FYI:
General info on the sector from Iconocast.
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I C O N O C A S T b y M i c h a e l T c h o n g
"More concentrated than the leading brand"
Made possible in part by Business 2.0
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++++++++++++++++++++++++ 28-Oct-99 +++++++++++++++++++++++++
___________________________________________M a c r o v i e w
Digital TV
********** By David Batstone
Now that the first HDTVs (high definition televisions) have
been on the market for one year, some analysts believe that
entertainment technology has reached a plateau. They argue
that future improvements will be incremental at best, if
not "agonizingly slow" as described in last week's issue
of Business Week. They couldn't be more wrong.
The base of digital TV users will increase dramatically as
prices drop. Today, a fully functional DTV setup can be
purchased for a minimum of $5000-$7000. Not coincidentally,
that's about the same price (adjusted for inflation) that a
color TV cost in the early '60s. Just as sales of color TVs
did not accelerate until prices dropped to $500, DTV sales
will not leap until sets are available for $2500 or less.
To get a sense of the timing of these innovations, I spoke
with PlanetWeb CEO Kamran Elahian, which makes browsers for
Sega and the Zilog Internet-enabled box. "While it usually
takes 5 to 10 years for acceptance of new consumer-
electronics categories, like set-top boxes, Web capability
in a TV set will move very quickly because it lets consumers
combine separate entertainment activities and save a great
deal of hassle and time," Kamran said.
That makes sense. DTV is more than a pretty picture. It's an
all-digital technology from camera to receiver, a bitstream
that's more at home in a PC signal chain (such as the Net)
than in a traditional TV broadcast chain. In ways big and
small, the home theater and computer worlds will join, with
TV/PC hybrids, and Internet-delivered TV shows. Why do you
think Microsoft purchased WebTV for $425 million and
subsequently made a $1 billion investment in Comcast?
A February 1999 study conducted by The Yankee Group found
that U.S. households equipped with PCs are more likely to
spend money on cable TV, pay-per-view and Direct Broadcast
Satellite (DBS) than the public overall. James Penhune,
manager of the Yankee study, says that this spells more bad
news for traditional broadcast channels: "As more homes add
personal computers and turn to the Internet for news,
information and other content, TV broadcasters will be the
first to feel the effects of this competition for the
viewing audience, since they rely entirely on ad revenue
rather than subscription fees commanded by cable operators."
DTV's expanding bandwidth will firmly establish PCs in the
living room. Entirely new entertainment technologies will
become possible. While much of today's Net entertainment is
creative but necessarily crude because of bandwidth
limitations, tomorrow's program offerings will flourish.
People who now chat on the Internet now see crude avatars of
each other mouthing balloon text. With a higher bandwidth
and Web cams, these chat rooms will become incredibly
realistic, with a room full of chatters seeing each other
over live video.
Similarly, free of current limitations, graphics-based
virtual worlds will invite users to take virtual tours, meet
virtual friends and play virtual games. This migration will
spur development of video and audio devices that capture and
convey environments that are essentially indistinguishable
from reality.
The Internet thus will create an explosion of channels, both
professional and amateur. Whereas television content is now
mainly comprised of carefully orchestrated shows, Web cams
show cinema verite carved right out of the private lives of
real people. The very nature of entertainment, and the fine
line separating audience members from voyeurs, will vanish.
Bottom line: You'll need a very powerful search engine just
to see what's on TV. |
