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HDTV REALITY CHECK AT NAB CONVENTION AS GROWTH MOVES SLOWLY
04/26/1999
AUDIO WEEK
(c) Copyright 1999 Warren Publishing, Inc. All Rights Reserved.
While HDTV hype and hyperbole enveloped NAB convention year ago, last week's show in Las Vegas had decidedly real-world flavor as industry officials conceded that technology has been slow to gain ground.
Major hurdle on TV side has been paucity of programming, despite fact that 51 stations nationwide are broadcasting in HDTV (see separate report, this issue). Meanwhile, PC companies have been struggling with drafting standard for datacasting.
Indeed, PC contingent, led by Intel and Microsoft, was decidedly low key after dominating convention year ago. Microsoft focused much of its attention on WebTV's attempts to move from standalone product to integrated feature. Intel appeared to take new tack in its HDTV strategy in demonstrating software all-format decoder (AFD) for PCs from developer Quadrant that used 500 MHz Pentium III chip. AFD demonstration displayed 720p and 480p. Hitachi's AFD, which was spotlighted year ago working with PC with 333 MHz Pentium II processor and 96 Mb RAM, was given little prominence last week. Hitachi is working on embedding AFD in Media Processor Series chips jointly designed with Equator Technologies. Also missing were low-cost TV tuner cards for PCs that both Intel and Microsoft trumpeted year ago.
Programming dilemma faced by PC and TV companies was underscored by fact that CBS-TV is said to be seeking agreement with TV makers to underwrite prime-time HDTV programming this fall. CBS is said to be offering to broadcast filmed prime-time HDTV programming provided it receives some financial backing. Panasonic Bcst. Pres. Warren Allgyer hinted in news conference at NAB that company was "pursuing sponsorships for development and broadcast" of HDTV programming. Goal, he said, is to "help broadcasters create compelling programs."
"It doesn't happen by magic because a company, even Intel, says they're interested in HDTV," said Didier Le Gall, chief technology officer at C-Cube Microsystems, whose subsidiary Divicom supplies HDTV encoders to broadcast stations. "We need to achieve a point where most of the products at work are transitioning from SD to HDTV. We will only have success in HDTV, whether it's with consumer electronics or PCs, when there is significant content. It will all come together when you have the right signal for larger than 35" TVs, but right now there is nothing to feed them."
Despite lack of standard for datacasting, Panasonic and Compaq are pushing ahead with plans to introduce jointly developed tuner-decoder board by fall that will be made available to all PC makers, Panasonic Technologies Pres. Paul Liao said. At same time, Panasonic is "moving forward" in alliance with Microsoft to develop terrestrial DTV reception for PCs and interactive set-top boxes (STBs), although first products aren't expected this year, he said. "A lot depends on what the market really wants," Liao said. "Many of the delays have to do with datacasting and until those standards are set, it's a little experimental."
As PC vendors navigated to find space in HDTV market, TV manufacturers pursued 2-pronged strategy at NAB in promoting existing stock of widescreen rear-projection TVs while also dropping hints about direct-view, plasma and LCD product on horizon.
Most ambitious appeared to be Sharp, which plans to introduce front projector and 60" rear-projection set by 4th quarter based on its Continuous Grain Silicon (CGS) technology that integrates driver circuitry with panel. Display uses 2.6" LCD panel to display 1,280x1,024-pixel resolution, 300:1 contrast ratio, 280 lumens brightness. Sharp also is readying 2nd shipment of set-top box (STB) decoders for June after having sold through first allotment of fewer than 10,000 pieces, Senior Advanced Product Planning/Mktg. Mgr. Anthony Favia said. Second- generation decoder will be delivered in fall that adds 720p output and revamped electronic program guide (EPG) that overlays program information, he said. Although he declined comment on whether Sharp would match Thomson's move to $649 for its STB, Favia said there will be "significant enough price reduction" from current $1,999 "that we can entertain higher volumes with this product."
While Sharp continues focus on rear projection, Philips is planning to deliver both HDTV-compatible and integrated 30-34W sets by first quarter 2000, prices not set. Philips had planned to ship sets this year, but "we're better off waiting until we have some inventory built up and we can have a big launch," Mktg. Mgr. John Strobel said. New set will have flat-faced tube and Digital Natural Motion, algorithm driven by Philips Semiconductor's Trimedia chip that smooths out picture.
Philips' plans for direct-view HDTV sets are part of growing trend among manufacturers to fill out line that was launched last year with rear projection. PC monitor maker Princeton Graphics (PG) currently is marketing HDTV-ready 30W with 0.7 mm dot pitch 800x600 native resolution and built-in line doubler at $4,199. It's same set that Unity Motion sold as option with its HDTV satellite service but that PG has reclaimed after ending distribution agreement. PG plans to add similarly featured 34W by 4th quarter and 50" and 60" rear-projection sets by first half next year, Business Development Vp Rey Roque said. Sets will have RS-232 ports and PG will seek to fill out lineup with set-top HDTV decoder and progressive scan DVD player, he said. "We don't know if there is going to be room for everybody in the direct view, but we're coming to market with a differentiater, which is being able to do HDTV modes in their native formats," he said. PG is continuing to maintain conventional line of 27-36" Arcadia monitors, but will boost scan rate of largest size to 50 kHz from 38 kHz, Roque said.
