OK. So hours after I predicted the Cablevision-SNI battle would be likely to be protracted, the two sides settled and Scripps programming was reinstated to Cablevision subscribers. I was wrong. I thought that if Cablevision had denied Yankees fans the YES network for over a year, they would have no problem stringing Long Island foodies along for a few months. Maybe there should be a seven day waiting period for bloggers too!
One of my readers raised an interesting question. As Scripps was airing their programming on broadcast TV, what was the reaction from other affiliates? I’m sure calls were placed to Knoxville about this by other cable ops in the NY DMA. Also, you probably recall that last week Cablevision CEO James Dolan was making some very public statements that maybe the bundled programming model was outmoded. Almost certainly it was a public statement made to illustrate and protest the carriage requirements in the SNI Agreement. Chances are that Food Network and HGTV will likely to continue to be carried on Expanded Basic. Cable operators are no closer to a la carte or themed tiers than they were before. As far as the big question, “Did Scripps get the “fair value” they were seeking; the 200% increase that CVC said that SNI wanted?” All the press statements say are that the “terms of the deal were not disclosed”.
While I’ve made notes to deal with programming bundling in a later post, I’m not even going to touch the question of whether New York’s foodies scare CVC more than Yankees fans. I guess all I can say is, “Hey Comcast, want me to do a post on the stalemate between Versus and DirecTV?”
Friday, January 22, 2010
Thursday, January 21, 2010
Are Food Network’s Moves Getting Hard for Cablevision to Digest?
The carriage dispute between Cablevision and Scripps Networks Interactive (SNI) is continuing into its third week. Food Network and HGTV went dark on Cablevision’s systems on New Years Day when the carriage agreement expired. Since then, the battle has gone public. Cablevision is accusing SNI of being the ones that pulled the plug on the programming and asking for a 200% increase in license fees upon renewal. For its part, SNI maintains they are asking for “fair value” for their programming.
Since going dark on the Cablevision systems, SNI has been making some of their popular programming, like Food Network’s Iron Chef America, available on local NY stations WWOR and WPIX. Is seems that Cablevision is little impressed by SNI’s recent moves. Cablevision CEO James Dolan has proved to have an iron stomach when it comes to his appetite for tough, drawn out programming negotiations. Consider that Cablevision was the last cable operator in the New York market to launch the YES Network – and that when he was dealing with Yankees fans! Dolan’s critics (and the public posture of SNI) will say that the second generation cable mogul cares little about his customers and is just trying to cut the best business deal possible, while holding those customers hostage in the negotiations. Well, yes and no.
It may be sour table grapes on SNI’s part and the unwillingness of Dolan’s critics to forgive cable operators in general for years of rate increases in excess of inflation, but one must consider that one of the primary goals for the operator in driving the best business deal is to keep their costs low, enabling them to keep the rates to the consumer at a competitive level while still making a profit acceptable to its shareholders. You see, the free market is much more complicated than the simplistic public “he says, she says” finger pointing that often accompany these types of carriage battles. Dolan is taking a “get tough” stance, as a majority of Time Warner Cable subscribers encouraged their cable operator to do in its year end retransmission consent negotiations with FOX. The thing is, Jimmy Dolan is doing it without a website. It is likely that we will see many more of these battles as cable operators look to maintain a reasonable level of programming costs in the face of retransmission consent payments to broadcasters, but that’s a subject for another post. Unfortunately, it is the customer/viewer that invariably gets caught in the middle of these battles. Cablevision does not necessarily mean to “hold them hostage”. It’s just that cable subscribers happen to be part of the currency that video distributors trade in when negotiating with programmers.
While one would think that there is a propensity for consumer to switch to another provider (Verizon, DirecTV, Echostar’s Dish Network, etc.), such thinking ignores the power of the bundle. When a consumer is locked into a bundle of services that includes voice, video and data, the attraction of the “all for one low price” proposition makes each individual channel less important, especially the marginal “niche” channels. This is even more difficult if the customer is locked into a contract.
