A recent article in Asia Pacific Broadcasting (APB) provides further indications of the dangerous direction Australia is taking in the digital TV arena. Last month (p180) we very much welcomed the Productivity Commission Report on this issue, but also flagged the political unwillingness in this country to resile from earlier decisions when they proved to be ill-judged. I have used some of the comments made in APB to further emphasise the case that digital TV should not be split into two (datacasting and pretty pictures) and that the government should mandate the HDTV technology.
In North America, TV officials admit that switching to HDTV is a big risk for operators. The problem is that true HDTV ‘chews up’ bandwidth. HDTV is also expensive because, although the film that is used to produce theatrical movies intrinsically has enough definition for HDTV, it still has to be converted, via telecine, to the HDTV format. The conversion, much of which is done by Sony, can cost hundreds of thousands of dollars per movie.
Europe has chosen not to follow the HDTV track at all, instead using a PAL upgrade called SDTV, providing ‘pretty pictures’ to those who want it at a much lower price. In Europe they market these SDTV sets only to the top end of the market (3%-5%). The inference then is that SDTV, let alone HDTV, will not be a widely used consumer product for many years to come. In the USA the latest indications are that the current analogue services will have to remain in operation until at least 2013-2016!! (In Australia, under the government mandate these will turn off in 2008).
There are only a handful of HDTV customers in North America. Fewer than 10,000 true HDTV receivers would be in operation in the United States by year-end. Of those, many are satisfied with the programming they are getting from terrestrial broadcasters or the handful of cable operators that carry digital TV. That leaves only a few thousand customers to be divided among the HDTV operators.
‘Never has so much [money] been spent by so many people on so few customers’, said David Baldwin, HBO’s senior vice-president for program planning.
For terrestrial HDTV broadcasts a consumer needs to buy an HDTV set, currently costing US$5,000-$10,000, depending on the manufacturer and options. Consumers are showing reluctance to spend money on HDTV electronics. One survey indicated that more than 70% of US consumers were not willing to pay US$1,000 more for an HDTV set than they would for a high-quality SD set. Only about 10% said they were willing to pay the US$5,000 premium, which is more typical today.
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