HDTV Almanac

In a press release, The Diffusion Group (TDG) announced its new report, “The Possibilities and Challenges for Mobile TV”. In the release, TDG states that mobile TV subscription services are forecast to double their subscriber base by 2013. This sounds exciting until you find out that this means increasing from 1.6 million this year to 3.3 million subscribers in 2013. That number pales in comparison to other services; for example, Comcast is estimated to have 23.5 million cable TV subscribers.

The press release indicates that demand for the service is lower than originally expected, partly because it is an additional fee on top of other subscription services. Also, few mobile phones are equipped to receive the over-the-air Mobile TV signals.

I agree that the cost may be part of the problem, but the real barrier to growth for these offerings is that users have good alternatives already. Most of the people who would be willing to pay for a mobile TV service already have smart phones with data plans. And this allows them to access streaming content from the Internet at no additional fee beyond their existing data plan. (And if they’re paying for the data plan, they may as well use it.)

TDG suggests that the solution may be to bundle Mobile TV service in with other subscription TV services such as cable or satellite. This doesn’t make a lot of sense to me. Cable and satellite are already struggling to stop the bleeding of lost customers, and are working feverishly to make their own content available to subscribers over the Internet, through TV Everywhere initiatives.

Mobile TV is a cool idea that would have been a lot cooler 15 years ago. Unfortunately, in today’s crowded market of free, pay-as-you-go, and subscribtion services on the Internet, there really is not room — or need – for another entertainment distribution system.

Rather than spend it at Bernie’s, how about spending the weekend of September 10 through 12 at your local electronics store? The Consumer Electronics Association (hosts of the mammoth CES show in Las Vegas every January) and ESPN are joining forces to create “National 3D Demo Days“. ESPN will provide continuous 3D programming for those three days from 10 AM to 11 PM Eastern.

The content will include live college football, recorded coverage from this summer’s FIFA World Cup soccer tournament (the other “football”), and footage of the Harlem Globetrotters, and highlights from X Games 16. The CEA has posted a list of participating retailers here: http://www.digitaltips.org/video/retailer-locator.asp.

The fact remains that we don’t yet have that much 3D content available, but this is a good effort to help consumers learn more about the technology and find out what they need to get so that they can take advantage of the 3D coverage at home. I also suspect that this is part of a concerted effort to get subscription television services including cable and telco to allocate resources to the distribution of 3D content and channels as they become available.

We’ve got a chicken and egg problem here, and it looks as though both sides are working together to bootstrap the process. I still think that unless you’re an early adopter, you’re best off waiting until late 2012. By that point, 3D capability should not add much of a premium – if any — to the cost of a new television, and the supply of 3D content should be much greater by then. But that doesn’t mean that you shouldn’t go join the fun the second weekend in September.

It’s time to play a little Jeopardy. The answer is “Serbia and Macedonia“. Can you come up with the question? Give up? Here you go: “What two countries rank higher than the United States in terms of average daily time spent viewing television?” Clearly we can do better, folks! You’re just not trying hard enough.

Nielsen is out with a new report: How People Watch. It reports on how people around the world use television and other electronic devices to watch television programming. Now, it’s important to note that the survey was given to 27,000 consumers from 55 different countries. And a key factor is that they were all online users. This makes me suspect that you may not be able to generalize the answers across the entire world population. With that caveat in mind, the results are still interesting.

For example, the fact cited at the start of this piece has the average American consumer watching 5:04 (hours:minutes) of TV each day. Macedonia topped us with 5:18, and Serbia blew us away at 5:39, more than an additional half hour every day. I don’t have an explanation for this, but I will point out that the CIA World Fact Book reports that the Serbian unemployment rate is 16.6% compared with the U.S. 9.3%. And Macedonia unemployment is at 32.2%. Maybe these people just have more time that they can give to television? Oh, and we just edged out Greece for the number 3 spot; they averaged one minute less than us at 5:03 (and an almost-identical unemployment rate).

We went for the Bronze in another category as well. In High-Definition Television Ownership, we tied the United Kingdom for third place with an index score of 157. Hong Kong topped us for second place with an index score of 160, but the Australians finished far out in first with an index of 200. (Fair dinkum? Some might say that the Aussies use a different ruler to measure with; they count 576p as high-def, while the rest of the world seems to agree that 720p marks the minimum spec for HD.)

And you don’t even want to know where we finished on items such as mobile TV or watching over-the-top Internet content on a television set. Cubs fans would be familiar with our position in the pack.

Bottom line: it appears that we’re slacking off here. So let’s plan on a big push this holiday season to get hooked up, tuned in, and zoned out. Let’s see some better numbers if Nielsen decides to update this study next year!

As I wrote at the end of last month, the new Hulu Plus service for $9.95 a month stands to disrupt television viewing habits. It provides more content that does not expire, and it’s all offered in 720p high definition.

