TVBroadcast VIEWPOINT page 27

Is High Definition TV Worth The Cost?

When radio was first introduced, it must have been really exciting! Imagine moving a wire around on a crystal, and actually hearing another human voice through the air, many miles away. Or how about the early years of TV, when you could see and hear new and exciting people and places. It's harder to get us excited about new audio and video technologies now since we're basically dealing with refinements on things we're already used to. Look at the other "great," but dead, consumer audio and video formats of the last 20 years: reel-to-reel audio died, 8-track died, DAT was dead on arrival, consumer S-VHS also dead on arrival, Betamax died, 8mm is almost dead, laser disc died, and the list goes on.

Now for the new millennium we have high definition TV (HDTV), so we'll be able to see everything in more detail. Wow! Well maybe not wow, but how about "neat?" The question is, what do we want to see in more detail? Even Playboy uses a diffusion filter for the most beautiful women in the world.

Is this something that consumers have been clamoring for? No, not exactly. Digital television has been mandated by our own government (with high definition strongly but unofficially suggested), and its here to uh...uh...provide us better pictures and provide another channel for data into our home computers. It has been mandated by our government to be phased in starting in 1998 and completed by 2006.

Most HDTV experts believe that the government is being motivated by greed to sell off the surplus frequencies generated by this change, hoping to raise $25 billion (or so) as a band aid to our multi-trillion dollar national debt.

If we review the TV shows at the top of the charts in the U.S., we could get a profile of the average TV viewer. We could then ask the "average" view how much he's willing to spend to see his favorite shows in high definition. I don't mean to sound crass, but has anyone done this? Has anyone really thought this whole thing through? With all due respect, do we really want to see aging television stars in high definition? I have the feeling that the make-up artists are working to full capacity as it is. Maybe we'll end up with high definition through diffusion filters. (Would that be back to what we have now?) If TV is for entertainment, do we really care about high definition? Yes, possibly a few of the high quality educational channels would be able to benefit from the "picture window" look of their programming, but what about the other 99 percent?

COSTS

A review of the costs to implement HDTV might help us to see the rest of the "picture." Just for starters, there are about 100 million US households who will have to budget for the new high definition TV, since the new HD signal isn't compatible with current NTSC equipment. I'll bet several foreign economies are looking forward to the boost this will give to their GNP.. What percentage of the 100 million households are prepared to write a check for $3,000 for a new HDTV? One manufacturer introduced a unit at the January Consumer Electronics Show (CES), but the initial price was quoted at $8,000. (Line forms to the left.) Let's use a more realistic $3,000 price, since new technology prices always adjust in a few years, and let's be optimistic and say that 20 million households are anxious to buy into this new "picture window" TV. Twenty million x $3,000 = $60 billion dollars.

The rest of us can just buy a "black box" to add to our present NTSC sets that will translate the HD signal back into NTSC. Great, except the price of the box is projected at about $250, and we would need a box for each NTSC TV we want to use. Add a conservative 80 million "black boxes" for us "poor" folks. How many of us want to spend $250 just to keep the signal we now have for free? But let's add this retrofit cost: 80 million black boxes at $250 each = $20 billion dollars.

Are Americans really ready to go back to the "one TV for the family room" household era of the 1950's? What about the TV's in the bedroom, kitchen, garage, kids room- more "black boxes please." Oh well, that's progress.

Not so fast, we aren't done yet. Those 20 million "early adopter" rich guys don't have a VCR for their HD programs. Should they just buy a "black box" and record it in NTSC on their existing VCR or should they get a new HD VCR to keep the benefits of their HD TV? No word yet as to HD VCR prices, but you can bet they're going to make present VCR's with HiFi look very cheap. HD signals at tradeshows are currently provided by a studio VCR of D-1 quality, costing $50,000 or so, but let's get real for consumers; $1,000 is a great deal, so let's just add: 20 million HD VCR's x $1,000 = $$20 billion.

Now, there is going to be some waste, since many customers won't spend the $250 for the "black box" for each of their current TVs. Let's assume that each household will have one or two TVs that don't get the HD signal. Let's add this on: 100 million households x 1.5 wasted TVs (average) x average cost of $250 = $37 billion.

But wait, current VC's won't work without "the box" either, so I guess there will be a bunch of surplus VCRs too. The good news is that us non-adopters will be able to keep our NTSC TVs and our NTSC VCRs and watch our library of recorded tapes an rental tapes, too. (I'm surprised that the government didn't think of this loophole! Score one for the little guys.)

What about DVD, the new disc format that the video industry plans on replacing pre-recorded rental video tapes with. Who's in charge of this one? To get DVD, we will need to buy a "player only" for $400 (or so) and the DVD discs sell for $20 rather than the 12 bucks we're used to for VHS. But don't forget we'll get CD sound quality! How many consumers care? How many opted for the VHS-HiFi for only $20 extra over the non-HiFi versions? The percentage is quite low, since most consumers just don't use the HiFi output. But now, these same consumers are supposed to pay $400 for better sound quality on DVD. Is there some added benefit of DVD that I'm missing? Let's leave this one for another article.

What other additional costs should we add for HDTV? We also have to add the TV station implementation cost for a new tower, transmitter, and other new digital HD equipment. Experts smarter than I have already estimated the cost for getting on line to be about $20 million per station. If we figure a way to cut this cost in half for the 1,600 (or so) TV stations in the US, we have another hidden cost 0of $10 billion more. This hidden cost will have to be absorbed by the advertisers who look to us, the consumers, for their return.

So let's summarize. We get high definition TV. We also get a data channel for computer stuff. (Why do I sense the computer guys are behind this to get even richer than they already are?)

Maybe it's time to take a fresh look at this "TV as entertainment thing" again and decide if HDTV is really wanted by the consumers who will have to pay the bill. Will the broadcast networks survive if their costs go up and their advertising revenue goes down due to few viewers? What if cable operators stay with NTSC- will their viewers increase by the 80 million non adopters? Perhaps this is just the government’s sneaky way to do away with the 1,600 TV stations in the U.S., since with reduced viewers and advertisers, who will pay their increased costs?

Maybe someone should suggest that the bureaucrats simply assess a few on every household of $250 to get their $25 billion, and then maybe they would leave our free entertainment alone. (Each household would save over $1,300 and have all their TVs and VCRs working again.) If we tread into paranoia just a bit, perhaps the bureaucrats are craftier than we think and have figured out a way to put the TV news hounds out of business- sounds like a good thing for shady bureaucrats. If we want to maintain our free TV system, maybe it's time to tell the FCC and our politicians what we really think of their great idea for helping to pay off the deficit.