Ignore Hollywood,’ Put Consumers First, HDNet’s Cuban Urges TV Makers

HDNet and its affiliates are producing an average of 15-20 hours per week of original HD content, all shot and produced in 1080i, Cuban said. As one example of consumer friendliness, Cuban said HDNet would eschew Hollywood’s traditional theatrical windows in delaying the release of content on packaged media. He said, for example, there’s no reason why HDNet content can’t be released “day and date” on DVD with its theatrical release. Cuban is a partner in the entertainment holding company 2929 Entertainment, which is 100% owner of the Landmark Theaters chain, Magnolia Pictures Distribution and Rysher Entertainment. Cuban also holds a stake in Lions Gate Entertainment. His 2929 Productions subsidiary produces movies and TV shows, while HDNet Films produces high- definition movies. Typifying his outspokenness, Cuban, responding to an audience questioner on what content protection was being used for HDNet movies, said: “I have no plans to protect it at all. Feel free to copy it. Just don’t sell it.”

“I have content, and I have issues,” Cuban declared. As an example of those who he said would put quantity over quality, he blasted cable and satellite providers who think “MPEG-2 is as good as it gets” in HDTV program delivery. In the next 3 years, “codecs are coming along that will give you straight out-of-the camera HD quality and fit it into the amount of space it takes to broadcast over cable, over the air, over satellite -- whatever the case may be,” Cuban said.

As for features he would personally like to see in future DTVs, “hard drive expandability,” whether through an internal or external drive or a slot to accept mega- capacity storage cards, tops the list, Cuban said. “That expandable storage creates all kinds of content distribution opportunities. Having the expandability allows me to raise the content bar. I'm not bound by the size of a DVD.” He said the capability of expandable storage could render the whole Blu-ray vs. HD-DVD debate “a nonissue.” As to claims that the next-generation optical formats were designed to be future-proof for the next decade or more, Cuban said: “Guess what? The quality of content is going to jack up the amount of bandwidth required,” even with the new compression codecs. HDNet “is looking for ways to distribute our content with the quality that maximizes the value of your TV and maximizes the experience for the consumer,” he said. “Blu-ray versus HD-DVD? That whole fight is just going to slow us down.”

Cuban said he frequently urges audiences to “ignore Hollywood” and admits he usually gets scoffed at as a result. “But when you work with Hollywood, you get the CableCARD,” he said. The plug-&-play agreement was billed as the “purest” development possible to spur the DTV transition, but “it’s a mess, and only something Hollywood can love because it keeps things from happening for the consumer,” Cuban said. Of the CableCARD, he said, “not only can you not plug it in, you've got to make a phone call, they've got to come out, they've got to insert the card, then you've got to hope the port you're on works with CableCARD or else they've got to try to make it work, and then it’s still only one way.”

Plug-&-play is ample evidence that to do what’s best for the consumer is avoid “committees,” Cuban said. “Use your brains instead of committees,” he said. “You get what you pay for with committees. Do smart things and others either will try to outdo you or get in line behind you.” Responding to a British questioner who asked what lessons Europeans could learn from the HDTV rollout in the U.S., Cuban said: “Listen to consumers, not corporations.”

Executives with the major set-makers who followed Cuban were left to defend CableCARD, albeit reluctantly. Scott Ramirez, vp-mktg. at Toshiba America Consumer Products, ridiculed cable’s use of semantics in pledging to “support” CableCARD but not “promote it.” Jonas Tanenbaum, Samsung senior mktg. mgr. for visual display products, said his company still believes CableCARD could be the “tipping point” toward mass DTV acceptance, despite its limitations. Frank DeMartin, Mitsubishi vp-mktg., said CableCARD wasn’t the first time cable declined to actively promote a product that brought benefits to the consumer, saying the MSOs were late to the HDTV party. Of the major features lacking in one-way CableCARDs -- electronic program guides (EPGs) and video on demand -- DeMartin said set-makers were building more sophisticated EPGs into CE products and VoD was a service that still is in exceedingly short demand. -- Paul Gluckman

HDTV Forum Notebook…

Cox Cable is taking a “don’t ask, don’t sell” posture toward unidirectional CableCARDs, said Rick Guerrero, Cox vp-broadband engineering services. Cox is offering one- way CableCARDs “when somebody asks for one,” but isn’t actively promoting them, he said: “I guess we're just leery of the customer service experience.” When a customer buys a digital cable ready TV and procures a one- way CableCARD from Cox -- only to discover later it doesn’t offer features like video on demand or electronic program guides -- “we're probably going to be the ones who get beat up for it,” he said: “So we'd much prefer to wait” until 2-way CableCARDs become available “because a whole lot more things can be done with them.” Two-way CableCARDs will provide “a much more robust customer experience as opposed to the one-way cards that are out today,” Guerrero said. Ultimately, the fewer digital set- top boxes Cox needs to buy and “the less investment we'll have to make,” the better, when customers begin opting for bidirectional CableCARDs, he said: “That will be pushed down to the customer and help our capital investment side of the house.”

