No Signal, No Takers: The Leadership Crisis Threatening HDTV's Commercial Launch

When Pack meets with Pack in the Jungle, and neither will go from the trail,
Lie down till the leaders have spoken-it may be fair words shall prevail.
-Rudyard Kipling

I have three treasures. Guard and keep them:
The first is deep love,
The second is frugality,
And the third is not to dare to be ahead of the world.

Because of deep love, one is courageous.
Because of Frugality, one is generous
Because of not daring to be ahead of the world, one becomes the leader of the world.
-Lao-Tzu

The final test of a leader is that he leaves behind him in other men the will to carry on... The genius of a good leader is to leave behind him a situation which common sense, without the grace of genius, can deal with successfully.
-Walter Lippman

Make no mistake... HDTV is a fine, fine piece of work. It is a breathtaking leap forward in transmitted image and sound. Those appreciating the finer things of home life will treasure the addition. But it may fail to come to our homes. Hard committed plans to telecast the signals are nonexistent except in Japan. Why? It is a major threat to the status quo. No signal, no takers. It will take stalwart leadership.

The mission of that leadership is to orchestrate and conduct the commercial beginnings of the higher quality television industry. It must be a followable plan where all prosper in the process. The leadership must inspire governments, investors, television and computer manufacturers, talent, program producers, transmission operators, retailing & service organizations, and the consumer so as to leave no doubt that a new era has dawned.

The first working device for producing electrical signals for transmission was a mechanical scanning system built by Paul Nipko in 1884. Later Vladimer Zworykin immigrated to the United States from Russia to develop an all-electronic television system. Neither of the engineers had the skill nor capital to create a business nor an industry. It was only after a technical paper given by Zworykin in 1929 that another Russian immigrant and then vice-president of the Radio Corporation of America (RCA), David Sarnoff, was inspired enough to do that. He provided Zworykin with the laboratory resources to realize the dream and then in 1939 announced to the world at the New York World's fair that the beginnings of a new era-an era where moving images and sound would be in every home-was at hand. It was Sarnoff who controlled both the manufacturing of television sets through RCA and the transmission of television signals via NBC. It was Sarnoff who most clearly understood that only with a combination in the marketplace of consumer TV sets and TV signals could the industry be born.

Without the leadership from Sarnoff television-the most remarkable communications scheme ever developed-may have been abandoned as an impossible scheme. The same can be said for radio. The telephone was scoffed at by Andrew Carnegie, himself preferring investments in telegraph. Each communication technology has required a powerful and far reaching vision and visionary to carry it forward. The vision had to be full of public benefit so as to lift it above mere crass commercialism. Often the visionaries suffered personal sacrifice, but new strength resulted which enabled them to move the ball onward. It took not only a vision but deep pockets of the pioneers to realize television. Each technology of note face immeasurable odds, economic adversities, and deliberate obstructions until a critical mass was finally reached.

To have HDTV we need to draw from the lessons of communications history and integrate the messages with today's dynamics. The stake is no less than the general up-grading of our future standards of living. If for any reason such an appealing development as HD fails to find a way, how can we hope to raise the standards of other things with more distant and less visible payoffs?

There are no giants like David Sarnoff saying at this time, "Here is the future and we are all going to get there this way". Rather, we have digital hardware and software saying, "I am not only replacing everything that was analog, but I am leading and you are following me into all manner of potential.... human and not so human." Technology spends a great deal of its resource pushing from behind as engineers seek to get their latest inventions into the mainstream. But with the digital revolution it has pushed through the usuals walls of resistance and by dent of new discovery in front of is leading everyone to little individual branches and nirvanas. Where will it lead us ultimately? If we look out 20 years we start to get a handle on the vision. It will lead us onward into a new world as different as is the industrial age to the age of bronze.

What It Means...

HDTV has been a symbol for many things-competitiveness, technical prowess, ingenuity. But mostly it is the symbol of the future. It is the cleansed window upon which all the future will be seen. Never has an opportunity come at a better time. The sights and sounds, the subtleties, textures-beauty in fact-of the rich and diverse cultures in the "new world order" are being offered LIVE! for your pleasure. Conversely, the terror of war, hunger and treachery will be all the easier seen. It is a development that enriches enjoyment and drastically increases involvement. There are millions of words already written about its supremacy in education-distance learning and medical. Of course, it is not a messiah. It is either, as Edward R. Murrow said about television, a box with "lights and wires" or the greatest new instrument for good ever developed.