Progress also was evident in plasma flat-panel displays. Philips will introduce next-generation 42" plasma display this fall, although it hasn't been decided whether it will move up to 1,024x1,024-pixel resolution or retain current 640x480 pixels, Product Specialist Andrew Risner said. Plasma panel source Fujitsu is introducing 1,024x1,024 display featuring its Alternative Lighting of Surfaces (ALiS) technology, claimed to be improvement on how scan lines are generated to create HDTV image. In effort to get to lower price, outboard box containing electronics for display will be sold as option instead of packaged with panel, Risner said. "The question is that at that size will it give your eye a noticeable enough difference in picture quality and will the cost justify that picture quality?" he said. Next year, Philips is likely to move to 55" or 60" and extend recent development agreement with Pioneer that focuses on "bringing plasma prices down," Risner said.
In sharpening focus on plasma, Philips appears to be hedging its bets on Plasma-Addressed Liquid Crystal (PALC), joint development pact it has with Sharp and Sony. PALC technology continues to encounter problems with motion artifacts and remains about double price of plasma, Risner said. "It's still very much in our plans, but to introduce another type of display that is close to double the price of plasma doesn't make sense," he said.
In seeking to boost HDTV awareness, Philips will release 10-12-min. instructional video for retail in mid-May. Video, which will feature celebrity spokesperson, will discuss HDTV technology including descriptions of widescreen and ATSC formats, Strobel said. It will be available for demonstrations with Sencore set-top boxes and satellite services, he said.
New entrant in plasma race is Toshiba, which showed 42W display sourced from Matsushita that will ship for commercial applications by midyear at $14,995. Display, which Matsushita also is being shipped now, has 852x480-pixel resolution, 550 lumens brightness, 550:1 contrast ratio. At same time, Matsushita is continuing development of 50W that's due in first quarter 2000. It would join NEC, which gave private showing of HDTV 50W at NAB and plans to unveil product formally at InfoComm show in June. Thomson also plans 50W plasma as flagship of DTV line.
LACK OF HDTV PROGRAMMING CALLED MAIN LIMIT ON DTV: Programming and must-carry, rather than equipment, have emerged as most critical DTV issues, speakers said at opening day of NAB convention in Las Vegas last week. More than 60 DTV stations already are on air, they said, and 250 have applied for DTV construction permits. They said number of DTV sets sold is at least meeting expectations, with nearly as many sold in normally slow first quarter (12,518 DTV set sales to dealers) as in all of 1998 (13,176).
Result is high-performance DTV sports car, Circuit City Pres.-COO Alan McCollough said, "but there's no gas for the car to run." He said lack of programming means "you can only drive the car one hour a week." He said consumer electronics industry will find ways to get DTV programming to sets through media such as DVB and DBS: "The only question is, what percentage will be from broadcasters." FCC Comr. Ness also pressed issue, saying "the launch of DTV stations won't mean a lot without the programming." She said there needs to be "a critical mass" of programming in time to spur DTV for this year's holiday selling season. CEMA Pres. Gary Shapiro agreed that "content will drive" DTV transition. He said CEMA plans another DTV Summit in L.A. Sept. 28 to focus primarily on program issues.
There already is enough HDTV programming, said Robert Hopkins, gen. mgr. of Sony's HDTV Center, but "broadcasters have to step up and ask for it." He said Sony already has converted more than 350 movies to HDTV format, and other studios have done more than 100, but stations and networks have been reluctant to pay for them. However, Belo Corp. Exec. Vp-TV Jack Sander, said that "when you know every one of your [HDTV] viewers on a first-name basis, it's a little hard to write a check for programming."
FCC expects to make must-carry decision by end of year, Ness said, but broadcasters noted that they had hoped for decision by end of June. "The FCC has not been terribly helpful" in negotiating carriage deals, said Gerry Waldron, attorney for Assn. of Maximum Service Telecasters (MSTV). He said FCC has given "a wink and a nod that they're not going to move on must-carry soon. If you telegraph that up front it affects peoples' behavior. The threat [of mandated must-carry] is not realistic enough to drive people to the bargaining table." Anita Wallgren, aide to Ness, said Ness also was disappointed by delay. Commission also was disappointed that more cable systems didn't follow Time Warner's Jan. DTV carriage agreement with CBS, and indicated lack of deals may indicate need for rules, Wallgren told MSTV meeting. She said, however, that cable operators have indicated willingness to carry DTV when there is "compelling programming."
