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Technology Stocks : Faroudja FDJA

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To: Gerald Thomas who wrote (121)4/16/1998 10:10:00 PM
From: Gerald Thomas  Read Replies (1) of 249
 
TV's great leap forward
Digital TV arrives soon. But don't throw out your old set just yet
Russ Mitchell
3702 Words
23961 Characters
04/20/98
U.S. News & World Report
46-49, 52-54
(Copyright 1998)
Opening day for the Texas Rangers baseball team made television
history this season. A broadcast from the Ballpark in Arlington
beamed astonishingly vivid, crystal-clear TV pictures, far more
detailed than anything ever seen on a regular set--viewers could
even make out the 5 o'clock shadow sported by an on-deck batter. It
was a high-profile introduction for high-definition digital
television, which, after years of delay, is finally due to start
rolling out across America this fall.
By December 1, 26 television stations in such big-city
markets as Detroit, Dallas, Washington, D.C., and San Francisco
will have turned on the switch for digital broadcast. By government
decree, digital TV will be available in 50 percent of U.S.
households by November 1999 and to every home in the country by May
of 2002.
The four major commercial networks plus PBS plan to start
transmitting digital programs in November. ABC hints it will launch
on November 1 with The Wonderful World of Disney. By early next
year, NBC promises the movies Men in Black and Titanic and The
Tonight Show with Jay Leno in HDTV. DirecTV, the 200-channel
satellite broadcaster, says it will relay two channels of
high-definition programs across the nation by year's end.
But will anybody be watching? While the Rangers played the
White Sox, there were exactly two TV sets in all of Texas able to
display the game in high-definition. That's right, two. These
extraordinarily expensive big-screen televisions, lent to a couple
of Circuit City stores in Dallas and Fort Worth, are not yet
available for sale. They won't go on the market until fall--and
then, only people with $7,000 to $12,000 to spare on a new TV will
be able to buy one.
The lack of affordable HDTV sets has the television
industry on edge--and for good reason. If the sets remain beyond
the reach of ordinary consumers, digital TV, breathlessly promoted
as the next great TV revolution, may never take off.
There's strong incentive to make sure it does. The profit
potential for digital television is staggering. If the federal
government honors its schedule and requires broadcasters to turn
off their regular, analog TV transmissions in 2006, it will render
obsolete all of the 250 million TVs in people's homes and offices
today. Those sets will either have to be replaced with a digital
television or be outfitted with a digital converter box that could
cost several hundred dollars.
The replacement market totals at least $125 billion,
according to Bruce Leichtman, a director at the Yankee Group, a
research consulting firm. And his figures don't even count the rich
take from advertising, from programming and cable fees, and from
the systems and applications software that will become increasingly
important as the digital TV evolves into a new kind of computer.
Interference. While digital TV struggles to get off the
ground, scores of big companies, each with conflicting interests,
are entering the field. The broadcasters want better pictures and
new services to continue attracting mass audiences to satisfy their
advertisers. The cable industry cares less about picture quality
than about adding more fee-generating channels using digital
compression. The TV-set makers want to earn big profit margins from
digital TV without causing buyers of regular analog sets to put off
their purchases. And the computer industry, led by Microsoft and
Intel, wants to get its products into the living room by selling
combination PC/TVs and set-top boxes that computerize the
traditional television.
With so many disparate players elbowing their way to best
advantage, the chances of consumers' hearing a consistent,
understandable, objective marketing message to help them make
decisions about digital TV are near zero. Already, the contestants
are squabbling over digital TV formats--and those decisions will
help determine what kind of sets consumers purchase and how
expensive those sets will be. But how will potential buyers react
to obscure, consumer-hostile format names like 480p, 720p, and
1080I? "The big danger here is confusing the customer," says Joseph
Flaherty, senior vice president for technology at CBS. "If they're
confused, they'll just put their money right back into their
pockets."
Further complicating matters, cable companies may not pass
through full-blown high-definition TV shows but instead may
compress the signals, thus degrading the pictures, to save on
channel space. Given that 70 percent of viewers watch network
broadcasts on basic cable, this is no small problem. To get the
high-definition picture, viewers might have to erect rooftop
antennas to capture the signals from the air--and how many people
will want the hassle? Furthermore, the latest versions of cable
set-top boxes, not yet on the market, are incompatible with digital
TV. "I worry about {cable}," says Robert Wright, chief executive of
NBC. "I want to make sure these gatekeepers allow us to do {HDTV}
so we're not queuing up to get access to the audience."
The Federal Communications Commission is considering "must
carry" rules that would force cable operators to pass the networks'
HDTV programs through to customers in undiminished form. But the
agency isn't expected to decide anytime soon. Whatever the
government does, if viewers gravitate to the superior HDTV pictures
provided by satellite TV services and by the broadcasters, the
competition is likely to force cable companies to pump
high-definition to its customers.
Consumers also seem confused about how long they'll be able
to keep watching their old TVs. People are asking, "What is this
about buying a $7,000 TV set and my current set is going to be no
good?" says Martin Franks, senior vice president at CBS. A digital
TV or digital converter box will be necessary to receive the
signals on the new channels. But viewers will be able to keep
watching regular shows on regular channels with regular TVs, if
they so choose--at least until the analog signals are turned off in
2006 by order of the federal government. At that point, to get
over-the-air TV at all, those viewers will have to buy a new
digital TV or a converter box that can receive a digital picture,
albeit a low-quality one. But many broadcasters think this turn-off
timetable will upset so many people that the deadline will slip.
"Washington is going to find out what happens when you mess around
with people's television," says Franks.
The hope is that people will be so blown away by digital TV
that they'll gladly deep-six their old sets. Gary Chapman, CEO at
LIN Television Corp., the owner of the station that aired the
Rangers game, calls digital TV "the biggest change in television