When? What? Where?

In 1987 the press spotted the HD movement in progress. Everyone asked: "When will it come? When can I have it?" It was reportedly available by 1991, that revised to 1993, and now it is more likely to be 1997, if then. The question, however, sends chills up the spine of all signal providers-the broadcast, cable, and videotape services-the world over. "It is up to them", say manufacturers of HDTV sets, "to inaugurate the service. We have done our part and they have to do theirs ." But who will in the end provide the start-up capital for doing so? Who will have a plan grand enough to stand out as a star amidst the clutter of 500 little stars... all interacting?

So Where Is HDTV Today?

In short-stuck in a doorway. The squeeze holding it fast is your favorite ol' standards-NTSC, PAL and SECAM-touting last minute improvements to stave off the end of its era. When threatened an old standard passes through a period of re-animation. A flurry of improvements push the upper limits. Hope to discourage the newcomer is the driver. New, but questionable uses of the old standard are promoted to spur artificial growth. You can see this today with Faroudja-like decoders and line doublers. PAL Plus in Europe is another example. Ghost cancelling another. EDTV-Extended Definition Television-in Japan is the extreme example. New usages are showing up in the 500 channel story recently promoted within the cable industry. Few of those services proposed are in demand by the public anymore than HDTV.

World standards or national standards for HDTV are no longer an inhibiting factor. They are close enough to being set that the businesses to employ them can be designed. The business ideas for the new television system must arouse enthusiasm for their investors. So far they have failed mostly at this task. Without that enthusiasm HDTV will be postponed indefinitely. With enthusiasm these ideas will reach "escape velocity" fast and make the new standard a spectacular success.

Introducing HDTV

Introducing HDTV is not going to be cheap. This keeps things conservative. Not only must there be a new infrastructure for sales and service, but programming aplenty has to be transmitted in some easily accessible way. For years it has been believed by the manufacturers that broadcasting had to start it all. The cable industry was too fragmented, they said. DBS was nonexistent or too far off to matter. The pre-recorded tapes looked to some like a good idea, but not after you put a pencil to it.

Estimates to convert a broadcast plant to HDTV hover around $10 million. One million dollars is required just for a "pass through" relay from a HD program source. News and local events can be produced in the old standards. Good enough for news. For a local broadcaster it means a brand new tower or an expensive add-on. It means all new transmission equipment. To a cable system it means a new headend, electronics, and allocation of large blocks of limited bandwidth. To the smaller stations and cable companies the investment is prohibitive. No revenue would come from it for years. The only rationale for moving is force by government regulation or competitive pressures. In the aggregate the cost will be in the billions before ever a profit is turned if the existing telecasting models are used. The only ones standing to make an early profit are the manufacturers.

Reducing the possibility of their carrying all of the water is that the "phantom" long threatening to drive broadcasting into HD is now out of sight and mind. Once feared by broadcasting as the driver of HD, cable (premium channels mostly) declared it would not be them but would be the VCR and tapes. The VCR people said we can't afford it unless it is compatible. Direct Broadcast Satellite operators say HDTV is not a good use for their pricy transponders. Choice, choice, choice of old standards is the guiding business light today. "People want choice." Why people want so much choice, cynics say, is because nothing very good is on.

In 1987 the FCC HDTV began standard setting procedures. Allocation of new UHF spectrum to transmit HD is here included for broadcasters. This would give a readiness if competition showed up. Broadcasters are eager to receive this additional spectrum, but must give back (not so eager) the old spectrum in 15+ years after the start of their HD service. Not only that, they lose any of their coveted VHF spectrum (lower channels) locations. It is a nightmare to the "Vs".

The FCC process has evolved into something of a general telecommunications standard. The signal is to be fully interoperable with all media, i.e. computers, cable, broadcast, satellite. It has become an all-digital standard. "Digital," says Raymond Smith, CEO of Bell Atlantic (buyer of cable giant, TCI), "means everything relates to everything." It will take another two years to finish the testing phase of the HD FCC standard. Both Europe and Asia are working feverishly to top the US version of digital TV. Europe has a history of doing that dating back to their PAL & SECAM systems adopted in the 60s.

