Lots of pause for thought in other nation's push for digital TV

[Dan Say]

CRTC says yes, (Quebec says no) but digital TV is coming if from the U.S.

From the British point of view....

Why PSB must remain our USP

The digital switchover could kill off the BBC and C4 unless they return to core public-service values
by Roger Graef
Monday June 25, 2007 MediaGuardian.co.uk

Guardian

The crunch is coming soon. When the analogue channels are finally switched off, there will be monumental changes that will transform the face of British broadcasting. The public-service terrestrial broadcasters, BBC1, BBC2 and Channel 4, will lose their default advantage and the rise of on-demand television will pose the question: do we need so many full-time channels, competing to fill their airtime?

Digital viewers will find reality, quiz and game shows, as well as gardening, cooking, property and other makeover programmes, on a plethora of cable and satellite channels. Why should we pay the BBC and Channel 4 to make more of them?

Most significantly, the current obsession with ratings will mean that digital audiences will splinter even more than terrestrial ones. So new measures of success will be needed. Achieving impact could require either more investment in high-profile, ever more expensive celebrities, or a wider range of diverse and original programmes appealing to a broad spectrum of interests.

Everyone wants high quality programmes that are fresh, and original, and "punch through the schedules", but the current obsession with numbers at the expense of judgment works against that. Fixed slot costs, modest development funding and an obsession with ratings reflect the dominant role of accountants in recent years.

This is understandable at ad-fundedchannels such as Five, Channel 4 and ITV, but the whole point of the licence fee is to enable the BBC to take more creative risks. Yet ratings now drive BBC commissioning meetings to a greater degree than even their commercial rivals.

Despite their continued achievements, the BBC and Channel 4 are both suffering from crises of confidence: the former partly because of the less than expected licence fee settlement, and the latter because of falling profits and a series of controversies that have put its future as a public service broadcaster in doubt. Channel 4 is seen as ripe for privatisation and the BBC is deemed too competitive . Some critics are urging subscription as an alternative to the licence fee.

Both channels need strong leadership to win their case for public funding. That means no longer apologising for the remit, but celebrating it. Both are making more and arguably better programmes across a rich palette of issues and styles, especially in factual and current affairs, and yet a growing number of people feel "there's nothing to watch on telly".

One reason for this misconception is the decision made some years ago to promote a few big programmes at the expense of the rest. Consistently excellent strands such as BBC2's This World get major promotion for the first episode, but none for the rest; yet each film is different, and it is the only regular programme on the BBC's flagship channels that presents the rest of the world - if regular is an accurate description of a programme that is shown at 7pm on 15 weeks out of 52 plus six one-hour specials.

We live in an age of contradictions: we are consumed by globalisation and its effects, and yet mainstream media are in many ways more provincial in their outlook. Part of the reason is self-interest: performance-related bonuses on top of already high salaries leads to a skewing away from the essence of public service broadcasting. But there has also been a general retreat from personal judgment.

The BBC's policy of promoting only big-name and expensive projects at the expense of off-peak programmes is editorial Darwinism; the survival of the fattest. The big independent producers and high-rating performers get the lion's share of a shrinking pot, along with prestigious projects such as Planet Earth. The weaker species get less and less money, but just enough to keep small producers with no overheads alive. But "middling" productions will go to the wall. Of course, fillers that pad out the schedule deserve to go, but also under threat is ambitious high-end filmmaking that explores the complex world around us. This wins awards but only so-so ratings - say, 1 to 2 million. If the funding dries up, it will disappear, or move to the internet.

As media sources proliferate, the best argument for funding the BBC and Channel 4 is their editorial courage and reliability. The recent BBC threat to sell the family silver by cutting journalists - especially abroad - would be self-defeating in the world of 24-hour news. Only experienced hacks - with long traditions of fact checking and checking out sources - can cope with that pressure. The Gilligan affair is nothing compared to what lies ahead.

