for high resolution digital televisions puts the price tag on these newer receivers at anywhere from $2000-5000, which is certainly not affordable for many households. And even if people decide to go and purchase one for their homes, what about the other sets they have? Also, what about all the devices that are currently connected to their televisions, including VCRs, DVD players, and video games? Given these considerations, it’s highly unlikely that many households will decide to replace all of their televisions with new, digital models at one time.

Clearly, the U.S. viewing audience is a long way from shifting to digital television of any kind, let alone HDTV, which is one part of the new standard. Until, of course, the prices come down significantly. Lots of market research has been done comparing the current NTSC standard with various forms of advanced digital television. What’s interesting about these studies is that they don’t show a compelling need to provide a full HDTV resolution and format signal for viewers to believe they are getting a better image.

In study after study, a majority of people are just as impressed with NTSC at a 16:9 aspect ratio as they are with HDTV. Those that express a strong preference for "real" HDTV don’t want to pay the price for it. Usually, these people project that it would be worth purchasing a new set for the enhanced HDTV signal if that set costs less than $500.

Given the many questions still to be answered about digital television, it isn’t surprising that the response by broadcasters has been lukewarm at best. One critical issue was whether current broadcasters would have to pay for the additional channels they need to begin broadcasting digital television signals. The broadcast industry lobbied long and hard against having to pay any fees for this and eventually won.

Converting a television from analog to digital broadcasting is estimated to cost from $750,000US to almost $1.5 million. This is just the cost of purchasing and converting equipment. It doesn’t take into account increased operating expenses associated with broadcasting two formats or the additional investments that must be made in sets, audio, lighting and a full range of ancillary services. Why will these other investments be necessary? Given the lower resolution of NTSC, you can still mount a production using uneven lighting or poor makeup. At full HDTV resolution, however, viewers will be able to see chipped paint on a wall in the background or subtle shadows that are now virtually invisible.

Unfortunately, nobody has been able to quantify what this higher resolution will create in terms of increased revenues. Advertising rates are based on viewer demographics, not image quality. Obviously, digital television will result in new services being offered, and these services will generate additional revenues, but simply broadcasting in a high-resolution format might not have any impact on revenues at all!

What we have is a set of new digital television formats that require tremendous investment without any guarantee of payback on that investment. It’s no surprise, then, that the responses to digital television standards have been all over the place.

In the mid-1980s, I was responsible for sales and marketing at Lyon Lamb Video Animation Systems (now The VAS Group) in Burbank, CA. Lyon Lamb received an Oscar for their animation controller technology allowing videotape to be used for recording single frames of animation. Lyon Lamb was also the first U.S. company to develop and market a high-resolution scan converter. When the original discussions of HDTV took place in the 80s, Bruce Lyon, President and Founder of Lyon Lamb, had a very simple solution – place a scan converter in every television station.

This would allow a facility to broadcast in high resolution while easily creating a simultaneous, NTSC-resolution copy of the material. Of course, at $30,000US per scan converter for a HD capable version of Lyon Lamb’s RTC, this would have generated a tremendous amount of revenue for Lyon Lamb.

A few years later, Chromatek Scan Process, Inc. in Los Angeles began selling a product that could go both ways. The Chromatek 9135 offered the ability to upconvert NTSC into HDTV as well as to downconvert HDTV into NTSC. With the 9135, broadcasters could have their choice of broadcasting a HD copy of their NTSC source OR an NTSC copy of their HD source. Unfortunately, since the standards were in flux, Chromatek never had the opportunity to provide this seemingly elegant solution.

Now that the standards do exist, however, variations on these themes have started to be developed. Fox Television has announced plans to provide enhanced, digital television signals through the use of line-doubled NTSC. Using high-end technology from Faroudja Laboratories in Northern California, Fox will be able to continue producing material at NTSC resolution while starting to transmit high-resolution digital television signals. The FCC has already indicated that this approach will meet their requirements for the transition period from analog to digital television.

The beauty of the Fox approach is that it requires the smallest possible investment in equipment and facilities. Everything remains as NTSC until the last possible moment, at which time it’s split into two signals. One of those signals continues to be broadcast using current analog technology and the other is channeled through a Faroudja line doubler to a digital transmission system.

