11.04.2001 04:47 PM
Will Digital Save Or Kill Broadcast TV?
In a recent story by Sarah Stanfield on the CEA's DTV Conference in July, we learned that Dean Goodman, president of PAX TV, said "...we think that every consumer has a right to receive quality television for free..." Bully for him, he's talking about digital TV! He's a broadcaster. In the same story, we learned that Bob Perry, vice president of Marketing for Mitsubishi Digital Electronics America said that in his business, manufacturers have to give consumers exactly what they want and with digital, consumers are looking for "...better pictures, and they vote with their dollars." Bully for him, he's talking about digital TV! He's a manufacturer.

According to The Guide To Digital Television, the term digital is defined as "circuitry in which data-carrying signals are restricted to either of two voltage levels, corresponding to logic 1 or 0." Notice that quality has nothing to do with what digital is. Neither does the fact that digital has enabled compression techniques that have allowed the broadcast, cable, and satellite industries to deliver many more channels than ever before.

Digital: So Much To So Many

While it's true that digital allows both a higher quality and a higher quantity of programming, it typically does not allow for both at the same time. It's one or the other. For example, PVRs (such as TiVo and ReplayTV) have opted for quantity of programming on their hard drives. Quality is marginal at best. Stations broadcasting high definition (at 1080i) have opted for quality, using almost all their available digital television bandwidth for a single program stream.

What if you could do both? Lots of programs at reasonable quality? That's the goal of cable and satellite providers and could be the goal of broadcasters. Digital can save broadcast, or kill it. Killing broadcast is easy. In the analog world, all stations are pretty much the same-news is news, and it's the personalities that get ratings. In digital, there are stations that do regular programming, news, and weather radar as three channels in their digital transport stream all at the same time. Problem is that a lot of stations do that-in the same market. The reason is simple, no one has figured out how to package over-the-air DTV.

Does 6 x n=Digital Survival?

For a few years, DTV proponents have been trying to figure out how broadcasters can compete with cable and satellite providers and actually maintain (or achieve) economic health using their digital signal. One proposal that has surfaced again is a risky one. But big risks often bring big rewards. The idea is for stations in the same market to combine their available DTV bandwidth (after meeting the requirement for one free over-the-air signal of comparable quality to today's analog signal) and offer premium programming. In a market with six stations (ABC, CBS, FOX, NBC, UPN, and WB affiliates), there would be a pool of 36 MHz available for broadcasting. Subtract the bandwidth needed for a good quality standard definition signal from all six (2 MHz each) and that leaves 24 MHz of bandwidth.

That's enough for 12 channels at 2 MHz each-fairly decent quality.

Based on your specific market, you could tailor a "cable-like" service delivered over the air. Imagine being able to sell a service with all local stations, plus some of the top 10 basic cable services (Lifetime, TBS, USA, Cartoon Network, TNT, Nick, A&E, Discovery, TNN, History). Add in a little premium service like HBO or Showtime, maybe an HD feed or two and some specialty programming like BET or MTV, and you've got a very interesting business model.

Cut the price to half that of basic cable and you have an even more interesting business model. Something to talk about the next time you bump into the GM from a competing station.

Jonathan Bellows is a contributing editor for DigitalTV.


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