Why should taxpayers pay for low-budget journalism, to fund yet another series of Big Brother or more Jonathan Ross and Graham Norton talk shows? Is that really core BBC and Channel 4 activity? They're fun, of course, but public service broadcasting will wilt on the vine if it is driven so hard by market values.

The uncomfortable truth is that, in the digital age, the BBC and Channel 4 will lose their right to exist as public-service carriers if they regress to the mean, play safe and invest more in - and only promote - big-budget blockbusters. Hollywood made that mistake and lost billions. As William Goldman said of the American film industry, "nobody knows anything" - worth remembering as we face another period of upheaval.

No TV executive wants anything other than quality programmes that surprise and delight and tell us about life in Britain. But the way they are going about encouraging them is counter-productive. You cannot order predictable outcomes in terms of ratings, slots and audience types as well as unusual, fresh and imaginative programmes. That's another contradiction: the demand for predictable surprises.

I leave you with three questions once asked by a psychologist trying to explore the nature of the learning experience with teachers in north London. What are the conditions that foster creativity? To what extent are they present in your channel? If not, what can you do about it? Answers, please, before it's too late.
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* Roger Graef is executive producer of Web Lives, broadcast daily on itv.com. His next programme is This World: Sharia Court on BBC2 on July 17. This article is an edited version of the James Cameron Memorial Lecture delivered at City University, London, on Thursday
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http://media.guardian.co.uk/mediaguardian/story/0,,2110327,00.html
========

And in the U.S.

[2]seattletimes.com
Business & Technology

[3]Low-graphic news index
_________________________________________________________________

Monday, June 25, 2007 - Page updated at 01:01 a.m.

New rule for TV set-top boxes sets stage for higher cable bills

By Mike Hughlett
Chicago Tribune

CHICAGO -- On the gizmo glamour scale, the TV set-top box is a bit of
a frump -- something the cable company dumps on the doorstep, not the
quarry of a shopping spree at Best Buy.

But starting Sunday, a new federal rule goes into effect that's aimed
at creating a retail market for set-top boxes and fostering more
competition and innovation in a business dominated by Motorola and one
other company.

While that may sound like admirable policy, some analysts doubt it
will work well: They say consumers will be reluctant to pay a few
hundred bucks for a box when they can rent one for a few dollars a
month, as they do now.

Electronics manufacturers, including TV industry upstart TiVo, beg to
differ.

What seems more certain is consumers' monthly cable bills are likely
to rise a few dollars after the new rule takes effect.

That's because the cable box born from the regulation costs more to
produce, a cost likely to get passed down to TV watchers, analysts and
cable operators say.

The rule change pivots on security technology, which allows consumers
to watch only the channels they've paid for. That technology is
integrated into the set-top box.

As of Sunday, it will be separated via a "cable card" that's plugged
into a slot in the back of a set-top box.

The rule change doesn't require cable customers to get a new cable
box. Only boxes deployed after Sunday must have separable security.

And cable companies can pre-install the security card before
delivering boxes to new subscribers. That's what Comcast, Motorola's
largest cable customer, plans to do.

Separable security in cable boxes was mandated in a landmark 1996
telecommunications bill. But until recently, neither Congress nor the
Federal Communications Commission (FCC) put pressure on box makers and
cable operators to implement the rule, said Mike Paxton, a cable and
broadband analyst at tech researcher In-Stat.

Little reason to change

Neither party has much of an incentive to change.

For cable operators, the integrated security system has done a bang-up
job thwarting thieves, and it's helped them control the distribution
of TV programming.

For makers of set-top boxes -- well, no corporation is likely to rush
into something aimed at giving it more competition.

The cable set-top box business is dominated by Motorola and Scientific
Atlanta, a unit of communications-equipment maker Cisco Systems.

In the first quarter, Motorola had a commanding 41 percent share of
the combined U.S. cable and satellite set-top business, according to
ABI Research, a market researcher. Policymakers believed that
decoupling security from a set-top box would lead to more competition.

