Google
Yahoo!
Digg
del.icio.usEt Tu, Consumer Electronics Industry?
The one sector of the American economy that has benefitted the most from HDTV is consumer electronics.
For the past decade, manufacturers and retailers have enjoyed a windfall from the unrelenting demand for big-screen DLPs, LCDs, plasmas and now LEDs.
To enjoy HD, consumers are paying far more for the HD sets than they were for the best analog sets and they are replacing their old sets long before their useful lives have ended.
This year alone, it's estimated TV viewers will spend $21 billion for 29 million HD screens for bigger and better looks at their favorite TV shows. That's about $5 billion more than TV broadcasting's total annual revenue.
And whom do the CE folks have to thank for this wonderful market and the billions it has generated?
Broadcasters.
Starting back in the early 1980s, broadcasters encouraged the development of the technology, they drove the standardization effort and they made people want to buy HD sets by broadcasting programming — the best television had to offer — in HD.
Left to cable, HD might still be in an NHK lab and you might still be wondering how you were ever going to drag that 36-inch CRT across the room.
But it wasn't thanks that the broadcasters received from the set makers and sellers last week. It was a stab in the back.
The Consumer Electronics Association implicitly endorsed an FCC proposal to take back most of the broadcast spectrum so that it can auction it off to wireless broadband providers.
Most broadcasters are vehemently opposed to the plan, which is being pushed by FCC broadband chief Blair Levin, even though it would allow stations to continue to broadcast an SD channel for those who still get their TV off air and give the broadcasters a cut of the proceeds from the auction.
Although intrigued by the idea of cash for spectrum, the broadcasters feel they will be short-changed on the deal and are convinced that there is much value to be extracted from their digital spectrum through mobile TV and other new services.
CEA endorsement came in the form of a study by economist Coleman Bazelon that concludes that TV spectrum would be five times more valuable if it were reallocated and used for wireless broadband services than if it continues to be used for broadcasting.
It is, in essence, an economic argument for the FCC's proposed spectrum grab.
CEA paid for the Bazelon study and attached it to a six-page filing with the FCC that decries the scarcity of spectrum for wireless broadband and calls on the agency to reallocate bandwidth to it from other services.
"We are currently facing a crisis in wireless high-speed broadband availability," says CEO President Gary Shapiro in a prepared statement.
He also laments the "swaths of underutilized or inefficiently used spectrum," leaving little doubt about what swaths he is talking about.
CEA says in its filing that it "doesn't necessarily endorse" the Bazelon study, and it only submitted it so that the FCC would have a model for analyzing spectrum allocations.
In an interview with us this week, CEA's FCC point man James Hedlund dropped all such pretenses, saying that CEA does favor a give-back as long as participation by broadcasters is voluntary.
"Right now that's a concept that CEA believes the FCC should strongly consider," he says. "We think it's time for the FCC and stake holders to be really creative in figuring out how we free up spectrum."
As far as I can determine from looking through comments online, only CTIA, the big lobby for the wireless operators, has gone as far as CEA in putting the broadcast spectrum into play. CTIA said the broadcasters' use of spectrum is "highly inefficient."
(T-Mobile, in a footnote to its FCC comments, also called the Levin plan "an innovative example of driving marketplace solutions worthy of serious evaluation and consideration.")
No doubt CEA members see billons more to be made in selling various pocket-size gimcracks and gizmos if wireless operators can get their hands on more spectrum.
But I've got a hunch something more is at work here. By getting out in front on this, Shapiro and company may be trying to win points with Democratic policymakers, pretty much the only ones that count these days. I'm hearing that the White House is behind the FCC on this.
This issue is far from central to CEA, and Shapiro's declaration that the country is facing a critical spectrum shortage sounds a lot like what FCC Chairman Julius Genachowski and Levin have been saying publicly lately.
I really don't know if the broadcasters are irrevocably opposed to any spectrum give-back or just in the initial phase of what will be a long and painful negotiation.
But, either way, it doesn't help when an industry that has been broadcasting's close partner in bringing radio and then TV to the American public for 90 years begins adding its considerable weight to the other side.
Harry A. Jessell is editor of TVNewsCheck. He can be reached at 973-701-1067 or hajessell@newscheckmedia.com.
Copyright 2009 NewsCheckMedia LLC. All rights reserved.
This article can be found online at: http://www.tvnewscheck.comhttp://www.tvnewscheck.com/articles/2009/10/30/daily.13/.
