HDTV Almanac

Apple announced today that selling video clips on iTunes is a success. This is their new service that lets you download a video clip of everything from the latest episode of “Desperate Housewives” or “Lost ” to music videos by Madonna or Coldplay, to animated shorts from Pixar. How much of a success? How does 1 million downloads since October 12 sound? At $1.99 per download, that’s pretty close to $2,000,000, in a bit more than just two weeks. Sounds like a success to me.

And keep in mind that there aren’t that many video iPods out there yet. So people are downloading and viewing these clips on other devices, too.

Just five years ago, the music industry was lamenting the rampant piracy taking place on the old Napster and other peer-to-peer networks. Since then, sites such as iTunes and the new Napster — not to mention Sirius and XM satellite radio services — have proven that people are willing to pay for their musical entertainment. And now iTunes is proving the same thing for video.

The question is not whether or not the studios will notice. The question is how they will respond. I hope that they will see the potential for gain, and not respond by trying to lock up the content with copy protection schemes that will make it difficult or impossible to enjoy the content.

Consumer Reports released a report this week that found that 87 percent of their readers that they surveyed felt that they thought digital HD content from cable or satellite was significantly better than other programming. Half of them also complained that there isn’t enough HD programming available.

It’s important to remember that the HDTV display is only one of three parts required to get the HDTV experience. If you spend the extra for an HDTV but don’t have the signal and the content, you may as well have purchased a less-expensive and less-capable display in its place.

You can learn about HDTV content in Professor Poor’s Guide to HDTV Content.

Digital Cable from Time Warner - HDTV, DVR, Premium Movie Channels, & Digital Sports Packages

As more and more consumers get HDTV sets, the demand for more HD content is growing. (And the manufacturers of the HDTVs want more HD content to be delivered, as this should help drive increased demand for the new sets.) One problem for satellite services is that they have limited bandwidth over which to transmit their content, and the higher-resolution HD content can consume more that its share of that bandwidth.

LG Electronics has been tapped by DirectTV to build set-top boxes that can decode signals encode with the new MPEG-4 compression scheme. This will let more HD content be transmitted over the existing bandwidth. Expect MPEG-4 compatible DVRs and other devices from LG in the near future.

New developments continue in the fight to create the high-definition DVD format, though it appears that we’re still far from being able to name a winner in the blue laser competition. HP had been a backer of BluRay for a long time, but last week, the company went public with its desire that the BluRay design incorporate some features currently included in the HD-DVD version.

Many of these features would make it easier to copy and store data on different drives and types of media. Other features are designed to work more closely with Microsoft Vista, the next version of Windows operating system. Given HP’s strong interest in the IT hardware, it’s little surprise that the company is as concerned with these features as it is with the consumer electronics side of the equation.

The bottom line is that we continue to get heavyweight endorsements for each side, and hints of capitulation or compromise from a few quarters, but no serious signs of either movement towards a reconciliation between the two camps, or an overwhelming advantage by one over other. Don’t hold your breath for a resolution on this one.

Comedy Central is scheduled to launch a broadband optimized IPTV site called “Motherload” on November 1. The site will include short clips from shows including The Daily Show and The Colbert Report. It will also offer original material created just for the site.

The site will be funded through advertising for Verizon’s broadband services, as well as car makers and the Army.

This is one more piece of evidence that TV content on demand is the Next Big Thing. Not only does it give viewers the freedom to watch what they want and when they want to watch it, but it also will be able to deliver the eyeballs an audience with a narrowly-defined demographic profile, which is just the sort of marketing opportunity that organizations like auto makers and the Army love. We may be saddled with old-fashioned advertising on these new services for a while, but expect that marketing for on-demand services will also evolve quickly.

Last month, Verizon got the go-ahead from the Fairfax County, Virginia supervisors to offer TV service. Yes, this is one of the first instances of the “triple-play” strategy, where a single provider aims to deliver phone, Internet, and television service all over a single connection.

Verizon calls its service “FiOS”, which relies on fiber-optic connections instead of copper cable to carry digital signals to and from your home. The company will offer streaming and on-demand programming. FiOS is already available in Keller, Texas, where subscribers get 330 channels from the service.