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It’s a common perception, but “not valid,” that over- the-air broadcast is inferior to cable or satellite for HDTV delivery, said Randall Hoffner, mgr.-technical & strategic planning at ABC. “The quality of the pictures on broadcast HDTV is unbeatable,” he said: “There’s no penalty taken for having a broadcast HDTV signal as opposed to a cable or satellite signal, particularly when the cable or satellite signal is starving for bits, as does happen.” Hoffner said CE retailers don’t demonstrate broadcast HDTV “as much as they should,” probably because most HDTV entertainment programming is concentrated in primetime -- not the peak selling hours for a retailer. “The antenna thing” also works against broadcast HDTV, he said. “Everybody goes into cold sweats when they think about having to put up an antenna on their roof. But a lot of times you really don’t have to do that if you live in a major metropolitan area, and you can put a little antenna on top of your TV set.” The broadcast HDTV industry needs a consumer education campaign to debunk the myths, and the NAB is “the logical body” to lead it, Hoffner said. Some 122 of 210 ABC stations are broadcasting in HDTV, representing nearly 89% coverage. All but 3 of the 122 stations are broadcasting in 720p HDTV and about 1/2 are passing Dolby Digital 5.1 multichannel audio with their HDTV video signal, he said. That 720p, at 60 frames per sec., minimizes motion artifacts is a “much-overlooked” reason why it’s superior to interlaced HDTV, particularly for sports, Hoffner said. “You will just about never see a Monday Night Football game where the guy running down the field turns into blocks,” he said.

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USDTV plans a Sept. 20 announcement on 7 new markets to be added by year-end, COO Richard Johnson said. The total of 10 markets by the end of 2004 is half the target of 20 USDTV previously stated -- itself revised down from the original 29. Johnson said the goal is to add 40 more markets before 2006. The company has more than 9,000 subscribers in the 3 markets -- Albuquerque, Las Vegas and Salt Lake City -- where it launched service in March, Johnson said. He said what’s common to the 3 markets is they're all “ATSC-friendly.” Wal-Mart, USDTV’s lone retail partner, has committed to selling USDTV set- tops in all new markets to be added, Johnson said. USDTV has positioned its service as a low-cost alternative to cable and satellite for customers unwilling to pay $40-$80 per month or more for access to channels they don’t watch. For $19.95 monthly, USDTV provides 12 cable networks plus carriage of all local DTV channels. It’s delivered over digital terrestrial in partnerships with local broadcasters. USDTV will ship 4th quarter an all-format ATSC receiver with a 5th-generation LG/Zenith demodulator, Johnson said. He said the new demodulator will allow better equalization and better filtering on the signal, which will expand the coverage area for all subscribers. Also 4th quarter, USDTV will begin broadcasting with the MPEG-4-based H.264 codec, which will make the service more bandwidth-efficient and allow incorporation of “our own HD content” into the service, Johnson said. USDTV also will intro an HD-PVR option first quarter 2005, he said.

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There’s no “harmonized” schedule for a hard switchoff of the analog TV service in Europe, although it’s believed Denmark, Italy and the U.K. favor a date some time before 2015, Adam Brown, head of the media sector at the European Commission (EC), told the Forum. Efforts to build consensus around a unified analog switchoff date “haven’t borne fruit,” and it’s likely individual EC member states will decide such policies for themselves, Brown said. If ever an agreement were reached on a hard date for switching off U.S. analog service, it will require “braver legislators” in Congress than enacted an 85% DTV penetration trigger “loophole” after strong broadcaster lobbying, said Jeffrey Hart, political science professor at Ind. U., an author of several books on the politics of digital TV. Hart said he was among those who believe Berlin isn’t a model for a U.S. analog switchoff because so few German TV viewers rely on terrestrial broadcasting compared with U.S. counterparts. Japan is targeting 2011 for its analog service shutoff, said Yuzuru Haga, pres. of the Japan Assn. for the Promotion of Digital Bcstg. and a 40-year NHK veteran. By 2011, it’s projected 100 million HD-ready DTV sets will be installed in 48 million Japanese households, Haga said. But giving Japanese authorities pause for concern about 2011 is whether the digital infrastructure will be sufficiently developed for the analog switchoff to take place and whether mainstreamed- priced DTV sets will be available to suit the last of the legacy analog holdouts, he said. He said Japanese authorities believe 120 million analog sets will still be in circulation. Moreover, progress will need to be hastened to whet Japanese consumer appetites for bigger widescreen TVs, Haga said, noting that an estimated 60% of TVs sold today in Japan are 21” or less. On DTV content protection, there’s little likelihood EC member states will follow the U.S. example and adopt a broadcast flag solution, Brown said. He said some EC members were taken aback with the discord that pervaded the proceedings of the Bcst. Protection Discussion Group and their aftermath and were likely to favor more comprehensive content protection solutions that could be applied to many forms of digital delivery, not just DTV. Haga said Japan last April began encrypting digital terrestrial broadcasts that had launched in Dec. 2003 in Nagoya, Osaka, and Tokyo. Consumers who subscribed to the service were given credit card sized decoders as a means of identity authentication and to authorize “copy-once” privileges, he said.