Chances are that MFNs (so called “most favored nations” clause that requires a programmer to offer lower rates to larger operators if they are give to smaller operators) are standing in the way of Cablevision getting the rates they want for the services. That being the case, Cablevision customers can expect the negotiations to drag on for some time unless both parties can find a creative solution to work around the MFNs. Until then, many CVC subscribers who are Food Network fans are going to wish they had packed a lunch.
Since going dark on the Cablevision systems, SNI has been making some of their popular programming, like Food Network’s Iron Chef America, available on local NY stations WWOR and WPIX. Is seems that Cablevision is little impressed by SNI’s recent moves. Cablevision CEO James Dolan has proved to have an iron stomach when it comes to his appetite for tough, drawn out programming negotiations. Consider that Cablevision was the last cable operator in the New York market to launch the YES Network – and that when he was dealing with Yankees fans! Dolan’s critics (and the public posture of SNI) will say that the second generation cable mogul cares little about his customers and is just trying to cut the best business deal possible, while holding those customers hostage in the negotiations. Well, yes and no.
It may be sour table grapes on SNI’s part and the unwillingness of Dolan’s critics to forgive cable operators in general for years of rate increases in excess of inflation, but one must consider that one of the primary goals for the operator in driving the best business deal is to keep their costs low, enabling them to keep the rates to the consumer at a competitive level while still making a profit acceptable to its shareholders. You see, the free market is much more complicated than the simplistic public “he says, she says” finger pointing that often accompany these types of carriage battles. Dolan is taking a “get tough” stance, as a majority of Time Warner Cable subscribers encouraged their cable operator to do in its year end retransmission consent negotiations with FOX. The thing is, Jimmy Dolan is doing it without a website. It is likely that we will see many more of these battles as cable operators look to maintain a reasonable level of programming costs in the face of retransmission consent payments to broadcasters, but that’s a subject for another post. Unfortunately, it is the customer/viewer that invariably gets caught in the middle of these battles. Cablevision does not necessarily mean to “hold them hostage”. It’s just that cable subscribers happen to be part of the currency that video distributors trade in when negotiating with programmers.
While one would think that there is a propensity for consumer to switch to another provider (Verizon, DirecTV, Echostar’s Dish Network, etc.), such thinking ignores the power of the bundle. When a consumer is locked into a bundle of services that includes voice, video and data, the attraction of the “all for one low price” proposition makes each individual channel less important, especially the marginal “niche” channels. This is even more difficult if the customer is locked into a contract.
Chances are that MFNs (so called “most favored nations” clause that requires a programmer to offer lower rates to larger operators if they are give to smaller operators) are standing in the way of Cablevision getting the rates they want for the services. That being the case, Cablevision customers can expect the negotiations to drag on for some time unless both parties can find a creative solution to work around the MFNs. Until then, many CVC subscribers who are Food Network fans are going to wish they had packed a lunch.
Thursday, January 14, 2010
Epix’s Epic Struggle
Officially announced in March of 2009 on the heels of a dispute with Viacom sibling’s CBS owned Showtime, Epix boasted $150 million in studio backing. The service initially made its content available online and officially launched its linear HD feed this past October. Take-up by cable operators has been slow, even if the service changed its business model from wanting to be part of a basic or digital tier at a cost of about $1.50 per subscriber the operator to being a premium service, with a premium online component only available to customers of its affiliates – making for a service with the potential to be a new revenue generator for cable operators. Until this week, the only provider that has signed on to carry the service is Verizon. This week, two more operators (Cox Communications, and Mediacomm) signed on the dotted line – both committing to an April 2010 launch.