since the creation of television."
It is the high-definition form of digital TV--the amazing
pictures and sound--that is generating the most excitement. When
people see HDTV for the first time, eyes pop and jaws drop. A front
lawn in high-definition isn't a solid mass of green, it's made up
of individual blades of grass. Smoke from a cigarette wafts up not
as a gray smudge but in intricate, curling patterns. When a
quarterback throws a pass, the football's individual seams can be
seen turning as it spirals across the field; when actors and
actresses emote, you can see every line on their faces.
All this is presented on a wide-screen picture tube, more
rectangular than square, an arrangement that accommodates human
vision better than a regular TV does; the eyes are naturally
positioned to favor the horizontal, which is why movie screens are
shaped the way they are.
Sound and vision. The absorbing high-def pictures will be
accompanied by six channels of digital Dolby sound, making it
possible to set up left, right, and center speakers in the front of
the room, two surround-sound speakers in the back, and a subwoofer
under the couch. Bullets and spaceships will be heard whistling
overhead, just like in the movies. A televised concert with music
by Mozart or the Mighty Mighty Bosstones will get your neighbor's
attention for sure.
It's easy to imagine consumers falling in lust with a
supercharged home theater wrapped around high-definition TV--until
they see the price tag. The $7,000-to-$12,000 cost of the set is
just the beginning. A sound system to go along with the great
visuals will cost at least $1,500 for speakers that aren't totally
cheesy and $2,500 for models in the midprice range, says Chas
Silviria, a sales representative at Westlake Audio, a digital audio
equipment maker. "It ups the ante for the consumer," he says.
High-definition proponents argue that HDTV is no more
expensive in real dollars (adjusted for inflation) than color TV
was when it was introduced in the early '50s. There's no question
that prices will fall, as they do for all new consumer
technologies. But it was eight long years before color had
penetrated even 10 percent of the TV market--even though color TV
marketers had a simple, straightforward story to tell about the
product, which certainly is not the case in digital TV.
Right now, the big fight in digital TV is over "formats,"
the different types of signals that will be broadcast and displayed
on digital TV. The TV industry couldn't agree on a single, standard
format. So, with the FCC as quarterback, it punted: At least for
now, makers of digital TVs will sell the sets with decoder chips
that will accept any of the 18 digital formats that broadcasters
are ever likely to transmit.
Each broadcaster has picked the format it feels gives it
the sharpest edge in the emerging digital TV market. Naturally,
each insists that its own format is the one that favors consumers
most.
Formats fall into two basic categories: interlaced scanning
and progressive scanning. Forget for a moment what your mother told
you about getting too close to the TV, and put your nose right up
to the picture tube. You'll see a series of tiny horizontal lines.
Each line is made up of tiny dots called pixels. A little electron
gun inside the TV paints those lines one by one, from top to
bottom, 30 times per second. There are as many as 520 lines on a
regular TV tube (most screens show only 432 lines or fewer) and
together they make up a single TV picture.
Since the first commercial TV broadcasts in the 1940s,
these lines have been delivered via interlaced scanning. An analog
TV channel isn't big enough to accommodate an analog TV picture all
at once. So each picture "frame" is sent in two pieces.
Imagine lifting your left hand, then lifting your right
hand, and then interlacing your fingers together. In a similar way,
the electron gun first paints every odd-numbered line in a picture
from top to bottom, then goes back and paints the even ones, to
interlace a single picture. Each half takes 1/60 of a second--so
fast that to the eye it looks like a single picture. But because
the two halves of an image are trying to match up as one, there is
inevitably some mismatch that reveals itself as flicker or blur. It
messes up the picture a little, but for nearly 50 years there has
been no choice.
Picture perfect. Analog waves can't be made any smaller,
but digital signals can be squeezed tight so that more information
can be packed into the single TV channel. That compression allows
progressive scanning, which, put simply, enables the electron gun
to paint lines on the screen one right after the other, resulting
in one solid, unified picture the first time out.
Modern computer monitors use progressive scanning, which is
one reason words are so much easier to read on a computer than on a
TV. Because there is no need to match up two halves of a picture,
the flicker problem disappears. The Department of Defense has
decreed that all its new visual displays will be progressive. Most
medical imaging displays use progressive scanning, too. But the TV
industry is divided on the question of scanning. Interlace was
included in the standards because, proponents say, 1080I offers a
bridge to the day when computer technology enables progressive
pictures with 1,080 lines or more, which everyone in TV-land agrees
is the ultimate goal. CBS and NBC recently announced that they
would broadcast their high-def programming using interlaced
* scanning. ABC and Fox will use progressive. Microsoft and some of
the cable companies are pushing progressive, too.
NBC and CBS say their HDTV version of interlacing provides
the best picture available now and the quickest opportunity to
convert regular programming into HDTV. "No question, it's the right
way to go," says Scott Sassa, president of NBC television stations.
* ABC and Fox say the progressive picture is better. It's
more compatible, they maintain, with the computerlike interactive
data services that are coming to television, and it's the only
format most compatible with the superthin, flat-panel,
hang-on-the-wall plasma screens that are expected to be the most
popular TV screens of the future. (Or the most desired, anyway. The
current price, just for the screen, is about $15,000.)
The debate is complicated by the confluence of technology
and special-interest congressional politics. Before the House and
Senate agreed in 1996 to provide the second batch of digital
channels to broadcasters at no charge, there were high-volume
protests. Sen. Bob Dole, arguing that an auction of the channels
might fetch billions of dollars, called the proposed giveaway a
form of "corporate welfare." Nonetheless, the channels were
granted--with the understanding (but not the legal requirement)
that they be used at least in part to transmit HDTV. The
broadcasters until recently had been unenthusiastic about having to
pay many millions in conversion costs to offer free HDTV (they
don't see it bringing them new revenues), and the free extra
