Been in contact with Josh Bernoff, the resident Forrester HDTV/SDTV "expert" analyst. Forrester holds very heavy weight on the Street, particularly among the fund crowd.
My biggest beef with Josh is that he believes the computer industry has the upper advantage (40 million installation) on digital TV implementation versus the CE industry.
Summarized below is our recent discussion with my points listed why I believed it would be the CE industry who whould dominate in digital TV to the consumer market:
1. practically every CE company will be introducing HDTV sets next year and most will be showing operable models at the CES in January.
2. DBS systems such as DISH will have the ability to deliver HDTV to approximately 7 million subscribers by 1999.
Josh, "Just becuase DISH delivers HDTV doesn't mean anybody has a TV that can show it!"
3. Cable systems will be able to inexpensively adopt cable boxes to convert digital transmissions to analog in order to deliver all the digital feeds to all their subscribers (whether or not they have an HDTV or SDTV set).
Josh: "Inexpensively adapt cable boxes? Not likely. And again, who's got the TV to see it?"
4. Local broadcasters certainly are sitting on the fence but will be forced to broadcast digitally when faced with competition from the DBS and cable systems.
Josh: "Actually, local broadcasters are already forced to broadcast digitally on a schedule set by the FCC. Competition has nothing to do with it. You've got it backwards -- it's competition from broadcast that's moving cable, not the reverse."
Josh is partially right. My read is that HBO, the Discovery group and the Turner group initially and then CBS will be the driving content forces behind the industry's implementation of HDTV. The FCC manadate is only for the four major broadcasting systems to deliver HDTV in 10 major markets by 1999 (forgot the exact date). Market forces should make this mandate meaningless.
5.HDTV gives the national broadcasters and cable sytems like HBO a huge advantage over analog content in terms of grabbing a higher demographicaudience..especially important to the advertisers.
Josh: "I actually make this point in my report. Of course, HBO has no
advertising, so that's a bad example. But this applies only when there are a few people watching."
I especially wonder how he came up with the forcast that only, "3% of homes will have HDTV in 2001, which is when this dynamic begins to apply". That's less than 3 million sets capable of receiving HDTV broadcasts.
My read is that there will be ample supply of HDTV and SDTV sets on the market by next Fall with Zenith being first out of the gate, that DBS companies first will deliver HBO in HDTV quality by next Summer and that the Turner group, PBS, Discovery group and CBS will rapidily provide additional HDTV content by next Fall. This will drive the cable systems and local broadcasters to universally upgrade to digital TV and the "real dynamics" will begin in 1999 (two years earlier than Bernoff's forecast).
Josh's closing remarks, "I look at the big picture. Paradigm shifts are oversimplified ways of looking at a problem that involves multiple industries." Trouble is that Josh isn't seeing the picture too clearly...... |
