Divicom supplies BDB.
Jun 2, 1998 (INTERSPACE, No. 643) -- As BSkyB prepares for its
digital soft launch next month, electronics companies and consumer
groups are increasingly anxious that Sky and terrestrial competitor
British Digital Broadcasting are about to embark on a platform war
marked by consumer confusion and resistance to uptake of digital
services.
As it is increasingly clear that the digital satellite and digital
terrestrial boxes that will trickle into the market will have only
limited interoperability potential, many pundits have argued that the
only way to avoid a devastating rejection by the consumer is to make
integrated TV sets available as soon as possible. TV rental shops are
already seizing on consumer hesitation and encouraging future- proof
rental upgrade plans.
Interspace has learned that BSkyB is talking to TV-set manufacturers
about supplying integrated digital TV sets by this Christmas. The Sky
sets would be capable of receiving free-to-air digital terrestrial
transmissions and be pre-configured for Sky's 200+ channel digital
bouquets. The strategy seems designed to appeal to some of the
end-of-year set buyers (4 million TV sets annually are sold in the UK),
who do not want their living rooms cluttered with set-top boxes and
unnecessary wiring.
BDB has apparently already been considering ordering its own branded
integrated TV sets as well. TV advertisements by the rental division of
Granada, part owner of BDB, have already mentioned integrated TV
upgrades. An insider at Toshiba, however, said it is unlikely that it
would allow the broadcaster's own branding on its hardware.
Machiavellian-minded observers have suggested that Sky televisions
might close out BDB pay-subscribers with one saying: "This is not going
to be a harmonious operation [between Sky and BDB] - it's going to be
bloody." However another source argued that any such scheme would mean
a potential loss of subscribers to Sky's own premium channels offered
as part of the BDB bouquet. It is understood that Sky has spoken to
Grundig, Toshiba and Sony, with one source suggesting orders in the
area of "seven-figure numbers", although numbers closer to 30-50,000
seem more likely.
BSkyB's "low definition television"
Consultant Dermot Nolan of TBS believes that the battle will reach a
new level. Nolan told this week's Television Distribution Technology
conference in London that Sky's digital test transmissions from Astra
1D (in the 28.2 degrees position) have "obvious encoding errors" and
side-by-side comparisons suggest Sky is prepared to accept lower
transmission standards than terrestrial broadcasters. Nolan suggested
that Sky is using a nine-to-one compression ratio with bit- rates as
low as 1.5 Mbit/s for movies and 3-3.5 Mbit/s second for sport,
compared with the DVB norm of 5-6 Mbit/s. The BBC is understood to be
planning much higher bit-rates for their transmissions, while digital
terrestrial transmissions are likely to average some 4 Mbit/s, which,
says Nolan "could lead to picture quality becoming a competitive
battleground between BDB and Sky ...[with Sky being] described as
low-definition television [and not] doing full justice to digital
television."
Meanwhile, the ITC's chief executive, Peter Rogers, speaking at a
presentation on the regulatory commission's latest consultative
document on interoperability, said that Sky's and BDB's set-top boxes
would be compatible in basic respects. BDB has admitted that Sky's
electronic programme guide will not work on the first terrestrial
boxes, which BSkyB argues is in breach of the interoperability
agreement between the two digital rivals. Sky however appears to have
accepted that 'basic compatibility' will be possible from launch.
The essential problem in this growing dispute is that compatibility is
in the eye of the beholder. News Digital Systems' Abe Peled said:
"There are levels of compatibility. Where compatibility ends is in
interactive services; the first one will be impulse pay- per-view."
He pointed to certain kinds of advanced services, such as interactive
advertising: "This would not necessarily be picked up with the BDB box
[even] if it had a satellite sidecar." It has to be pointed out that
neither Pace nor Nokia have been commissioned to make a sidecar - or a
tuner - of any flavour.
"The most dangerous thing is having the consumer confused - both
players will lose," added Peled. The UK's National Consumer Council, in
a response to the EU's green paper on convergence, has said this week
that current discussions are "obsessed with the interests of business
and there is a real risk that the needs of the consumer will be left
behind."
Furthermore, the Consumers Association, with 800,000 members, is
plainly advising would-be purchasers of digital hardware to refrain
from buying until the compatibility issue is resolved.
In its consultation document, the ITC stated that digital TV "should
be made available at minimum cost and inconvenience to viewers whilst
leaving them to be able to choose between the widest possible range of
digital set-top boxes and integrated digital television sets." It says
that "the ITC would be concerned if any of its licensees were to raise
unreasonable barriers to interoperability and open access which might
prejudice fair and effective competition and would consider these
matters on a case by case basis."
The proposals contained in the document cover the specification of
transmission standards for terrestrial, cable, satellite and microwave
delivery, based on the proposed EU standards, the extension of the
'open access' provision to cover licensees intending to offer digital
services by means other than terrestrial and an invitation to comment
on other issues relevant to interoperability. The formal specification
of the EU digital standards is to be finalised by 1 September.
On the question of electronic programme guides, the ITC document notes
that "it is likely that a number of incompatible EPGs will be used by
different operators... In some cases interoperability between these may
be possible based on agreements to cross-carry proprietary data
formats. This cannot be guaranteed, however, and may not be a viable
solution for a generic receiver such as an open standard idTV
[integrated digital TV]".
One stipulation may be of interest in light of any agreement between
either of the parties and TV manufacturers to build integrated TVs:
"The ITC is concerned that its licensees should not influence
manufacturers in a way which may prejudice fair and effective
competition in the provision of licensed services and services
connected with them. The ITC, in accordance with its general duties,
will be concerned in particular to ensure that its licensees do not
restrict manufacturers' freedom to decide whether to embed Conditional
Access (CA) technology in idTVs, for example by refusing to support the
plug-in CA modules necessary to make an open-standard idTV feasible, or
otherwise."
Also, speaking at the London TV technology conference, Scientific
Atlanta's Paul Pishal suggested that consumers will increasingly see
set-tops as disposable items, routinely needing to be upgraded. The
consumer will clearly be less inclined to replace integrated TVs.
But retailers will be nonetheless keen to sell them - as pointed out
by Nolan - UK multiple retailers can reap margins on high end TVs of
Pounds 200-300, dwarfing the Pounds 30 they earn from set-top sales.
NDS' Peled said that the consumer will have to make the final purchase
decision: "The ITC is correct when it says that the boxes will be
compatible in the sense that you will be able to watch subscription
services; it depends on how the level of compatibility is defined. It
is up to the consumer to decide the best way to protect his
investment."
He added that making the technical adjustments needed to ensure full
comptibility would certainly delay the launch of both platforms.
* DiviCom has agreed a deal with BDB to supply headend compression and
multiplexing equipment at its DTT broadcast centre in London.DiviCom
will supply its MediaView MV40 encoder, MediaNode MN20 multiplexer and
MPEG Media Toolkit (MMT). BDB has hired DiviCom to integrate its
headend equipment with the MediaGuard conditional access system
provided by Canal Plus.
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