channels were considered the only way to force them into the
digital future.
With 1080I, NBC and CBS foresee no political problems.
Their format provides twice the line count of regular TV, and no
one disputes that those 1,080 lines create supersharp HDTV. Both
networks have committed to at least five hours of high-def
programming a week in the early stages.
* ABC and Fox say their highest-definition format will be 720
lines in a progressive format. That's fewer lines than 1080I
(today's digital compression technology doesn't allow any higher
line count in progressive scanning), but both networks say the
solid, flicker-free progressive image makes up the difference. The
Advanced Television Systems Committee, the digital TV standard
setter, says 720P makes the grade as HDTV. In fact, some people who
see the two formats side by side can't tell the difference.
If that's all there were to it, there would be no
* controversy. But HDTV proponents are concerned that ABC and Fox, in
league with Microsoft and cable's Tele-Communications Inc., are
using 720P as a stalking horse for the format they really prefer,
480P. Its line count is about the same as regular TV, although the
digitaignal and the progressive scanning offer a much better
picture than today's analog broadcasts. On a smaller screen, 27
inches or less, it is difficult for many people to notice the
difference between 480P and higher-definition television. People
who have seen comparisons on large-screen TVs, however, say the
viewing quality of 480p is clearly inferior to both 720P and 1080I.
The 480P proponents argue, in the words of Andy Setos, a
* senior vice president at Fox, that the lower-line format
"democratizes" digital television, because the smaller-screen
480P-only sets would be a lot cheaper, encouraging a faster
rollout. "To a lot of people," notes Michael Conte, digital TV
group manager at Microsoft, the price tag of basic HDTV is "kind of
a nice car, not a nice TV."
He has a point. It's also true that 480P is cheaper for
broadcasters: It's relatively easy to convert anything shot on
35-mm film--80 percent of prime-time programming and nearly all
movies--to HDTV, but it's more difficult and expensive to shoot
original TV video in high-definition; and the higher the
resolution, the more expensive the production costs. It's true that
480P makes it easier for the computer industry to sell PCs as
televisions: Microsoft could package its Web TV set-top box with a
cheap TV monitor and sell it as a data-ready digital TV. (The 1080I
interlaced signal would make a PC/TV freeze up without equipment
that would add $150 or more to the price. Adding that to the $300
price tag of Web TV would surely put a brake on sales growth.) And
it's true that TCI boss John Malone's technologically challenged
cable systems would handle a lot more channels with 480P than they
would with the other formats.
There is also a little secret that the broadcasters don't
discuss much: Despite big plans for HDTV, all the broadcast
networks--including NBC and CBS--intend to air the bulk of their
digital programming in 480P. That means a big, fancy HDTV set will
be receiving lower-grade 480P pictures through most of the day.
Besides being cheaper, 480P will allow broadcasters to add new
channels. Instead of sucking up bandwidth to put great pictures on
big screens, 480P's lower resolution allows the broadcasters to
deliver several different programs down a single channel at one
time.
Nonstop "Seinfeld." Broadcasters could use their
"multichannel" expansion to send data, repeat popular programs, or
offer pay-per-view movies. (The FCC is considering a "spectrum tax"
if broadcasters choose to make consumers pay fees, but nothing has
been proposed thus far.) With 480P multichannel, a local
broadcaster could show high-school football games with local
advertising, or post traffic cams at various rush-hour choke
points. If it could work out the syndication fees, a station could
offer one channel of All Seinfeld, All the Time.
Whether that's good for consumers or not, favoring
multichannel over HDTV doesn't square with the vision that was
drawn for Congress when it granted the free channels. Right now,
network executives are pooh-poohing the multichannel idea, saying
it doesn't make business sense. But the very subjects of
broadcasting formats and multichannels are political dynamite.
When ABC Television Network President Preston Padden
announced last year that the network might start off with a format
no higher than 480P, politicians went ballistic and threatened to
terminate the entire free-spectrum deal. Now Padden is toeing the
HDTV line. "It's very clear that Congress wants us to do 'real'
HDTV, and 720P is the realest HDTV there is," he says. But ABC has
not said how much or how little 720P programming it will offer
compared with its 480P schedule.
* Fox will say only that it will use 720P for experiments
with special events. In a meeting at the National Association of
* Broadcasters convention in Las Vegas last week, Fox Television
Network President Larry Jacobson was pressed to detail the
network's plans for 720P:
Do you have any specific plans for 720P you'd like to
discuss?
"No."
What special events will you show? Will you do regular
shows in 720P?
"We don't know."
Are you committing like CBS and NBC to a minimum number of
hours of HDTV programming?
"We have no plans right now to announce a quantity."
Did politics play a role in your decision to even include
some amount of 720P?
"The politics are certainly a factor."
Upholding standards. HDTV or not, the federal government
will have a strong incentive to move Americans to digital TV.
Congress and President Clinton have already counted on billions of
dollars in spectrum sales for the spare channels as part of their
"balanced budget" package. If not enough viewers switch to digital
by 2006, the budget-balancing billions won't be available for
several more years. Meanwhile, HDTV proponents, including those who
worked for many years to create the HDTV standards, don't want
Congress to let up on HDTV. Some consider this position elitist,
given the high prices. But proponents fear the whole 480P populist
debate will further confuse consumers. They also fret that if 480P
sets do well in the marketplace and the politicians back off,
broadcasters will no longer have an incentive to provide super HDTV.
Former FCC Chairman Richard E. Wiley, widely credited with
bringing a fractious group of TV competitors together to create the
set of HDTV standards that brought the technology from conception
to reality, says, "I want Americans to have the best. Twenty years
from now, will someone look back and say, 'Did we give the best a
chance, or did we sell out to a more limited system?' "
In the end, businesses have the right to make what they
think the consumer will buy. Consumers have the right to spend as
much or as little as they choose for the latest new gadget. And
they have the right to wait out the new TV revolution until they're
sure it's going to be worth their money.