While not advertised, the Grand Alliance proposal is capable of decoding 5 compressed NTSC programs, or one HDTV program. Testing for this level of "flexibility" was not part of the original charter. But testing for this potential is being lobbied for and most likely will be included before the "fat lady sings". The question is: will the FCC decide it is in the best interest of the American public to use the new digital channel for more NTSC quality programs instead of just one higher quality (HDTV)? The trend line: go for the lower quality-but do daily HD broadcast as well. "Let the market finally determine" the mix.

Not one of the major broadcasters know what to do with additional "channels". Transmission costs of television is high, but not a determinant factor. Programming and marketing cost is. Advertisers are not eager to slice up their audiences with nugget size networks either. They would compete with themselves (though more target-specific advertising is interesting in a downsizing era). The only idea making sense for multiple digital channels is alternative scheduling for something like 60 Minutes-five nights a week at different times. The maximum audiences for that program license might be found. The idea of providing five fully programmed channels transmitted from one tower is like creating four new networks. It so far has been unthinkable.

The Persistence of Existing Standards.

Few will argue that radio didn't suffer from the development of television. Any "new" standard produces in its wake fear and reaction. Often attempts at suppression arise by those living from the old standard. The older standard tries to adopt the new as its own to squash any potential of competition. But this causes further confusion since employing a new standard depresses the value of the old without equal or greater appreciation from the new. You can lose audiences faster than you can build them. The new standards get shelved and...

Only when the decrease of value on one side is off-set by an increase value on the other are new technological standards viable to existing institutions. Without that condition a preservation strategy arises ad hoc from those who recognize a threat is at hand. ABC rallied many in the winter of 1987 when then vp of Engineering, Max Berry, said at the SMPTE conference in San Francisco. "NTSC (today's US standard) is the greatest asset of the American broadcaster" and that HDTV should not be "imposed upon us".

Where Is The Public In The Debate?

Absent from the HDTV movement is the public. Few studies measuring public reaction and attitudes towards it have been run. Those few never evaluated the most appreciated factor of HDTV-long-term viewing satisfaction. In side by side tests at MIT in '88 the public often favored in the minutes given them to decide the existing standards over the new. The reason-brightness. But no test were run where the public viewed superbly crafted programming in armchair comfort over a prolonged period of time. HDTV certainly strikes one immediately, but after a time of viewing a much deeper appreciation sets in. So far there have been no opportunities in the US for lengthy public viewings. As a result no meaningful demand has arisen. This is about to change with theme park exhibitions. In Japan public demonstrations are going on, but the results are mixed. Few of the pubic sites are optimal. Excessive ambient lighting is a major problem. Viewing distances are not uniform. Poor programing ends the fascination for the viewer and they fail to evaluate the product as it would be in their home. The consumers in Japan have also heard about all-digital HDTV coming from the US. The current analog (MUSE) sets won't receive it. Buyers jump back and wait. These factors and a massive blowout in the bubble economy dampened the higher hopes for HDTV's quick acceptance in Japan. But it is far from dead and new commercial stations are being readied for Asia with HDTV broadcast in 1996-97.

What Does It Take To Start It in the U.S.A?

To have a new standard up and running in the U.S. marketplace there has to be a combination of things. First, there must be a solid standard in which the public has no reason to doubt. Sets need to receive the old standard as well as the new. The public will not fret over the standard, just that it works as advertised and won't change into something else before they get their money's worth. It has to be market driven. The public will not support with taxation an underwriting of this signal since the first buyers will be the wealthy. Program delivery must be commercial and appeal to early adopters. If the first deliverer of HD signals is successful, the other signal providers will follow in their own time when green lights go on.

Is There A Signal Provider For the U.S.?

In ten years research we find no traditional signal providers willing to be first in transmitting HDTV programs. This is not to say none have a well defined plan to employ HDTV signals the instant they are commercially viable, or, they are forced by regulation. The FCC is without the strong guidance of former chairman, AL Sikes. Under his leadership the FCC would set a standard, assign new spectrum, and enforce its use as an HDTV signal service. But the new chairman has not yet been confirmed. There is little known about his view of HDTV. His strength is in litigations. That could be useful if broadcasters try to weasel out of using their new spectrum for HDTV. One thing appears the most certain... none of the existing signals providers are going to move first. It is a game of chicken... ...and egg. It may take a new bird in town.

What About a Maverick Like Ted Turner?

