iSuppli: DTV eschews its analog Achilles’ heel

[Gregg Lengling]

By David E. Mentley, iSuppli/Stanford Resources


Although Digital Television (DTV) has overcome most of its problems and finally has entered a growing stage, the product, since its inception, has suffered from an Achilles' heel: the analog interface. The fact that these TVs, until recently, have only come with analog interfaces means that despite all of the efforts to produce and distribute digital content, the signals end up being converted to analog before they are viewed by consumers.

During the years of standards battles and foot dragging, DTV promoters failed to agree upon and implement a specification for a digital interface, although the savvier players all knew it was required. Thus, the shortcomings of the analog interface were never addressed and certainly never explained to consumers.

The lure of being able to view sports or new film releases in High Definition TVs (HDTVs) has lured millions of US consumers to buy new large-size DTVs. Most of those consumers took those DTVs home, plugged them into analog connectors and have been quite happy with the results.

However, what few consumers know is that a digital interface for DTVs can provide immediate benefits, including displaying the best possible picture.

DVI to the rescue

Starting in late 2003, this situation began to change as the Digital Visual Interface (DVI) input arrived on the scene. In a short time, DVI has become almost ubiquitous, with nearly all DTVs or DTV-ready sets sold now including at least one DVI input.

As is the case with PCs, new interfaces in the TV world are readily added – but very slowly, if ever, removed. This means that all of the existing and legacy inputs and outputs will still be around for years to come.

The TV business is large, conservative and much slower to respond to technology innovations than is the PC business. Thus, while a digital interface makes overwhelming technological sense, the reality of the marketplace is that it took several years to gain widespread adoption and acceptance.

DVI's plusses and minuses

The arrival of DVI is partially good for consumers.

On the plus side, DVI inputs allow viewers who have DVI outputs on their DVD players, cable and satellite set-top boxes (STBs) to seamlessly connect them to their new DTV sets and be assured of the best-possible picture given the equipment. The list of DVD players with DVI outputs is increasing quickly, but the number of providers of DVI-enabled cable and satellite STBs is growing much more slowly.

On the minus side, DVI will bring High-bandwidth Digital Content Protection (HDCP), which will limit consumers' ability to copy content.

HDCP is included in most, but not all, DVI TV inputs. This feature will be indispensable for displaying HD content that comes through the digital connector, if the content is so encrypted. Of course, the analog inputs, even the high-bandwidth RGB and component versions, will not be affected by HDCP and viewers will still get a good-quality picture.

The same facts apply to digital over-the-air broadcasting of standard-definition and HDTVs, digital satellites and digital cables. All of these digital delivery methods terminate in the TV as an analog signal. Except for a few proprietary interfaces, there have been no serious attempts at standardizing a digital interface for the DTV, until the arrival of DVI.

The TV as a monitor

An interesting and accurate way to view the TV set is as a monitor, rather than as a receiver.

However, this is not a popular marketing approach because consumers have been offered high quality video monitors in the past and have rejected them overwhelmingly. These monitors were simply higher-quality TVs with the tuners removed.

In fact, many TVs today are used as monitors. When a TV is connected to a VCR, DVD player, satellite or cable STB, video game console or even a computer in rare cases, it is being used as a monitor.

With over-the-air broadcasting becoming a minor option in the growing array of content-delivery choices, the use of the TV as a self-contained receiver is diminishing. In addition, as the source material moves toward ever-higher resolutions, the need for a high-bandwidth interface increases.

The standard analog interfaces, composite and even S-video, are limited in their information-carrying capacity to less than what is demanded by the HDTV formats – i.e. 1,920 by 1,080, and 1280 by 720 – but are fine for 640 by 480 and 704 by 480.

DTV faces realities of broadcast world

The Federal Communications Commission (FCC) schedule mandating a digital tuner accompany analog tuners may actually cause a return to the monitor model for the TV.

The high penetration of digital cable, satellite and DVD players is not what the FCC envisioned when it generously and hopefully handed over a huge slice of electromagnetic spectrum to broadcasters with the gentle suggestion that they use it to deliver HDTV to the masses. It is not happening as planned.

The number of households capable of pulling an Advanced Television Systems Committee (ATSC) HDTV signal off the air is estimated at about 1% now. With the FCC scheduled to pull the plug on analog broadcasting in two short years in 2006, one might think that America would be in a panic.

But alas, no one – except the FCC – is concerned. The reason is that consumers who are truly interested in HDTVs are getting it through cable and satellite and will not even notice if local analog or HDTV broadcasts go dark. They will still be receiving films, ESPN, Voom HDTV, network feeds and plenty of HD and near-HD quality programming without ever having to put up an antenna.

Broadcasters get the shaft

Local broadcasters obviously are in trouble as they face ever-increasing competition from cable and satellite services that offer many more channels.

Local broadcasters did gain the benefit of the free spectrum with for delivery of HD programming, but they also paid the bills for upgrading studios, transmitters and towers so they could deliver HD to an unwilling audience. That is why the broadcasters fought so hard to require cable operators to "waste" their own precious bandwidth on delivering HDTV to a miniscule viewership. By doing this, at least the competition would be stuck in the same boat.

FCC tries to mandate demand

To solve these problems, the FCC is attempting to force-feed broadcast HDTV to consumers by trying to make them buy it.

However, no one has ever successfully forced customers to buy something that they do not want in a free market economy. Perhaps DTVs will be different, but it is unlikely.

After July 1, 2004, all TVs with NTSC, i.e. analog tuners, that are 36 inches and larger will be required to have an ATSC digital over-the-air decoder. In 2005, the cutoff will drop to 25-inches.

In 2007, all TVs of 13 inches and up as well as VCRs, DVD recorders, tuner cards for PCs and all TV tuners will have to be ATSC capable. The same kind of planning is now in various stages in Japan, Korea, China and in much of Europe. Policy makers in those regions would do well to study the US case first.

DTV scenarios

There will be two possible outcomes of the FCC mandate – and neither of them will be the intended widespread adoption of broadcast HDTVs.

The first potential outcome will be that TV receivers, tuner included, will become TV monitors, without tuners. In fact, this has been the de facto standard configuration in most homes for decades, as mentioned before.

Consumers will not like paying $100 to $200 for a digital tuner they will never use.

The second likely outcome is that this schedule will be scrapped and will be delayed to a more reasonable date, such as 2011, in order to provide an orderly transition. The FCC already is calling the 2006 cut-off an "aspirational" date, and not a deadline. This type of softer rhetoric from the FCC will become more common in the coming months as local broadcasting continues to lose ground to satellite and digital cable.

Whatever happens with the FCC, DTVs will continue to sell, iSuppli/Stanford Resources believes. And with the DVI connection now in place, DTVs now can be labeled as DTVs – honestly.

David E. Mentley is senior vice president at iSuppli/Stanford Resources.