The dawn of digital
The long-awaited arrival this fall of digital television will
offer viewers enhanced clarity on their TV screens. But
broadcasters are still searching for clarity in how to present it.

How will digital TV affect me?
Fall 1998. Digital broadcasts will be available in 10 U.S.
cities and nationwide to many satellite subscribers.
November 1999. Fifty percent of U.S. households will have access
to digital TV broadcasts.
May 2002. All U.S. households will have access to digital TV
broadcasts.
2006. Broadcasters will stop analog transmissions. Consumers
will have to buy a new digital TV or digital converter boxes for
their old TVs.

Analog signals are sent via radio waves to a TV's receiver and
then converted into images.
Analog television. Standard TV is low definition because analog
signals carry a limited amount of information.

Digital's compressibility enables it to carry enormous amounts
of information.
Digital high-definition television. HDTV has dramatically better
picture resolution because the screen is wider, has more lines, and
better color.

Digital signals can be used for one high-definition or up to
four lower-definition programs, or a combination of low-definition
programs and data services.
Digital multichannel television. When not showing
high-definition programs, broadcasters can split the digital signal
and give viewers a choice of lower-definition programming.

Creating the image
Analog TVs require interlaced scanning. Digital TV receivers can
use interlaced or progressive.
Interlaced scanning. The signal is sent in two sets of
alternating lines to create one picture frame
Progressive scanning. The entire signal is sent in one pass,
reducing flicker and improving resolution.

I0607 * End of document.
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