The whole world pivots on commitments made at the key time. When things are ripe one person taking a stand can bring about change. Clinton may personify this view for many. He came from what most would call "nowhere" to the presidency of the United States. His was the more appealing message of the hour... and he won. Without a commitment from at least one person to provide on a large scale high quality HDTV program signals, HDTV will miss its window and fall dormant for 20 years or more.

But why would anyone make that commitment? Who is going to make money with such a commitment? Even after some signals are in the air (wire or fiber) there is a slow market penetration predicted of no more than 1% within five years. The pioneer could go broke with those numbers. True, the first signal provider is likely to be losing money for a long time. Being second is much safer position since one enters when it looks good. The pioneer will be one who takes a stake in all HDTV related businesses to finance the one which drives them all.

So, How Is It Going To Start?

Over the years we have seen many scenarios, some of which have a structure not easily understood by conventional telecasters. There are few executives left today who were part of the pioneering of television. Television is a mass marketing scheme (though becoming less so) today and the most powerful men and women in the business are numbers oriented. Not since Chuck Dolan started HBO with 200 subscribers has there been any solid pioneering work of this kind done in television. Mention starting HDTV with a universe of 200 subscribers and the subject changes immediately. Not until someone with ability understands that just such a start may be required is there much hope for an important HDTV signal service launching. Today with the Direct Broadcast Satellite (or even C and Ku Band) an enterprising entrepreneur can start a service with one antenna located 22,300 miles in space and reach all of North America. This was not the case in early television, but this "antenna" will cost upwards of $2 million per month (DBS. Far less in C Band). One idea has it that it will start as a neighborhood franchise theater. This 'McDonalds style' mom & pop franchise could sell tickets and food in cushy little HDTV theaters which receive their programing direct from the studios or other events programmers by way of fiber optic cable or satellite. They could record on the spot for more flexible show schedules. During the day these same theaters could offer business or medical conferences and even intra-city electronic games could be played on the big screens. How about a play-off championship to whip interest in attending the neighborhood theaters? These "tele-theaters" could show not only the first runs of motion picture releases, but be the first marketing outlets for the home HDTV sets and programming-the same programming feeding the theaters.

Filler-up With Star Power

Once a form of the HDTV business is rolling the stars will follow. Stars shine brightest when involved with rising things, not those in decline. Their agents will insist. The public will respond.

At a point in time when everything moves forward together with increasing velocity, the great HDTV vision will dawn on even the most unbending of the status quo groups. They too will switch allegiances from the old standards and invest heavily in the new adding fuel to the rocket. Any HDTV signal business is going to then look very, very good indeed, especially on a global basis operated by the global media giants of the time. Every strength on the programming side the world over will seek exposure on these fantastic global networks.

As we move towards the end of the century with its Fin De Ciecle drive and spontaneity, the programming spectaculars that will occur can only be fully appreciated by this new widescreen, clear imaged surround sound medium. That will rally most anyone left fiddling around in the old and obsolete systems. Black and white television scared the hell out of the motion picture studios. But this time television is going to do a lot for the motion picture industry. Not only will it enable motion picture delivery to ticket buying customers all over the world instantly, but the means of collection will be electronically controlled in these new HDTV theaters. Having learned their lessons that television has been good, not bad, for their industry the film businesses the world over will get fully behind the HDTV movement and do for it what they will never do for the older standard.

Manufacturing Gets Giddy

At a point in all of this growth set makers around the world will have a hard time keeping up with the demand. All of the competitive infighting of the 80s will look foolish. It will make this era's television industry look quaint and primitive in comparison as demand strengthens in newly emerging and recently liberated nations. In the Pacific Rim there are well over one billion households marching into the 21st century with a new economy and a new vision for life. Hundreds of millions of households make up the newly freed regions in Eastern Europe-the former USSR. Demand, demand and more demand will cause one of the most unexpected renaissances ever in the history of manufactured electronics... and the price of it will come plummeting down to where it becomes affordable for everyone.

David Sarnoff was a techno/social prophet with the means to realize his dreams. He was not the father of the broadcasting technology- but he recognized what the emerging technology would or could do for humanity (not to mention his business). The spirit of David Sarnoff is needed again. The scale of things are different then in his era and no one person today manages resources enough to orchestrate around the world through his or her own checkbook the required movements. Only a person with a vision and respect can catalyze these things. That leaders needs to understand the business and march to the drum of a new era. One with this vision and courage will do what Sarnoff did for television with one exception. It will be much more profitable to everyone.

Dale Cripps
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