As it turns out, more and more people view this sort of offering as appealing. Some people have the attitude that everything on the Internet should be accessible for free, but that attitude appears to be changing. A new study by The Diffusion Group (TDG) polled broadband users about the new TV Everywhere initiatives from subscription television services such as cable and satellite. The concept is that existing customers will be able to access the same programming that they receive at home, but can get it as streaming video over the Internet. The TDG survey found out that 60% of the users are enthusiastic about the idea, and a total of 34% would be willing to pay at least $5 a month extra for the privilege.

On the one hand, TV Everwhere could be an important new source of revenue for these services, which are faced with increasing costs of maintaining their physical infrastructure. On the other hand, this sort of Internet streaming service could train their subscribers to get video content online. This could have the unintended consequence of users discovering that they can get enough of what they want from other sources that cost a fraction of their cable or satellite subscription fee. With those fees routinely running $100 a month or more just for television, a lot of households might be willing to chop that to $10 a month, and settle for what they can get from Hulu Plus or Netflix.

The Netflix instant streaming service is free to subscribers of the company’s disc rental service. Many customers love the streaming service, and some get more Netflix content from the Internet than from their mailbox. The one knock on the service is the fact that almost all of the content is , well, rather old. There are some classic movies, and a lot of old episodes of some great TV shows, and some excellent foreign titles. The point is that it is incredibly convenient, and it was the first signs of the Internet camel’s nose beginning to peek under the video delivery’s tent.

Well, now a bit more of the camel’s nose is showing. Netflix announced this week that it has an agreement with Relativity Media to stream the company’s first-run theatrical films at the same time that HBO and Showtime get them. Reality Media is the company behind hits including “Get Him to the Greek” and “Robin Hood”. This means that instead of having to wait years after the release of a movie on DVD, Netflix will be able to stream the movies just months after the DVD hits the shelves.

Colin Dixon of The Diffusion Group (TDG) made an interesting observation about this announcement: “As long ago as May of 2009 TDG identified premium PayTV as Netflix’ true competition.” As I’ve been saying, Netflix clearly is positioning itself for the day when it doesn’t have to manage an enormous inventory of plastic discs and cope with the steady increase of postage costs. The competition is not Redbox and Blockbuster; it’s HBO and Showtime and Starz and the on-demand offerings by the subscription TV services.

Netflix is clearly succeeding, as about three out of four subscribers apparently are using the streaming service. If people start getting their movies and archived TV episodes from Netflix (and Hulu), how much are they going to be willing to pay for all those channels that they don’t watch on the subscription TV services? This is going to increase the pressure on a la carte pricing, which I contend will be the end of subscription TV as we know it. Those services will have to become data transmission utilities delivering the Internet to your home.

(And you know what would accelerate the process? If ESPN were to expand its online streaming offerings to match what’s available on the subscription services — even at a monthly fee – I expect that users would cut the cable cord in droves. ESPN is one of the remaining valued content sources that is not available over the air or by streaming.)

So this announcement definitely qualifies as a BIG DEAL. It’s another incremental step in the redefinition of Netflix and video content delivery. The world of television is changing right before our eyes.

Is streaming video over the Internet a viable option over standard cable or satellite services? Hulu is betting that it is. Their free, ad-supported service has given access to new and archived episodes of current and past hit TV shows, as well as a smattering of feature length movies. After months of rumors, news broke yesterday of Hulu Plus, a $9.95 per month subscription service that provides complete episodes for full seasons of major shows from NBC, ABC, and Fox, among others. According to the announcement on the company blog, the service will still be “ad supported”, and will offer more content than the existing free Hulu service (which will also continue). The service will also offer content in 720p high definition.

The other part of the news is that Hulu Plus will also be available on more platforms. The blog entry mentions support for the iPad and iPhone, and Samsung has announced that it will add a downloadable app for Hulu Plus immediately for “select 2010 Blu-ray players, Blu-ray home theater systems, and the majority of 2010 Samsung TVs 40” and above.” Samsung cites that it is the “exclusive HDTV partner” for the Hulu Plus preview period. At the same time, Vizio has announced that it will also be supporting Hulu Plus on its Vizio Internet Apps (VIA) platform for its Blu-ray players and HDTVs.

Hulu Plus is starting with an invitation-only preview period, after which it will be opened up to all subscribers. You can request an invitation at the Hulu Plus site at http://www.hulu.com/plus.

This is huge news. True, you don’t get any CBS content, and the coverage of the other networks is not comprehensive. But all the same, it allows you to watch your favorite shows in HD on your HDTV, Blu-ray player, phone, pad, notebook computer, or desktop computer for a single monthly fee. This rate is way below the average cable company subscription, and puts the camel’s nose even further under the tent for a la carte pricing of cable programming. If the cable and satellite companies won’t or can’t respond, this will just hasten the demise of standard subscription-based television services.