One would think that a premium service model would be attractive to the operator, but the difficulty comes in selling a new service to subscribers on top of their existing bundle and the risk of the new service cannibalizing other premium services like HBO (owned by Time-Warner Inc.), Starz and the aforementioned Showtime. In part the need for an additional premium service in the market is why many cable and satellite operators like DirecTV and Cablevision indicated no interest in carrying the service when it was announced last spring. This is compounded by the fact that the service is made up of movies that have already been shown in their theatrical, hospitality, home video and VOD windows. Even so, revenue is revenue, and the lack of interest by major MSOs may have been more of a starting point in the negotiations than a definitive statement.
At the end of the day, unless EPIX can sign four of the top five 5 MSOs, they will struggle to become profitable and the three partner studios will be pressured to pull the plug on the service. Even though Comcast is focused on getting the NBC deal done and launching their Xfinity (TV Everywhere) service, and Time-Warner making rumblings that they are considering a rebranding, the multiplatform nature of Epix fits into Comcast’s strategic emphasis on on-demand and online video. Frankly, It’s surprising that they did not move quicker. Could it be that the Epix partners are unwilling to offer equity for carriage or is Comcast pushing for earlier VOD windows from the three partner studios as part of the deal?
On the flip side of the multiplatform aspect of the service, the online portion leaves the satellite providers out in the cold. Even if they could come up with the bandwidth to offer the linear service, DirecTV and Dish Network don’t have any local servers on the ground to cache the online HD service. Particularly telling is that, aside from Verizon, the wireline competitors like AT&T and RCN Corp. have yet to sign on. Ten months after an announcement, Epix has only announced three deals. Without the big guys in the tent, unless a whole lot more come soon, Epix could be history by the end of this year.
One would think that a premium service model would be attractive to the operator, but the difficulty comes in selling a new service to subscribers on top of their existing bundle and the risk of the new service cannibalizing other premium services like HBO (owned by Time-Warner Inc.), Starz and the aforementioned Showtime. In part the need for an additional premium service in the market is why many cable and satellite operators like DirecTV and Cablevision indicated no interest in carrying the service when it was announced last spring. This is compounded by the fact that the service is made up of movies that have already been shown in their theatrical, hospitality, home video and VOD windows. Even so, revenue is revenue, and the lack of interest by major MSOs may have been more of a starting point in the negotiations than a definitive statement.
At the end of the day, unless EPIX can sign four of the top five 5 MSOs, they will struggle to become profitable and the three partner studios will be pressured to pull the plug on the service. Even though Comcast is focused on getting the NBC deal done and launching their Xfinity (TV Everywhere) service, and Time-Warner making rumblings that they are considering a rebranding, the multiplatform nature of Epix fits into Comcast’s strategic emphasis on on-demand and online video. Frankly, It’s surprising that they did not move quicker. Could it be that the Epix partners are unwilling to offer equity for carriage or is Comcast pushing for earlier VOD windows from the three partner studios as part of the deal?
On the flip side of the multiplatform aspect of the service, the online portion leaves the satellite providers out in the cold. Even if they could come up with the bandwidth to offer the linear service, DirecTV and Dish Network don’t have any local servers on the ground to cache the online HD service. Particularly telling is that, aside from Verizon, the wireline competitors like AT&T and RCN Corp. have yet to sign on. Ten months after an announcement, Epix has only announced three deals. Without the big guys in the tent, unless a whole lot more come soon, Epix could be history by the end of this year.
Monday, January 11, 2010
Retransmission Consent Battles Are Over But the War Rages On
OK, so Time Warner Cable, Inc. cut a retransmission consent deal with FOX (News Corp.) just in time for the Sugar Bowl on New Years Day and Medicomm got their deal done with Sinclair Broadcasting before their extension ran out. Both deals got done without cable subscribers having their broadcast feeds cut off. With no more high profile deals pending you might believe the claims from the broadcasting camp that the market for retransmission consent in functioning efficiently and the cable operators should just go away quietly and lick their wounds. Not so.
Before the ink was even dry on the Sinclair deal, Mediacomm CEO Rocco Commisso had a letter on its way to Senator John Kerry (D. Mass) asserting that the retransmission consent system is broken. While some may dismiss this as a sign of a sore loser and broadcasters may argue that Medicomm would not have signed a deal they didn’t like, one should ask whether Mr. Commisso and his cable brethren have a point.
