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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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