The world's biggest consumer-electronics makers can't compete now
because Motorola and Scientific Atlanta effectively have a lock on
cable-security technology in this country.

With the new rule, security will be an external element to the box,
via the cable card. Motorola and Scientific-Atlanta make the security
cards, which can be plugged into a box made by another company.

"There will be nothing preventing a Samsung or Sony in effectively
providing the electronics," said Lawrence Harris, an analyst at
Oppenheimer. And a Samsung-made or Sony-made set-top box could then be
peddled through traditional electronics channels such as Circuit City
or Best Buy stores.

Electronics manufacturers have pushed hard for separable security.
"It's a really important thing," said Matthew Zinn, TiVo's general
consul.

TiVo invented the digital video recorder, distributing it through
satellite TV operators and electronics retailers. Seeing the
popularity of TiVo's DVR, the cable operators followed.

But for hardware, they turned to suppliers Motorola and Scientific
Atlanta.

"I doubt the cable industry would be using DVRs if TiVo had come out
with them," Zinn said.

TiVo has been historically hurt by its lack of sales through cable
networks. It stands to gain if a retail set-top market gets a boost
from the new FCC rule.

Retail skepticism

But some cable-industry analysts are skeptical that cable boxes and
DVRs will be a big sellers at retail.

"Retailers -- Wal-Mart, Best Buy -- have shown virtually no interest
in set-top boxes," said In-Stat's Paxton. They take up valuable shelf
space but offer retailers relatively low profit margins and little
post-sale service revenue, he said.

The outlook isn't bright, either, for the other side of the retail
equation -- consumers, said Paxton and other analysts.

A set-top box with built-in DVR would cost $300 minimum, more likely
at least $400, Paxton said. , Renting a similar box through a cable
company costs $5 to $10 a month, he said.

Plus, by renting, consumers can easily upgrade to a new box when a new
technology like HDTV becomes available.

"Consumers have no interest in buying a set-top box," Paxton said.
"They're very comfortable leasing the box."

TiVo's Zinn acknowledged that while many people are happy renting a
box, others want more sophisticated options.

As for the cost of a box, Zinn and other electronics makers expect
that to fall over time as the market develops.

"That's the way of electronics," Zinn said. "Things get much cheaper
very quickly."

In the short term, the new FCC regulation will add to the cost of a
set-top box.

That's because a cable-card box involves more complicated engineering
than a box with integrated security, said Mark DePietro, vice
president of strategy for Motorola's digital video solutions
operation.

Motorola says cable-card technology tacks on $70 to $75 to the cost of
a box, regardless of whether it's a cheaper model or a more
sophisticated DVR.

Thus, the cost of Motorola's low-end digital box will effectively
double.

TiVo's Zinn scoffed at Motorola's estimate.

"That's nonsense," he said. "Seventy dollars may be the difference
they are charging Comcast, but it's not the difference in cost," said
Zinn, who estimated the extra cost per box at around $20.

Whatever the cost, cable subscribers will end up paying part of it.
"Customers will ultimately end up paying more," said Rich Ruggiero, a
Comcast spokesman. He declined to elaborate on how much more.

Matthew Polka, president of the American Cable Association, said
consumers with basic digital packages will likely see their monthly
rental charges double, in order for cable operators to cover the
doubling of the box's price.

Polka's group represents 1,100 smaller cable operators, many of whom
serve rural areas.

Those operators charge subscribers about $2.50 per month to rent a
digital box in a basic package, Polka said, so consumers would end up
paying an extra $30 a year if their rental rates are doubled.

The added cost for separating security should go away in a couple of
years.

By then, the cable-card method of separating security will give way to
a cheaper technology -- software downloads directly from the cable
company to the set-top box.

"What's really ironic about this, most people believe that in two
years you will have downloadable [security] and won't have the need
for cards," Paxton said.
----------------
Linkname: The Seattle Times: New rule for TV set-top boxes sets stage
for higher cable bills
http://seattletimes.nwsource.com/text/2003761243_btcablebox25.html