It seems that every time broadcasters lobby on the Hill it is done in the name of protecting “free” television. The recent broadcaster backlash to spectrum reallocation is just the latest opportunity for broadcasters to wave this flag. But in fact, doesn’t retransmission consent prove that there really is no such thing as “free” television. Of course, there are costs involved with producing and broadcasting content, and there is certainly value to the broadcast content. But isn’t it the broadcasters who chose to enter and remain in a business, the backbone of which is providing free over the air television on an advertiser supported basis?
Of course, the argument is always made that when compared to cable services like Walt Disney Co.’s ESPN, the broadcasters generate ratings far in excess of cable networks. As such, the argument goes, if broadcaster ratings are four times that of ESPN, then the broadcaster should be entitled to four times the license fee that ESPN collects. If the broadcasters are willing to step up to the plate and offer distributors VOD content, local ad avails and affiliate marketing support the same way cable networks traditionally do, then maybe there is a conversation to be had, but until then a game of “apples and oranges” is being played.
In the end, Retransmission Consent is a consumer issue. It easier for the Consumers Union and politicians to demonize cable operators then to dig in and see that what is actually driving the cost of multichannel video up – the ever escalating license fees paid to broadcasters and cable networks. While FOX may not have gotten the $1.00 out of Time Warner that it was looking for, they certainly did get some cash. Likewise, Sinclair has extracted their “pound of flesh” from Mediacomm and will be back at them for another portion at the end of this year when the deal expires. These are the stories of two of the bigger fish in the pond. Every year there are hundreds of smaller operators and telcos with similar stories that are even worse given their smaller size and limited, if any, negotiating leverage. For them, retransmission consent is yet another transfer of wealth out of their communities and local economies.
To be sure, cable operators like Comcast Corp. and Cablevision are reporting growth in free cash flow. However, once you dig deeper and find out where the growth is coming from you find it is not from traditional basic video services. The real growth is coming from DVR and bundled services relying on voice and data services where the only costs are those of running the physical network itself and content costs are virtually non-existent. As far as the linear video business goes, it seem that operators have become little more than collection agencies for cable networks and broadcasters.
If the cable operators can effectively turn Retransmission Consent into a consumer issue (especially in the midst of a recession) then they may actually have a chance of getting someone’s ear in Washington. Until then, expect the politicians to take credit for pushing operators to keep broadcast signals from going dark, but don’t expect them to get involved in really addressing what’s at the heart of the matter.
Before the ink was even dry on the Sinclair deal, Mediacomm CEO Rocco Commisso had a letter on its way to Senator John Kerry (D. Mass) asserting that the retransmission consent system is broken. While some may dismiss this as a sign of a sore loser and broadcasters may argue that Medicomm would not have signed a deal they didn’t like, one should ask whether Mr. Commisso and his cable brethren have a point.
It seems that every time broadcasters lobby on the Hill it is done in the name of protecting “free” television. The recent broadcaster backlash to spectrum reallocation is just the latest opportunity for broadcasters to wave this flag. But in fact, doesn’t retransmission consent prove that there really is no such thing as “free” television. Of course, there are costs involved with producing and broadcasting content, and there is certainly value to the broadcast content. But isn’t it the broadcasters who chose to enter and remain in a business, the backbone of which is providing free over the air television on an advertiser supported basis?
Of course, the argument is always made that when compared to cable services like Walt Disney Co.’s ESPN, the broadcasters generate ratings far in excess of cable networks. As such, the argument goes, if broadcaster ratings are four times that of ESPN, then the broadcaster should be entitled to four times the license fee that ESPN collects. If the broadcasters are willing to step up to the plate and offer distributors VOD content, local ad avails and affiliate marketing support the same way cable networks traditionally do, then maybe there is a conversation to be had, but until then a game of “apples and oranges” is being played.
