Reflecting on the DTV transition
CEA President Gary Shapiro talks about the 25-year process of bringing the U.S. into the digital television era, and where we go from here.
In the aftermath of the U.S. switchover to a new digital television standard, which became official on June 12, the man who saw it through a 25-year transition, Consumer Electronics Association President Gary Shapiro, likened the effort recently to "putting a man on the moon."
Speaking with CNET News by telephone from his Washington, D.C. office this week, Shapiro reflected on the cooperative effort undertaken by consumer electronics companies worldwide, the U.S. government, and broadcast, cable, and satellite providers. He says the transition was completely smooth but reflects on the bumpy road behind the scenes in getting to this point.
In the edited conversation below, he also talked about the major missed opportunity by U.S. broadcasters, why the CEA was no fan of the free coupon program for digital-to-analog converters, and where he sees the next phase of television (hint: it's not in your house).
Q: You said last week that the DTV transition was "the equivalent of putting a man on the moon." That's quite a comparison. Can you explain why you think this was such a dramatic feat?
A: We first started this in the early 1980s as the next generation of television. (The CEA) along with broadcasters got together and talked about ways to (move to digital). We agreed on a joint effort and a whole bunch of things over time: It was going to be over a large geographic area, both urban and rural, and would meet the needs of over-the-air broadcasters. There were 20 proposals from companies, and eventually we created the Advanced Television (eventually called "digital TV") testing centers. Then General Instruments came in the late '80s/early '90s and had a digital way of doing it. That stopped everything. We said, "This is such a revolutionary thing. We have to look at this again." Eventually everything came around from that.
Was it a harder sell to the manufacturers or the broadcasters?
Manufacturers are always wanting the next big thing. The broadcasters were the biggest challenge by far. They saw nothing to be gained by this. The only argument was, "Look, cable will get there, satellite will get there, and you'll become the inferior medium." They felt they couldn't charge more for advertising in HD. They (eventually) had the foresight to say look, if we're going to do this right, broadcasters can't be left in the dark. And frankly they on their own funded a lot of the testing and research.
But I think broadcasters blew it in that HDTV was their one opportunity to get ahead of cable and satellite in the sense that it was cheaper for them to go to HDTV because they could just send out (an HD) broadcast signal. They just have to invest in the towers. It could have been their competitive advantage. With cable, everything they sell has to be in HDTV. And broadcasters did not push the concept of free over-the-air television and their market share has gone down still to this day dramatically. And along came not only cable and satellite but now the Internet, and soon mobile devices.
(Once agreed upon) in 1996 we went forward and developed the first and best DTV standard. And if you compare that with other places in the world, Japan started with an analog advanced television standard, and they sold TV sets and had to recall them when digital came along because they realized they'd be left behind. Europe went a totally different way. They said high definition is not important, regular digital television is fine, European consumers don't care about the quality that Americans care about. And that also turned out to be a huge mistake, because although their broadcasters were fine with that, along came the satellite people and the TV set makers that started selling high-definition televisions and (high-def feeds). And all of sudden the broadcasters are left out in the cold. So they had to quickly develop their own high-definition standard. So the U.S. is really the first place in the world that did it right and a lot of people are trying to emulate us.
The U.S. was the first actually to transition in such a wide scale way, to all of the country all at once. The Europeans, they kind of did it segmented by geographic area and countries are still doing it. Most of the world hasn't even gotten there yet. So we're so far ahead of everyone at this point and it was unique in that it wasn't only manufacturer and broadcaster but the cable industry got involved, the satellite industry got involved. In terms of the transition itself, we saw 200 different groups, for seniors and minorities and different languages, everyone got involved to educate the public. And we did it right and it's been fabulous, and it wasn't really celebrated, but I think it deserves celebration.
Not really celebrated? How so?
Well, when Neil Armstrong stepped on the moon, it was like, "Wow, here's a defining moment." When we turned off analog broadcasting a couple months ago, it was kind of like the last item in the news. "Oh, it's done." There wasn't any grand finale, it was more of a non-event because by that point you're dealing with the latest adopters and you know, most everyone you know had digital television in one form or another.