To paraphrase Will Rogers, I never metadata that I didn’t like. And I like the new metadata system that THX has created. Known primarily for their cinema sound certification, THX has also been very active in trying to make sure that the movie experience in the living room is as good as possible. Their latest initiative, THX Media Director, has been to create a metadata system that can be encoded along with a television signal, so that your HDTV can automatically adjust key settings in response to the signal requirements.

What does this mean? One of the simplest examples is that there is a metadata code for 2D versus 3D signals. The embedded code can switch the TV into the appropriate mode. The system can handle much more than this, however. It also can automatically control color space settings, surround sound, and aspect ratio.

Now, the problem is that there is a bit of a chicken-and-egg situation here. The content producers won’t put the metadata into the signal until there are enough set top boxes and HDTVs installed that can interpret it. And the set top boxes and HDTVs won’t add the ability to interpret the codes until they’re included in the signal.

Still, it would probably be a good thing if the two ends of the chain could get together and implement this system. Having seen so many HDTVs with the wrong settings, a system that could adjust automatically could be a major improvement.

In an article last week, Media Daily News cited Time Warner Cable CFO John Martin’s statement that he expects half of all pay-TV homes in the U.S. will have the option of a TV Everywhere service to go along with their subscription. Cable and satellite companies are moving rapidly to give their customers “any time, any where” access to their programming content over the Internet. Martin also said he would not be surprised if the number of homes reached 50 million by this time next year.

TV Everywhere is an important movement in the subscription-based TV programming market. While consumers can access some TV content for free on the Internet — such as through Hulu or the individual network sites — they also want to be able to watch the premium channels and live programming that they have paid for as part of their subscriptions. The services are responding in hopes of being able to retain their customers and attract new ones.

I think that this is a great idea in general, but I’m concerned that it may backfire on the subscription services. If the TV Everywhere offerings are primarily the dozens of channels that people don’t watch that much anyway, or if there is an additional premimum charged to watch the “good” ones, I believe that it will put added pressure on the subscription services to offer “a la carte” pricing. With monthly bills of $100 to $200 being common, consumers would love to pick and choose which networks they want and not pay for the rest. But this would be the death knell for cable and satellite as we know it; I doubt that most could survive the loss of revenue for the “other” channels that don’t have much of an audience but round up the total channel count (and HD content count) for these companies. And then there’s the question of whether people will need the basic service at all; if given the choice of just getting their all content over the Internet, will they take down their dishes and cut off the coax?

TiVo and the satellite TV service Dish Network (and its parent company, EchoStar) have been embroiled in a series of legal actions over TiVo’s claims of patent infringement. Last year, TiVo won a $200 million judgment against Dish, but a federal appeals court recently decided that it will review that decision and the claim that the presiding judge should have given Dish a new trial to determine whether or not the company was still infringing on TiVo’s intellectual property.

Now the U.S. Patent and Trademark Office (PTO) has rejected two claims in TiVo’s patents. According to a report on NewTeeVee, TiVo believes that the judgment is in error, and will appeal the recent PTO decision. Earlier in the process, the PTO ruled against some of TiVo’s patent claims, only to have them ultimately upheld as valid. For its part, Dish claims that the recent PTO decision was the right one, citing prior art that should invalidate the patent claims.

As for the ultimate winner in this case, the only ones we can be sure of are the lawyers. Whether or not this dispute will end up having an impact on Dish subscribers remains to be seen.

The Diffusion Group has released a report that predicts Internet video will surpass broadcast TV programming by 2020.

The market research firm points out that broadcast television has remained fairly stable in recent years, while Internet video watching has increased by 84% from 2008 to 2009. The company forecasts a rapidly increasing rate of growth, coming at the expense of broadcast television. The co-author of the report predicts that “Internet and broadcast delivery of video content will become blended in such a way that consumers will be unaware of which conduit serves which content.”

Now, let me point out that a small decrease in the majority share is a small percentage, but an equally small increase in a minority share can look enormous. In this case, they are holding the total number of TV viewing hours constant, so the change in broadcast versus Internet will be the same. This means that the 84% growth figure is probably not all that exciting since it’s starting with such a low number. The curves in the forecast graphs are pretty flat initially, and then accelerate rapidly starting in about four years.

I believe that the overall conclusions are probably valid, if not pessimistic. The current network/broadcast/cable/satellite model is under enormous strain, as is the mass-advertising model on which they have been built. We may not have to wait until 202o to see the current system collapse, resulting in a new model that consists of separate content producers, content distributors, and broadband bandwidth providers. Individually-targeted advertising and content developed for smaller audiences will transform what we watch and how it gets delivered to us. Certainly there will continue to be mass-market blockbuster shows and movies, but these will likely become the minor portion of the available content that we’ll watch in our living rooms.