In the end, Retransmission Consent is a consumer issue. It easier for the Consumers Union and politicians to demonize cable operators then to dig in and see that what is actually driving the cost of multichannel video up – the ever escalating license fees paid to broadcasters and cable networks. While FOX may not have gotten the $1.00 out of Time Warner that it was looking for, they certainly did get some cash. Likewise, Sinclair has extracted their “pound of flesh” from Mediacomm and will be back at them for another portion at the end of this year when the deal expires. These are the stories of two of the bigger fish in the pond. Every year there are hundreds of smaller operators and telcos with similar stories that are even worse given their smaller size and limited, if any, negotiating leverage. For them, retransmission consent is yet another transfer of wealth out of their communities and local economies.
To be sure, cable operators like Comcast Corp. and Cablevision are reporting growth in free cash flow. However, once you dig deeper and find out where the growth is coming from you find it is not from traditional basic video services. The real growth is coming from DVR and bundled services relying on voice and data services where the only costs are those of running the physical network itself and content costs are virtually non-existent. As far as the linear video business goes, it seem that operators have become little more than collection agencies for cable networks and broadcasters.
If the cable operators can effectively turn Retransmission Consent into a consumer issue (especially in the midst of a recession) then they may actually have a chance of getting someone’s ear in Washington. Until then, expect the politicians to take credit for pushing operators to keep broadcast signals from going dark, but don’t expect them to get involved in really addressing what’s at the heart of the matter.
Friday, January 8, 2010
3DTV: Is it Really Coming at You, Or Does it Just Look That Way?
Announcements are coming fast and furious about new 3DTV technologies for the home as many TV manufacturers at this week’s CES in Las Vegas are showcasing their latest efforts to make in home TV viewing more realistic. The question that many have yet to ask is whether 3DTV is ready for prime time. To answer the question it may be helpful to draw parallels to the growth of HDTV.
Current statistics state that nearly 50% of US homes have at least one high definition TV set, indicating that HDTVs, once the domain of videophiles early adopters, have become a mass market consumer good. That said high income households ($75,000+ annually) still over-index while lower income homes lag. This trend has been helped along by the HD wars that have been brewing between cable distributors, telcos and satellite providers. Early on, there were only a few HD channels available. In recent years, the number has ballooned to the point where 100 HD channels has become the standard offering with cable providers touting even more “HD choices” on their On Demand platforms.
To be sure, the adoption of HDTV has been impressive, given that it has been only ten years since the introduction of early consumer sets. However, one would be wise to consider the “chicken and egg” nature of new TV technologies. Adoption tends to follow rather than lead content availability. In recent years, programmers like NBC-Universal, Discovery Communications, Disney and MTV Networks have been aggressively rolling out HDTV simulcast channels. By converting their popular programming to HDTV they are in essence acting as arms dealers in the HD wars between multichannel providers. For the most part those channels have been provided to the consumer for little or no incremental cost. For the cable and satellite operators and programmers, plant and studio upgrades to provide HDTV has been seen as a cost of doing business to attract and maintain the growing legion of HDTV set owners. The availability of top rated programming (particularly sports) in HDTV has certainly spurred the growth of HDTV adoption.
Enter 3DTV. While 3D programming on TV has been presented from time to time as a gimmick to attract viewers (e.g. the 1997 Third Rock from the Sun two part “Nightmare on Dick Street” episode) or in an effort to heighten awareness for commercial products (e.g., the combined “Monsters vs. Aliens” trailer/SoBe commercial aired during Super Bowl XLIII in 2009), the jury is still out on whether 3DTV has a true future. Like HDTV (and DVD) a large deal of the growth potential for 3DTV rests on a three legged stool: 1.) the adoption of industry standards, 2.) the speed at which content is provided in the new format, and 3.) the ability for distributors to carry enough 3DTV signals to make adoption compelling for subscribers.