The opposite approach is being taken by CBS. This broadcaster seems to be taking the attitude that the only way people will move to HDTV is if there is a reservoir of content. To that end, CBS is investing a tremendous amount of capital to create a HDTV production and broadcasting facility in New York City. Once their HDTV center is up and running, it is reasonable to expect that CBS can create 3-5 hours per day of high resolution content, which is sure to include their soap operas, news broadcasts and prime time lineup. The question is, when does that investment start to pay off? Having HDTV format material is great, but there must be critical mass developed on the receiving end for anyone to see it.

Once critical mass is achieved, CBS may be in the best position to take advantage of that, since they will already have a lot of content in HD format. If it takes another 10-15 years to reach that point, which is not beyond the realm of possibility, one can’t help but wonder if CBS (or any broadcaster) will be able to survive that long waiting for the payoff to occur.

Yet another approach is being tried at Warner Brothers. Virtually everything that is created today, whether feature films for distribution to theaters or situation comedies for broadcast, is created on 35mm film. The great thing about film is that it already contains the highest resolution and proper aspect ratio to be converted to any other format used today, including the new digital television standards.

Video, on the other hand, especially digital video, has been subjected to a variety of technologies already and is almost certain to continue evolving. If source material was converted to JPEG a few years ago, it may already be unusable. MPEG, which seemed to hold more promise, has been surpassed by MPEG-2. Certainly, we are far from the end of the technological cycle. But a 35mm print, carefully stored, can be converted into any format that exists today and is likely to be convertible into anything new that’s developed.

For this reason, Warner has entered into a partnership with IBM to develop a resolution independent telecine system that will effectively act as a universal translator between 35mm film and any digital format that currently exists or is developed. The result will be a "digital pump," capable of dispensing material in any format desired, with a price structure based on the format delivered as well as the use of the material.

Warner already provides this service today by converting movies to videotape and editing the content for things like running time and the need for commercial breaks. The new system simply takes this to the next level. If, for example, someone wanted to play a feature length motion picture over the Internet at low resolution, this system would be able to handle it. At the other end of the spectrum, it could easily convert that same movie into a digital HDTV format for broadcast by a major network.

Once a movie or television show is converted to a digital format, what happens to it? It’s easy to oversimplify the situation and say that once it has been broadcast, it is just deleted, never to be seen, heard or used again. However, if Warner Brothers has taken the time to convert a movie to HDTV, and if there is a market for other stations or broadcasters to purchase the rights to that same movie, it would certainly be easier if the digital copy was still around. Some method for archiving the "digital master" seems to be needed.

The same is true of the material that will be created by CBS from their new facility. Doing the math, however, results in an incredibly high number. Currently, uncompressed digital video requires approximately 30 MegaBytes of storage space per second, or 108 GigaBytes per hour. At HDTV resolution, you can multiply that number by approximately 4 times, resulting in almost a one half a TeraByte per hour of programming. If multiple hours of material are created each day, the storage requirements for all this material will be immense.

One company has looked at this situation and turned it into an opportunity. Roy Speer, one of the founders of the Home Shopping Network, has invested more than $100 million US in creating a digital archive in Nashville, Tennessee with plans to open additional facilities around the world.

Currently, Speer Communications has 600 TeraBytes of near-line storage in Tennessee with the ability to triple that. Another facility in the United States and one in Europe are planned, each with at least the same capacity for storing digital video information. None of these "digital vaults" will be located in broadcast centers.

Just as a "virtual company" can be located just about anywhere with access to phone, fax, and Email, these archives can be located anywhere with access to fast networks and satellites. And Speer has definitely taken care of that. There are two high-speed fibre gateways into the facility, 18 C-band and KU-band earthstations and a tremendous number of microwave antennae. Much of the technology for transmitting this information is based on digital technology developed by Speer. The most impressive, perhaps, is a digital modification that has boosted the VSAT data transmission rate by 3000 times.

The hardest part for Speer, of course, is convincing companies that it’s okay to store their material off-site at all. But once you do, it doesn’t really matter if you’re down the street, across the river, or on the other side of the world. As long as there’s access to the material, it might as well be in the next room.

Digital television in the United States is just getting started, and the one thing that is certain is that there really isn’t much that’s set in stone at this point. As evidenced by the companies mentioned here, there are many approaches possible and there will almost certainly be at least one company that tries each approach. In the end, though, the transition will take place. It will be interesting to watch it develop over the next 10 years. Or is that 20?

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