Deliver it or not...
By Paul McGoldrick
So, we have passed the magic date when our nation's DTV rollout was supposed to be complete, and we are a quarter of the way there in terms of the number of stations on-air. None of us is really surprised by that, and we know too that the FCC currently lacks either the means or intention of punishing anybody over it. But without terrestrial delivery systems in place, DTV will be a reality only for people in the larger metropolitan areas and for those who receive DTV over satellite or cable.
The UK has the highest percentage of viewers watching digital signals (39 percent) on the three delivery systems available to them: cable, satellite and terrestrial. The vast majority of those 39 percent are subscribers to BSkyB (which has long since turned off its analog signals.) Of the cable viewers, many of whom would not be able to tell you whether they were receiving digital signals or not, most are heavily committed to the system because it is also used as their primary telephony link to the outside world. That leaves a large percentage of the population who could be turned to DTV on a terrestrial system.
Two of the commercial TV conglomerates in the UK — Granada and Carlton — decided that they could woo viewers with an easy-to-use terrestrial delivery system provided they could offer killer content (which, like in the United States, really means sports.) The ONdigital Channel was launched with a $135 million ad campaign and a massive party at Crystal Palace, which is the site of the main TV antennas for London and almost synonymous for TV to the British. This launch (November 1998) was exactly a month after Sky Digital was launched. But there was a difference. ON's set-top boxes had problems — if you could get one — and the power levels allowed by the government for the little terrestrial transmission “cells” were totally inadequate.
The situation left viewers on one side of a street being able to receive a reasonable signal while on the other side of the street there would be nothing. The BBC's terrestrial cells, however, operating at about ten times the power levels, worked just fine for 99 percent of viewers.
The Christmas market of 1998 was missed, and the ad campaign fizzled. Heads rolled, lawsuits flew around and then the European Union stepped in with a killer decision. Brussels decided that ONdigital's arrangements involving Sky television were monopolistic and overnight BSkyB became foe instead of partner. STBs became free issue from Sky and, of course, ON had to respond. But Sky has spent upwards of $5 billion on their systems and Rupert Murdoch is an unrelenting competitor who doesn't understand losing.
ON spent $470 million on the exclusive rights to the Nationwide League soccer events and then threw away the little brand name it had developed by renaming itself ITV Digital. So in this case content was obtained — good educational stuff for the daytime viewers and things like soccer, The Carlton Cinema and The Food Network for prime time — but the delivery system was completely flawed. It was untested and really was sold to Carlton/Granada as a bill of goods by the British government during a banquet at Hampton Court. The power levels were chosen so as to prevent interference to other services and were inadequate as the company failed to completely validate the STB they were going to use. They moved too fast and too expensively.
Where is ITV Digital today? The black boxes have nothing to receive, 1700 jobs are gone, 800,000 screens are blank, and the company is shuttered and is in “administration,” which is a quaint British way of describing a bankruptcy where accountants are left to find buyers for the whole or the bits and pieces.
We don't yet have this situation in the United States, but we could well have it if we don't find a way to get terrestrial DTV in place in very short order. There can be no chance in the foreseeable future of turning off analog signals unless something is done. All the stations that agreed to go digital, most with a free new channel, must be brought to book in some way. The FCC must learn that it is the only body that can set a real date — not a target — and enforce DTV installation even at the cost of pulling licenses from the noncompliant. It will force the sale of weaker stations, but that is going to happen anyway — let's hasten it along so we can enjoy the content.
Paul McGoldrick is a freelance industry consultant based on the West Coast.
Send questions and comments to:paul_mcgoldrick@primediabusiness.com
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