When considering standards, it is important to consider whether the goal is to present 3D images with the use of eyewear or headwear (i.e., traditional red-cyan glasses, polarized glasses, or synchronized shutter glasses) or without eyewear using an autostereoscopic display. In large part this is a matter of the consumers’ willingness to use eyewear. There is certainly a willingness to do so in a movie theater or theme park setting where the image is projected on a large screen and viewer immersion is near total. Where offered, 3D versions of movies generate on and a half times the revenue of the standard 2D version. However, there is doubt as to whether consumers are willing to don eyewear in home for extended periods of time for content presented on a smaller screen. One thing is for sure, consumer will not stand for multiple formats delivered on the same screen, constantly having to switch between different sets of glasses. The inconvenience and confusion will undoubtedly lead to high rates of dissatisfaction which will be communicated at lightning speed via online blogs and word of mouth, dooming 3DTV immediately. By far, the most impressive technology from a viewer standpoint does not rely on the use of eyewear, so called autostereoscopic display.
From a standards perspective, little is needed to display images that require eyewear. Most of those technologies have already been used on existing networks and TV sets. As far as the more impressive autostereoscopic display, last February SCTE (Society of Cable Telecommunications Engineers) announced a committee to work on standards for the provision of 3DTV over cable networks. When formed, they announced that standards like these typically take 12-18 months to be created. So far there is no word out of this group. Likewise the MPEG (Motion Pictures Experts Group) Industry Forum has recently formed the 3DTV Working Group which will be meeting for the first time CES on Saturday, Jan. 9. The purpose of the group is to coordinate 3D standards activities between mastering and display technologies. That means that 3DTV are being showcased at CES before the industry has even met to discuss standards!
Until these standards are developed and costs to produce or upconvert content to 3D is known, it is difficult to say at what rate programmers will deploy full time HDTV channels. Suffice it to say that if recent HDTV history is any indication, it will be a matter of programmers and distributors working together taking the lead in making content available to viewers. From the programmers’ standpoint, their involvement will be driven by the operators pressuring them to provide 3D content as the operators see the demand from their customers and the distributors have the bandwidth on their plant to make the content available. As with HDTV, once/if 3DTV sets reach a critical mass, the floodgates will open and all of the programmers will want to jump into the pool. However, the bottleneck will remain in the distribution plants. From the operators viewpoint, the provision of additional feeds of programming (whether in HD or 3D - requiring eyewear or not) will require the use of additional bandwidth, which is an already precious and scarce commodity. How operators deal with this dilemma, either by expensive rebuilds, further division of plant by pushing fiber further out, through the deployment of IPTV technologies, or improved compression technologies, will determine how quickly 3DTV is deployed.
At the end of the day, for all of the talk about 3DTV at CES, the consumer electronics side of the equation - which has yet to even set standards - is at the mercy of the programmers and distributors when it comes to the future of the sales of 3DTV sets. For now it seems that the future of 3DTV is best viewed using eyewear of the rose colored variety.
Current statistics state that nearly 50% of US homes have at least one high definition TV set, indicating that HDTVs, once the domain of videophiles early adopters, have become a mass market consumer good. That said high income households ($75,000+ annually) still over-index while lower income homes lag. This trend has been helped along by the HD wars that have been brewing between cable distributors, telcos and satellite providers. Early on, there were only a few HD channels available. In recent years, the number has ballooned to the point where 100 HD channels has become the standard offering with cable providers touting even more “HD choices” on their On Demand platforms.
To be sure, the adoption of HDTV has been impressive, given that it has been only ten years since the introduction of early consumer sets. However, one would be wise to consider the “chicken and egg” nature of new TV technologies. Adoption tends to follow rather than lead content availability. In recent years, programmers like NBC-Universal, Discovery Communications, Disney and MTV Networks have been aggressively rolling out HDTV simulcast channels. By converting their popular programming to HDTV they are in essence acting as arms dealers in the HD wars between multichannel providers. For the most part those channels have been provided to the consumer for little or no incremental cost. For the cable and satellite operators and programmers, plant and studio upgrades to provide HDTV has been seen as a cost of doing business to attract and maintain the growing legion of HDTV set owners. The availability of top rated programming (particularly sports) in HDTV has certainly spurred the growth of HDTV adoption.
