Internet will Drive DTV, Consulting Group Says

Although the original intent behind digital television was simply "better quality," the unfolding format will create unimagined opportunities for both Internet entrepreneurs and makers of widescreen computer displays, according to a recent report from electronics-industry observers The McLaughlin Consulting Group. The implementation of HDTV was the stated agenda by those involved in its design and rollout, but the biggest opportunities won't befall broadcasters, satellite providers, or traditional makers of television sets, the report says. In fact, many of the original participants might not reap the full rewards of the new technology.

The real winners will probably be Internet-based content providers and makers of high-resolution computer displays---an area populated by agile and innovative manufacturers. While heavyweight electronics companies struggle to win market acceptance for hi-def TVs priced in the high four figures, makers of computer monitors are already positioned to supply versatile, high-quality displays capable of working with any DTV format, and at affordable prices.

In addition, the "PC-centric market," as MCG calls it, is likely to enter DTV culture via the computer rather than broadcast TV. This market accepts rapid technological change, and the associated accelerated obsolescence, as natural conditions of technological existence---provided that an entire device or class of devices does not become obsolete instantly. Manufacturers who cater to this market know that easy, affordable upgradeability is a key selling point. As a result, computers can now be equipped with removable television-tuner cards that can be updated as more advanced forms of DTV become available.

By comparison, consumer-electronics manufacturers have always wanted their customers to buy a complete new product rather than only part of one---a daunting prospect for someone contemplating the purchase of an $8000-$10,000 HDTV. The long life and reliability of modern TV sets are qualities that actually work against the mass acceptance of HDTV. People are reluctant to make expensive long-term commitments to a format that might change or that might not deliver all it promises. The McLaughlin Group believes that computer-monitor makers can bring HD displays to market for $3000-$4000, and possibly for much less.

In addition, opportunities for alternative, Internet-based forms of programming become stronger the longer it takes for DTV to become a reality, according to co-authors Ron Cooke and Chuck McLaughlin. Another important factor is the ever-increasing communications bandwidth. Both of these factors will drive the need for hi-def widescreen displays.

The authors agree that the potential for DTV is enormous, but not in the one-way delivery of programming as envisioned by the system's designers. "Our industry survey of more than 150 specialists indicates broad support for the implementation of DTV, multicasting, datacasting, and two-way digital services to the home. Such content will become widely available by 2003, which will create a huge demand for widescreen displays. Although the FCC's DTV ruling can be regarded as a 'trigger event' that forced the digital era on the entertainment industry, the real long-term force behind DTV is the Internet."

Except for the 16:9 aspect ratio, computer monitors already offer DTV-ready displays (although most aren't large enough to satisfy the needs of a true home theater). It won't take huge engineering leaps to get wider monitors to market, and, with intelligent pricing, it won't take much salesmanship to put them in consumers' homes. By 2005, more than half of home PC monitors will be 16:9. The McLaughlin Consulting Group claims, with well-reasoned justification, that DTV and Internet multimedia "will be for the next decade what the PC was for the '90s."