Despite that, speakers were upbeat about success of DTV launch. Saying that "I have seen the future and it works," Sony America Pres. Howard Stringer told NAB conventioneers that "digital TV will change the world. I can tell you that with absolute confidence." DTV is "the future," he said, and "it presents broadcasters with tremendous challenges and opportunities... If the broadcast industry retreats from this challenge... it will make a mistake that is both grave and irreversible. Indeed, this window of opportunity will not remain open forever."
Stringer said homes of tomorrow will be as "connected [electronically] as our offices are today." While making several bald pitches for sale of Sony HD equipment, he said that Sony will help broadcasters "figure out lots of marvelous ways to make your businesses work better, and all we ask in return is that you stop crying in your Chardonnay about lost [audience] share." Audience erosion, he said, is "not a broadcast phenomenon, but a media phenomenon" that also is affecting cable channels, mentioning only ESPN.
NAB Exec. Vp-TV Charles Sherman acknowledged that people were "impatient" with slow progress of DTV, but said DTV broadcast launch and DTV set sales are moving faster than FCC wanted and than color TV moved in its infancy. By end of year, he said, more than 100 DTV stations will be on air, reaching almost 60% of U.S. households. More importantly, he said, set prices "are softening sooner than we expected," with $3,000 direct-view DTV sets expected to be on sale by end of year.
Other key to success of DTV launch is resolving copy protection and interoperability issues in time for holiday season selling, Ness said. Given problems, said attorney Richard Wiley, who headed FCC's HDTV Advisory Committee, it may be unreasonable to expect to have all pieces in place for this year's holiday season. NAB Senior Vp-Technology Lynn Claudy said even 2000 holiday season "may be problematic."
Indoor reception sometimes can be problem for DTV, despite other studies showing acceptable DTV performance, some set makers and retailers said. For example, Circuit City's McCollough said his company always sends technician out with delivery of new DTV set to make sure reception is adequate even before set is taken out of box. And, he said, reception issues will become more complex as more stations go on air. However, others said most reception problems are occurring in places such as Philadelphia where antennas are lower than maximum allowed height, or power levels are lower than permitted. Transmissions at maximum levels will solve many of problems, they said. James Goodmon of Capitol Bcstg., whose company had first DTV station on air, said problem isn't modulation scheme but multipath interference, "and we'll take care of that in receiver and antenna design." He also said broadcasters must actively promote use of antennas, saying Capitol is offering free $50 ChannelMaster outdoor antennas to everyone who buys DTV set.
"If there is an indoor reception problem, we ought to work with the manufacturers [of DTV sets], rather than slow the process down," Wiley said. Claudy agreed that "first we should look at the receivers. We have a long way to go in improving receiver and antenna performance." He suggested minimum performance standards for DTV receivers, making them more able to cancel out ghosts that are causing many indoor DTV reception problems. Sarnoff Pres. James Carnes later told us his company already is working with Motorola to develop chips that would do better job of canceling ghosts and improving indoor reception.
CEMA's Shapiro admitted that early DTV sets may not receive signals as well as they will in future. In response to question on improving sets and antennas, he said: "The first sets are literally handmade. They won't be perfect." He said market forces are causing set makers to improve performance, and indicated govt. solution isn't needed. He told us later that tests show that DTV indoor reception essentially is as good as, and as bad as, indoor reception of NTSC: "Indoor antennas are not the answer to the world's problems."
Number of DTV sets built to date is so small that most still are being used as demonstrators in shops, Shapiro acknowledged. He said, however, that 20 manufacturers are making sets and are ramping up quickly to meet demand. He said he hopes product pipeline will be filled, meaning number of sets available meets demand, by end of year. Shapiro said CEMA still "stands by" its earlier prediction of 120,000 DTV sets sold to dealers by end of year.
FCC isn't likely to extend 2002 deadline for commercial stations to launch DTV, Wiley predicted, based on DTV rollout and set sales' being ahead of projections. Harris Bcst. Gen. Mgr. Bruce Allan also predicted that FCC "won't accept delays" in DTV rollouts. Other DTV-related comments at convention included: (1) Panasonic Bcst. & TV Systems Co. Pres. Warren Allgyer said: "We realize we need to promote penetration and we recognize we have some responsibility for helping provide programming, so we're committed to doing it." (2) DTV set sales are averaging about 20,000 per month in U.K., where DTV launched last fall with 30 channels, said CBS Senior Vp Joseph Flaherty, chmn. of World Bcstg. Union technical committee. He said DTV already is accounting for half of all TV sets sold there. (3) There shouldn't be limits on standard-definition DTV, Wiley said, since consumers must decide whether they prefer HDTV or multichannel standard definition: "They can't do that if both aren't offered." Robert Livingston of Panasonic said initial tests indicate that standard-definition 480p offers 80% of quality improvement of true HDTV. He said 720p offers another 10%, and there remains debate on whether 1080i offers another 10%.
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