Please visit http://www.tvnewscheck.com/ for more on this and other breaking news concerning the TV broadcasting industry.
Comments (15) - Post a comment
Universal access to broadcast TV represents information democracy in its purest form. With all citizens given free and equal access, the entire population has equal opportunity to become educated, informed, and entertained. Everyone has a seat at the show, with an unobstructed view.
By erecting a toll booth on network and local TV broadcasting, those who cannot afford pay TV -- or simply choose not to pay for what traditionally as been available for free over the public airwaves -- are informationally "red-zoned" -- excluded from mass media for financial -- and, I would argue -- POLITICAL gain of these social and business elites.
Where are the TV writers? It appears to me that only the trade journalists, people like you, Harry, who know inside out the machinations of Washington telecommunuications policy, are aware of this war on free TV. Are the TV writers too busy at fancy lunches, being wined and dined and otherwise seduced into betraying the public's trust, or too busy writing about Jon and Kate and what appears to be a politically-inspired Dave Letterman "take-down"?
Harry, you remind me of a trade journal version of the late publisher Nelson Poynter. Keep up the good work; your site already has eclipsed Broadcasting & Cable as the essential "first stop" for broadcasters and those who care about the future of broadcasting.
Because somehow that always seems to translate to "find innovative ways of charging the audience for what they used to get free".
Yes, of course broadband would be a more "economically efficient" use of the spectrum, because the definition of "economically efficient" is basically the ability to use that spectrum to generate huge wads of cash. And pretty obviously, if you charge fat monthly subscription fees, you'll probably be able to extract more cash out of your spectrum than if you're offering a free public service.
This proposal is a bad deal for broadcasters, since it would make them even more dependent on cable/satellite for distribution. And it's also a bad deal for viewers -- even those who subscribe to cable or satellite. Because if they think that the price increases they've been experiencing are ridiculous, wait until they see what happens when free TV is removed from the competitive picture.
Interesting column with some unusual distortions.
First, crediting the broadcasters for the entire HDTV transition is revisionist history. While many broadcasters deserve credit for strategic thinking, most resisted and missed the opportunity to reclaim OTA market share. Indeed, the only big mistake I made in the early 90s when I drafted a long term DTV plan for the CE industry was assuming a large role for broadcasting. I advocated for must carry for DTV long before broadcasters. I also did not forsee the lack of interest of broadcasters in expanding the OTA market. (I also did not anticipate that DVD would drive HDTV sales way more than broadcasters would). The failure of broadcasters to take advantage of HDTV and the wisdom of a close look at spectrum utilization are related by a simple fact: today, fewer than one tenth of American homes rely primarily on the free OTA signal.
The technology industry has always worked closely with broadcasters when it is in our best interests to do so. And vice a versa. The NAB opposition and delay of the XM Sirius merger, the repeated attempts for mandates on CE, even the proposals for excise taxes, came from broadcasters, not the CE industry. We understand that we have different interests. I represent some 2000 technology companies including a score of set makers. Yet all recognize the need for more spectrum and our filing was made with our member's support. Indeed, I am aware of only one objecting member and that member sells products to broadcasters.
Your theory that we are doing this to court the Democrats is novel, but I assure you it is incorrect. We are simply trying to do the right thing for a future that requires innovation and wireless broadband.. We are fairly factual and technically based in our approach. We are proud of our research (yes all the DTV and coupon projections we issued for years were correct). The position of the Ds or Rs were not even in our calculation - what is in our long term vision is that the nation desperately needs spectrum and every year fewer Americans rely on the broadcasting spectrum. Somehow this fact was ignored in your analysis above.
We have not proposed a spectrum grab by the government but would welcome creative alternatives which reward broadcasters for consolidation of spectrum usage.
We want a discussion - not a political battle. Broadcasters have a claim on rights through must carry and that should be part of the movement forward.
Simply, it is in our national interest to use spectrum better. So let's focus on what makes sense for the country and broadcasters and technology and consumers.
your assumptions are based upon curiously-correct data about the public's use of free OTA broadcasting. If such statistics actually reflect reality, then all that's left to do is to close down all radio-based delivery services and replace them with wired systems - repurposing the radio spectrum for services which require mobility. Simple, common sense, right? In fact, the national aural services should be shut down as well. (Oh, I guess we can't do that because people still listen to free OTA radio in their cars. Hmm . . . dragging those long cables . . . might be a problem.)
