Gerry Kaufhold is more than a casual wader in the pool of technologies that will soon merge to form digital television. The principal multimedia analyst for Cahners In-Stat Group has served tours of duty as a both a broadcast and computer engineer. From these experiences, Kaufhold has seen how the two seemingly disparate industries could come to influence each other. And as digital television matures Kaufhold believes all the technologies combining to make up the medium -- telecommunications, cable, computer and broadcast -- will influence each other so much that each will be indistinguishable from the others.
From his current perch atop Cahners' Multimedia Research Service, Kaufhold spends his days dissecting technologies large and small to assess how they work and how consumers will use and accept them. He spoke with Wired News about his experiences and observations regarding digital television.
Wired News: The general public is still confused about what exactly digital television is. How do you define it?
Gerry Kaufhold: There's HDTV, and then there's digital television, which is actually a bigger thing. In Europe, they're not changing the display format. Viewers will get the PAL format [phase alternate lines, the same display format used in analog broadcasts. -ed.]. You can get five standard-definition PAL television programs on a single broadcast-television channel. That's digital television, but not high-definition digital television.
So, in Europe, and possibly the Far East, digital television can immediately take advantage of the installed base of televisions. The whole reason for us getting into HDTV stems from the fact that broadcasters wish to hold on to all of their frequency spectrum. In the United States, there is a significant glitch because we've tied digital TV to a new display format [HDTV] and any engineer will tell you that's a bad idea. You just change one variable at a time. We're changing six variables, and it's now a mess.
WN: Broadcasters are approaching one of their big deadlines for HDTV this November. I understand that the broadcasters are volunteering to do this, but that it's sort of coerced free will; they wanted to keep the FCC from mandating their roll-out. Is this an accurate assessment, and what are the problems that this is creating?
GK: Yes. One of the reasons the FCC backed off on the roll-out requirement was because of cities like New York and San Francisco. Both communities have central antenna farms: the World Trade Center and Empire State Building in New York and Sutro Tower in San Francisco. When they want to add antennas to these structures, they need someone to study the effects of these structures on the towers. New York and San Francisco went to the FCC and pointed out that even if the technology is available, they couldn't load up the tower with antennas. [The towers] could break. So, the FCC had to soften its stand on the towers. It was physically impossible to do it, but the FCC made mandates without knowing how difficult it was to do it.
WN: When broadcasters flip the switch, how do you expect digital television to work?
GK: No one has shipped a million digital televisions, so no one knows if they really work. They worked in the lab, but if we turn on in LA, we have no way of knowing that some bug might come out and bite us. I'm not saying that's a likelihood, but no one knows for sure. In some tests, they put a TV tuner in a truck and drove around Washington DC, and they found there are places where the signal just goes away and it's unexplained. But just as quickly it comes back.
WN: So in the short term, you see great potential for problems. What's the long-term view?
GK: Over the next 36 months, there are going to be adjustments. The consumer-electronics industry has some really beautiful HDTV sets. But over the next 36 months there are going to be some bumps and some technology forks in the road where we'll have to sit down and say this part of it doesn't really work. We have to work on it, but by the end of 36 months, we'll be at a point where a general roll-out of digital TV will be possible.
If you look at color TV, the first standard was set in 1952, and the first broadcast was in 1956, but the market didn't start to blossom until 1961. So, it was 10 years until you had 10 percent penetration. Now look at digital TV: It's a more significant technological change than from black-and-white to color. The standard was approved in 1996, so if you're going to follow this old timeline, you'd have four years before any digital TV appears. We've accelerated that; in two years, they're rolling it out.
WN: Do you see HDTV and digital TV more as technologies than marketing concepts, vice-versa, or a little of both?
GK: Digital TV is a technology, and HDTV is just one thing that you can do with digital TV. HDTV is just beautiful pictures on big-screen TVs, so that's a marketing concept. But digital TV, which involves the transmission system, can do a lot more than HDTV. It can deliver HDTV within a geographic region. A broadcast antenna blasts out a signal to an entire city.
This is better than cable and better than the digital telephone system because they go only where wires go. So now if you had a 10 megabit-per-second data stream that you could deliver to anybody anywhere in your city, what could you do with that? It can do anything a cable modem can do, it can do anything an ADSL telephone can do, and it can do some things nobody's thought of yet. It delivers HDTV, and it also delivers possibly three or four standard TV broadcast signals down a signal channel.
Here's a far-off concept: In LA, you can have 10 TV stations with digital-delivery systems on all 10 channels. On this, you can deliver 45 programs at once and effectively the broadcasters of LA could compete with cable. So, if the cable industry isn't nervous about this yet, it will be.
WN: Where does cable sit in all this?
GK: Cable becomes a two-way pipe for interactive services, but terrestrial broadcast becomes a cheap delivery system for one-way stuff. And if you just think about this for a second, what does a TV station do best? They put a program on the air that will draw the best audience at that time -- what's the best piece of information that most people want right now -- and they put it on. So for mass market, TV is great. If you're looking at mass-market phenomenon, broadcasters have the upper hand. But cable, because it is two-way, delivers information -- personalized information -- when you want it. The two complement each other.
WN: When broadcasters start up their digital content in November, who will be watching?
GK: Mostly program managers, station managers, and congresspeople. It's going to take a while. We're figuring nationwide, 10,000 to 100,000 sets will be sold in the first six months.
WN: Who is the audience and customer for digital television?
GK: A lot of people who read Wired will buy HDTV, because it's on the cutting edge, they have money, and they want it first. Our research indicates that there are two strata of customers. First, there are those with incomes above US$100,000. For them, it's fun. Why do people buy a Mercedes? You can get to work in a Chevy, but you spend the extra $40,000 because it makes you feel good. That's why they'll get HDTV. Another strata is primarily single men under the age of 30 who work a union job.
WN: Why union workers?
GK: Because it pays better. [In] Detroit, Ohio, Colorado, anywhere where unions are big, they want to get home theater systems, and they want the next wave. They also have more money than their nonunion counterparts.
WN: Do you think HDTV will remain a technology that only a certain part of society will get and buy into, or do you think it will honestly replace analog television -- and do so at the pace set by the FCC?
GK: Over time, we're going to see programs that are available on HDTV that aren't available on analog TV. Ten years out, there are going to be first-run TV shows where first shows are on HDTV but two weeks later on analog. Some giant studio is going to have a hit TV program on HDTV only, and when that starts to happen, you'll pull the whole viewer audience over to HDTV. With Miami Vice in 1980s, they heavily promoted the idea that it was a stereo program. This program is thought to be responsible for selling one million stereo TVs the first year it was on the air, because people saw that stereo thing and decided they wanted to watch that. That same kind of phenomenon will happen with HDTV. When they get that kind of pull, and it may be 2015 before we get to that point, that will be when digital TV becomes the replacement.