Enter 3DTV. While 3D programming on TV has been presented from time to time as a gimmick to attract viewers (e.g. the 1997 Third Rock from the Sun two part “Nightmare on Dick Street” episode) or in an effort to heighten awareness for commercial products (e.g., the combined “Monsters vs. Aliens” trailer/SoBe commercial aired during Super Bowl XLIII in 2009), the jury is still out on whether 3DTV has a true future. Like HDTV (and DVD) a large deal of the growth potential for 3DTV rests on a three legged stool: 1.) the adoption of industry standards, 2.) the speed at which content is provided in the new format, and 3.) the ability for distributors to carry enough 3DTV signals to make adoption compelling for subscribers.
When considering standards, it is important to consider whether the goal is to present 3D images with the use of eyewear or headwear (i.e., traditional red-cyan glasses, polarized glasses, or synchronized shutter glasses) or without eyewear using an autostereoscopic display. In large part this is a matter of the consumers’ willingness to use eyewear. There is certainly a willingness to do so in a movie theater or theme park setting where the image is projected on a large screen and viewer immersion is near total. Where offered, 3D versions of movies generate on and a half times the revenue of the standard 2D version. However, there is doubt as to whether consumers are willing to don eyewear in home for extended periods of time for content presented on a smaller screen. One thing is for sure, consumer will not stand for multiple formats delivered on the same screen, constantly having to switch between different sets of glasses. The inconvenience and confusion will undoubtedly lead to high rates of dissatisfaction which will be communicated at lightning speed via online blogs and word of mouth, dooming 3DTV immediately. By far, the most impressive technology from a viewer standpoint does not rely on the use of eyewear, so called autostereoscopic display.
From a standards perspective, little is needed to display images that require eyewear. Most of those technologies have already been used on existing networks and TV sets. As far as the more impressive autostereoscopic display, last February SCTE (Society of Cable Telecommunications Engineers) announced a committee to work on standards for the provision of 3DTV over cable networks. When formed, they announced that standards like these typically take 12-18 months to be created. So far there is no word out of this group. Likewise the MPEG (Motion Pictures Experts Group) Industry Forum has recently formed the 3DTV Working Group which will be meeting for the first time CES on Saturday, Jan. 9. The purpose of the group is to coordinate 3D standards activities between mastering and display technologies. That means that 3DTV are being showcased at CES before the industry has even met to discuss standards!
Until these standards are developed and costs to produce or upconvert content to 3D is known, it is difficult to say at what rate programmers will deploy full time HDTV channels. Suffice it to say that if recent HDTV history is any indication, it will be a matter of programmers and distributors working together taking the lead in making content available to viewers. From the programmers’ standpoint, their involvement will be driven by the operators pressuring them to provide 3D content as the operators see the demand from their customers and the distributors have the bandwidth on their plant to make the content available. As with HDTV, once/if 3DTV sets reach a critical mass, the floodgates will open and all of the programmers will want to jump into the pool. However, the bottleneck will remain in the distribution plants. From the operators viewpoint, the provision of additional feeds of programming (whether in HD or 3D - requiring eyewear or not) will require the use of additional bandwidth, which is an already precious and scarce commodity. How operators deal with this dilemma, either by expensive rebuilds, further division of plant by pushing fiber further out, through the deployment of IPTV technologies, or improved compression technologies, will determine how quickly 3DTV is deployed.
At the end of the day, for all of the talk about 3DTV at CES, the consumer electronics side of the equation - which has yet to even set standards - is at the mercy of the programmers and distributors when it comes to the future of the sales of 3DTV sets. For now it seems that the future of 3DTV is best viewed using eyewear of the rose colored variety.
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