The point is that the published statistic about public "dependence" on broadcast services is highly-contrived. Low utilization of free TV is currently being touted by special interest groups as their means to create a business opportunity for industry to tap into lucrative new subscription services. They need only capture a large swarth of public radio spectrum to secure their place in the ever-expanding get-payed-forever media service arena.
The digital broadcast industry is barely a year old, but statisticians are running numbers about DTV's limited penetration against long-entrenched cable and satellite subscription delivery services - services which incidentally "include" DTV's primary programming. Such a misuse of statistical data is patently transparent. To obtain the true "dependence", try extracting the programming of local TV stations, and then measure the subscriber count of cable and satellite TV. You may not wish to publish that pathetic number.
I subscribe to cable TV. Yet I am also an OTA broadcaster. In fact I own the first digital television station in the U.S. Were this station's and other local stations' signals not carried by local cable in non-degraded HD, I would be using my roof-mounted OTA antenna for most of what I watch. Nevertheless, your "statistic" places me among the 90% who do not watch OTA. How convenient is that.
The truth is that an increasing number of cable and satellite subscribers have access to an OTA antenna. As soon as a hurricane arrives in Florida, the OTA service works (both radio and TV) while the subscription services quickly vanish. If you think that the CE industry is unbiased in this matter, try visiting a national TV retailer and try to find a TV set connected to an antenna. Better yet, ask a salesman to show you how well one of their TV sets can receive OTA. You had better be ready to hear an endless load of BS about why they can't accommodate your request.
The fact is that subscription service providers have invested decades suckering subscribers into believing that they have to pay them for television. Following the digital transition, the most common question asked by cable viewers calling in response to our DTV PSA was: "Isn't it illegal to watch free TV?". The truth is that once viewers see that they can receive 30 to 60 program streams (a dozen in HD) via a small outdoor antenna, they do not cancel their cable subscription. Instead, they install an OTA antenna for at least one TV in their home and then use it to watch one or more of the 3/4ths of OTA local TV channels that are 'not' carried by cable or satellite.
The more a consumer has invested in a high quality HDTV, the more likely that consumer has installed an antenna to insure the highest quality signal for that TV. Any attempt to derail the billions that the broadcast industry has invested in building the digital broadcast infrastructure which now blankets the U.S., will be met by more than some "political" battle. The battle will not be with the broadcast industry, but with millions of pay-TV subscribers (and taxpayers) who finally have found a safety net around being cut-off at any time from essential local media by their friendly TV gatekeeper.
2010 will be a banner year for DTV broadcasters as they re-enter the business of "broadcasting" via mobile TV and other feature-rich OTA services that DTV stations are uniquely equipped to provide. The vast and remarkably cost-efficient radio footprint of a high-power DTV signal at 300 meters AGL cannot be matched by any of the proposed so-called "more efficient" uses of the 0.45 - 0.7 GHz spectrum. Telephone and cable operators do not and cannot offer any competitive equivalent service.
In the year before handheld TV on your cellphone becomes ubiquitous, it is interesting to watch telephone service providers scramble to secure a piece of spectrum to feed their specialized mobile TV channels. The upcoming big controversy will be whether the "All-Channel TV Receiver Act" is to be enforced as it is written. This 1962 law gave the FCC authority to require that all television receivers sold or shipped to the public are capable of receiving all frequencies allocated for television use after April 30, 1964". The law made it illegal to sell or distribute TV receivers capable of receiving only 'selective' frequencies. Now all your members need to do is convince someone that a cellphone with a TV picture on it isn't "really" a TV.
Offering a free, so-called "must carry" cable channel to a local TV station who opts for wired delivery as an alternative to his OTA broadcast transmitter, relegates that "station" to join the myriad of cable channel programmers, each vying for some miniscule market share. Perhaps a nice exit strategy for some failing broadcasters. Trade in your spectrum and receive a piece (indeed, a very small piece) of the local cable company's business. You just have to wonder why the cable industry would stand for this 'taking'.
You may have advocated "must carry" status for DTV broadcasters back in the '90s, Gary, but it was WHDT who actually obtained it. Your claim that "every year fewer Americans rely on the broadcasting spectrum" is not only fallacious, it demonstrates the bias of your members' aptly-named "fairly factual and technically based [years of research]". Perhaps you should factor-in the consumer's interests in your market analysis, since it is they that your members intend to ultimately milk.
Günter Marksteiner, Dipl. Ing.-Dr.
licensee, WHDT-TV