Is There a Sustainable Market Growth in a Tidal Wave of Technology?

When the world’s TV engineers gather in labs and meeting rooms around the world they come up with some pretty amazing things. Look at these beauties: COFDM – Coded Orthogonal Frequency Division Multiplexing or if you are American why not 8VSB – 8 Vestigial Sideband and of course there is the MPEG – Multimedia Picture Experts Group with all their flavors. H.264 and IPTV – Internet Protocol Television and OICD – Open Internet Connected Devices and now can you have 3DTV and, and, and; I know there is a lot more; much, much, much more than we can seem to keep up with! This is becoming troubling because we are all trying to get our minds around the business side of it all! We presently see a myriad of technologies all vying for the same customers for the same end-game with no respite in growth of new technology, yet without businesses to support all those technological advances. Can you actually define an “End-to-End Digital TV Service” today – NO NOT REALLY! You can design many different and all supposedly better then the previous. Fragmentation is increasing and therefore interoperability is disappearing whilst we are creating a Digital TV landscape that is overly complex and scruffy and full of new and better mousetraps.

In this troubled economic climate the real dichotomy of the TV industry is that product vendors that are furnishing their flavor of end-to-end Digital TV systems or some parts of them are posting financial losses or merely making thin gains, whilst the PayTV operators are announcing huge VOD uptake and a rise in ARPU. That is confusing! It appears that the market is too complex and no economies of scale are achievable and that they are being squeezed in this overly competitive marketplace? The technology situation is a particularly disruptive phenomenon in today’s Digital TV market and a probable cause of many of the business issues in today’s totally out of synch global march for the Digitization of Television.

What I am highlighting is that like a lot of other sales oriented businessman I am seeing the awkwardness and headache of delivering mixed, overly complex strategies that are fighting with a tidal wave of technology and the multiplicity of offerings that make up something to deliver just one thing: TV Programming. The very moment we have a system that looks “saleable” something comes along to distract the customer and that is predominantly, first and foremost technology, secondly salesmanship, lobbying and competition, and thirdly either the EU or some other national body like a Competition Counsel interfering or not interfering enough (not mandating and then mandating other bits) themselves duped by lobbyists on what the real way forward should be.

Satellite, Cable, Terrestrial and IPTV have devilishly fragmented the Middleware market; Java versus HTML, Presentation Engines versus Execution Engines; MPEG, AVC, VC1 added to by SDV is now fragmenting the Transmission market; SDTV, HDTV, HDDVD, Blu-ray fragmenting the Picture quality market (formats a go-go), and the underlying chipsets, tuners, Operating Systems and another gazillion technologies all have to follow. Additionally we have to have interesting content on top of that with VOD, PPV, PushVOD, Catch-Up TV not forgetting HD-GUI, Widgets, Subtitling, Close Captioning over HDMI, SPDIF, 1394, USB2 and it goes on and on and on. Then there is DRM, CA, DCAS and lets not forget we saw CableCard and CI Modules and then you realize that this is a lot of technology just to watch television programmes. I pointed out earlier we now even have 3DTV available, and for what purpose not because we need it, just because we can?

The situation is quite clear and it is this; in a market downturn we should benefit from the uptake in TV viewing due to the “stay-at-home” phenomena. However I will say it again; we have to battle ever discovered technology and the distraction that this brings in any market. We have a very difficult market that is failing to deliver huge growth due to the abundance of companies and fragmented technologies all fighting it out in the same sector to become the next big thing. There is nothing wrong with that unless it gets unhealthy, too complex and causes stagnation instead of energizing a market which is supposed to be in transition from analogue to digital. Fragmentation, no economies of scale with sales cycles are getting longer and longer and in some cases we have seen 2+ years before a decision is made. Then the Operator wobbles at the last minute as the latest and greatest (in some cases the oldest and boldest as in MHEG5) technology is promised. Eh! Voila, back to the drawing board. Does CES or IBC showcasing distract decision making processes or any another of our famous technical showcase venues (IFA for example) as everyone offers up ever more trick demos and vaporware.

I certainly do not want to have you all crying into your morning coffee or saying poor old you, as you read this, however when you wandered around the IBC2008 halls and you marveled at the wonderful systems, where you were seduced by the amazing amount of “WORLD LEADERS”, “INDUSTRY LEADERS” and “LEADING SUPPLIERS” (and there seems to be an awful lot of leaders for such a badly fragmented market). Then as you were charmed by the hosts and mesmerized by the promises of the slick salesmen did you ever wonder what the impact of all that information is. If you are not the savvy CEO, Chief Project Manager or CTO probably not! But remember that there will be a day that someone in your organization will have to stick a stake in the ground and commit to a technology even if the next best thing is just around the corner.

I never thought or believed my following observation, however having seen it at first hand I now realize that the IPTV market maybe stealing a march on the TV Market even if only mentally. Our company has been instrumental in laying a foundation in a vibrant Digital TV market in Asia (GEM-IPTV) much to the chagrin of the cable operators in that particular market. We are helping them too but they have to look at WEBTV as a thing that WILL happen and whatever they do it seems the Telcos will continue to offer this service despite the lack of ROI. IPTV or WEBTV is trying to happen again and whilst the Broadcasters and PayTV Operators wallow in the sea of technology those same customers (eyeballs) we are all fighting for (TV Households) are being seduced by the IPTV offers…I would like to think we can all benefit but to do that we must move forward and commit to a set of technologies that will give economies of scale and benefit to businesses and consumers for the sustainability of the industry. What those might be is anyone’s guess! The DVB an organization founded for the benefit of Digital TV has a strategy but even they have a hard time being heard due to the fragmentation of standardization activities worldwide. Someone needs to take control of this mad world and bring some sense and order to the chaos.  BUT WHO?

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