The US Congress has already passed a law requiring that analog terrestrial TV broadcasts cease by December 31, 2006, or when 85 percent of American households can receive digital terrestrial broadcasts. Now Congress is looking to push that up to a hard date of April 7, 2006. According to Consumers Union, as many as 80 million televisions in this country are dependent on the analog broadcasts.

Why the rush to turn off the broadcasts? Digital broadcasts take up less “space” in the radio spectrum, compared with analog broadcasts. The government already has given broadcasters frequencies for digital terrestrial broadcasts, which are already in use. When the analog broadcasts stop, that “space” in the radio spectrum can be put to other uses, such as better emergency communications systems for law enforcement and rescue services.

Licenses for those frequencies can also be sold at auction, however, with the prospect of generating $10 billion or more for the government. The Senate Committee on Commerce, Science and Transportation is considering a draft provision that would take $3 billion of those funds for a consumer compensation, education, and assistance program that will help with the cost of converter boxes that will allow digital broadcast signals to be displayed on an existing analog television set.

You can learn more about digital and analog terrestrial broadcasts in the upcoming Professor Poor’s Guide to HDTV Broadcast.

One of the biggest questions among people shopping for an HDTV is “how big should it be?” If you have an unlimited budget, you might be tempted to get the biggest display in the store. And you’d probably be making a mistake.

Think about when you go to the movie theater. Do you always try to sit in the first row? Probably not; the image will be uncomfortably large. And if you’re in a digital cinema that uses a digital projector instead of traditional film, the image will also look blocky.

The same point is valid at home. With any digital TV, you want to sit far enough back that you can’t see the individual dots on the screen, yet close enough so that the image fills enough of your field of view. For a rule of thumb, hold your arms at about 45-degree angles out in front of your body, so that there is a right angle between them. Now, divide that space in thirds, and move your arms forward one-third from each side, leaving one-third of the angle between them. That’s about how wide an HDTV screen should appear when you’re watching it. Sit in your normal viewing seat, and have someone mark where you’re pointing. That’s about how wide your display should be.

This is just a rough measure. If you’re getting a lower resolution display, you’ll want a smaller angle, which means a smaller screen at a given distance. If your eyesight is particular good, you also might want a smaller display so you don’t see the individual pixels or artifacts. On the other hand, if your eyesight is not as acute, the a larger screen is a better choice.

For more information on choosing the size of your next TV, see Professor Poor’s Guide to Buying HDTV.

By all accounts — including the numbers from Pacific Media Associates where I’m a Senior Research Associate — the LCD TV market is growing rapidly, especially for screens 30-inches and smaller. Lots of companies have been making LCD displays in this size range for years for the desktop computer monitor market. That market is crowded and margins are tight, so it should be no surprise that some established brands are now looking to get a piece of the LCD TV market.

For example, AOC is a Taiwanese company has made Envision monitors, which have earned a strong reputation for innovation and value while delivering good quality. The company now has a line of LCD TVs. CTX is another monitor maker that has recently entered the LCD TV market.

It’s too early to say whether this strategy will produce profits any more easily for these companies than computer monitors do, but expect to see new models from brand names that may not be familiar in the TV market, but that have an established presence in the computer display segment.

This changes everything. Dell is a juggernaut that has grown to dominate the desktop and laptop computer markets. And now the company is setting its sights on the living room with its new large flat panel TV offerings. In addition to smaller sets, the company now offers a 37-inch LCD HDTV and a 50-inch plasma HDTV. (You can learn more about the differences between LCD and plasma in Professor Poor’s Guide to Buying HDTV.)

Many people may not be aware of the fact, but Dell is the #1 LCD flat panel source worldwide. They sell a lot of notebooks with LCDs, and LCD monitors with their desktop computers. And a consumer survey of the “best brands” put Dell in the #3 slot for 2003 and 2004, and in 2005 the company moved to the #2 position behind Sony. So it makes sense that the company would expand into the TV arena.

The company will sell the TVs direct, but also will have 120 in-store kiosks set up around the country where buyers can see the displays in person. Dell also offers a 21-day no-questions-asked, money-back return policy, which will help ease buyers’ concerns about purchasing a television over the phone or on the Web.

Michael Dell started the company in his college dorm room, and it has driven many well-established companies out of the computer business, and some out of business altogether. Dell’s entry into the large flat panel TV market is probably causing some sleepless nights among competitors around the world.