Hi Jim,
As a follow up to your question on ANDW, here is an article on
digital TV. ANDW should benefit from more wide scale deployment.
They were asked about whether they had negotiated a master
agreement with the TV affiliates last CC. They have master contracts
with a few of the networks and the affiliates can buy but are not
obligated to under these contracts.
NN CC tonight. I will be looking for an improvement an DSO's.
A plan to address the lack of a sales channel on the LAN side.
Stablization/Improvement in their TDM sales. A growth rate
of WAN ATM sales of greater than 70 percent (ASND's ATM growth
rate). A plan to increase USA sales to RBOC's and LEC's.
The technical trading looks pretty mixed. I don't think anyone knows
the results for sure since they are so back end loaded. The show
Lutz puts on at the CC will do a lot to restore or destroy institutional
investor sentiment.
******************************************
Tuesday, August 25, 1998
Fine tuning required
Canada waits in the wings as the U.S. rolls out digital TV. But the
changeover from analogue promises to be chaotic and expensive
More FP Technology stories
By SIMON AVERY
California Bureau The Financial Post
ÿCouch potatoes, rejoice. After years of technical, economic and
logistical delays, North America's first digital television sets went on
sale this month.
ÿThe technology promises viewers a high-resolution, interference-free
picture on a wide screen with digital sound.
ÿIt also uses less of the broadcast spectrum, allowing engineers to cram
more channels down the pipe and paving the way for interactivity.
ÿThe launch of Panasonic Consumer Electronics Co.'s US$6,000,
1.4-metre-wide set in San Diego comes three months before 35 U.S.
broadcasters begin transmitting some of their programs in digital
format.
ÿThe U.S television industry is being pushed to adopt the new technology
by the Federal Communications Commission, which has mandated all
broadcasts switch from analogue to digital by 2006.
ÿBut no such regulation exists in Canada, and electronics companies have
no plans to sell DTVs north of the border until local broadcasters
commit to a launch schedule.
ÿThe shift from analogue to digital in both countries will be gradual
but seismic.
ÿDTV is causing the biggest revamp in the industry since television sets
went color more than 30 years ago.
ÿBroadcasters will incur the added costs of running two parallel
networks until the switchover is completed, which many predict will be
well after 2006. Digital TV on display in San Francisco.
Photo: KRON-TV
ÿThe U.S. Consumer Electronics Manufacturers Association estimates
switchover costs will be between US$5 million and US$8 million for each
of the 1,500 TV stations in the U.S. The stations will need to invest in
new transmitters, cameras and playback machines. Upgrade costs to the
consumer will be at least US$525 billion worldwide over the next 15 to
20 years.
ÿSuch costs have ignited heated debates within the industry about the
best way to handle the changeover and how the new digital landscape
should look.
ÿAlthough the U.S. Advanced Television Systems Committee came up with a
transmission standard in December 1996, which Industry Canada adopted
last year, U.S. broadcasters can't agree on a common digital signal.
ÿWhat was supposed to be a universal adoption of high definition
television has spawned 18 different types of digital signals, two-thirds
of which aren't high definition at all, but only standard definition.
While SDTV will be an improvement over analogue, it offers only 480-line
resolution compared with HDTV's 1,080-line and 720-line formats. But in
its favor, SDTV leaves broadcasters with more space to create additional
channels.
ÿBroadcasts will be subdivided into the traditional interlaced format,
which cannot be played on computer screens, and the lower-quality,
progressive format, which can be displayed on computers.
ÿThe mess doesn't stop there. U.S. cable firms have refused to guarantee
they will carry digital signals from local stations, leaving viewers
with the prospect of setting up old-fashioned antennas on their sets.
ÿ"It's all over the map and that's disconcerting," says Joe Butt,
director of entertainment and technology strategies at Forrester
Research Inc. of Cambridge, Mass.
ÿAs the TV industry experiments with 18 different flavors, equipment
manufacturers are left trying to figure out how best to build their
products.
ÿWhile a dozen leading manufacturers unveiled DTV models in Las Vegas in
January -- including heavyweights like Sony Electronics Inc., Zenith
Electronics Corp. and Mitsubishi Electric of America -- only Panasonic
has one on the market.
ÿEven then, there's a rub. Panasonic's set can't actually pick up
digital signals. In addition to the TV, consumers must purchase a
US$1,700 set-top decoder that cannot be purchased until October.
ÿOther manufacturers are still determining whether to incorporate
decoders into their sets.
ÿThe shift from analogue to digital is so complicated Canada isn't going
to get in the game until it first sees some of the problems resolved in
the U.S.
ÿ"Our strategy is to lag behind the American rollout 12 to 18 months,"
says Michael McEwen, president of Canadian Digital Television Inc., an
industry consortium working with the government on the switchover.
ÿThe way Canadian players see it, the U.S. market is going to dictate
the pace and affordability of DTV, and being first to market is not an
advantage.
ÿ"Most people realize [DTV] is inevitable. They just wish they didn't
have the cost associated with it," says McEwen, who served as chairman
of Canada's task force on digital television last year.
ÿThe manufacturers selling the equipment for DTV are less than impressed
with the cautious approach.
ÿ"This is a U.S. product launch," Panasonic spokesman Kurt Praschak says
emphatically.
ÿ"Until some decision is made about when broadcasting will begin [in
Canada], we won't be selling any product there."
ÿBut Michelle Beck, vice-president of regulatory engineering at the
Canadian Cable Television Association in Ottawa, says Canada's smaller
market means a slower, more co-ordinated approach is the way to go.
ÿ"It is very difficult for cable to support the introduction of HDTV at
this time," she says.
ÿCable companies are still trying to cope with the new batch of
specialty services licensed in 1996. The extra capacity the industry is
adding for that purpose doesn't even begin to address the transition to
digital, she says.
ÿ"We want to delay until some of the technical issues have been
resolved," says Beck.
ÿ"They're really pushing the envelope in the U.S., and a lot of
consumers are going to be disappointed when they discover they can't
hook up cable to their new products."
ÿThe Canadian industry is working in concert to develop a test
transmitter that it hopes to have working soon.
ÿDespite all the delays and jostling, equipment manufacturers insist
digital technology will take off.
ÿCEMA predicts DTV will give a boost to the stagnant television
manufacturing market, generating one million unit sales in the next two
years and 10 million, representing 30% of the U.S. market, by 2006.
ÿThat's a rapid penetration rate given that 42% of Americans have no
clue what DTV is yet, according to the association's research.
ÿBut the market will be spurred by a steady drop in prices as more
consumers buy the technology.
ÿ"The 14 top TV manufacturers will soon compete margins down lower,"
says Todd Thibodeaux, senior economist at CEMA. "It's a very competitive
TV market in the U.S."
ÿMcEwan estimates that in five to 10 years, DTV sets will sell at a
premium of only 20% to 30% above analogue sets.
ÿButt predicts the ultimate driver of digital television is going to be
programming.
ÿNobody is better poised to benefit from DTV than the motion picture
industry, he says, because wide-screen DTV will require content be shot
to film industry standards.
ÿ ) |