There was a lot of angst among policy makers. I say I couldn't deal with members of Congress the last couple years because they thought they'd be thrown out of office because consumers would protest that their TV would be taken away from them. When I've asked members of Congress now how many people they've heard from complaining, senators have told me not one person in the entire state has called their office. So, could be the angst was overblown.
You know, the Obama administration made the decision for the (transition) delay before they were in office. It was acceded to by the Democrats in Congress because here there was this phenomenally popular, historic president...In my view it wouldn't have mattered whether they gave it or not. We would have the same result.
But wasn't the reason that the coupon program ran out of money?
Theoretically ran out of money. They actually never ran out of money until a couple weeks ago. It's just a matter of the way the government accountants chose to count. It was to count every coupon they gave away, not every one that was cashed, which is not traditional in the coupon world. There's a large number that are never cashed.
The government was exceedingly generous. I mean, think about it: you buy a television 15 years ago. Why do you have the constitutional right that it'll last forever? Any other product you use you know that it's likely to break down, service will be stopped. That's just the risk you take. Hell, I signed up for ClearPass to get through airports three months ago and a month after I signed up it went out of business. I wasn't thrilled, but that's the risk you take. So, we were never an advocate of the coupon program.
Well, because we at the CEA have never asked the government for money, especially for our industry. That money is going to our pocket. And we have a position that we believe in the free market and we don't think we should be asking government for special favors for our industry.
So does that mean everybody's gotten a new converter than needs one?
Ninety percent of the population has cable or satellite. And then one out of four families buys a TV set every year. And this has been out there for five years now, and you have (the requirement for) a digital tuner in (new TVs) there for three or four years, all those people have it. So there's almost nobody who's disenfranchised. Now there is a small segment of perhaps and the most sympathetic segment is someone who is horribly poor or old or disabled who wasn't able to afford this, and they had the coupon program. Every survey we've done shows that over 99 percent of Americans knew about the program. So, we've succeeded, and we'll move on to the next thing.
In another 15 or 20 or 30 years there'll be another TV standard. We're working now on 3D TV and certainly mobile TV, which are the two big categories. But I don't think that requires a dramatic change like we've gone through. The really dramatic change the country's gone through is 40 years ago you got three networks over the air and then cable came along and then satellite, and now fiber, and the Internet and there are so many ways of getting that video signal into your home that over-the-air television does not have the power that it used to have. But they are using still a tremendous amount of spectrum. And that spectrum is going to increasingly come under scrutiny as policymakers in Washington try to figure out how we can fulfill this tremendous need that Americans have to have broadband wherever they are. The issues are still going to be discussed in Washington over the next five to 10 years.
You spoke of the next thing, which is 3D, and mobile TV. How do you see us getting there?
Well, one of the most successful products in cars has been the screen in the back for kids to watch. There's no theoretic reason that can't be a mobile device for reception. If you combine it with the Internet, you could have location-based service, if you're driving by somewhere. You have the broadcaster using their spectrum, which gives them an opportunity for advertising, which they otherwise would not have had, and to expand their audience to a mobile environment.
We're very close (to that). You'll see products at CES, which will show mobile television. Many different manufacturers, many different products and broadcasters doing demos in January.
And then 3D television is something which has long been around, certainly Hollywood is very excited about it. It is challenged by the fact that you need special glasses...But people love it. More and more is being done that's 3D capable.
Can you describe where we're at in getting a 3D standard?
Well, CEA has created a committee to look at the standard that's similar to the problem we had with HDTV, where you have different proprietary systems out there. Now Hollywood is really engaged on that, which is very helpful. And the way things work in standards setting is you really need an industry to agree on it, and if they can't, it's fought out in the market place. Sometimes when things are fought out in the marketplace it's very difficult because the consumer freezes--they don't' want to make a mistake like they did with Betamax, or even with Blu-ray versus HD DVD.
It's too early to say which way this will go on 3D now. Everyone's fresh from the HD DVD/Blu-ray battle, and I don't think that's viewed as positive battle for anybody. It certainly inhibited the growth of the technology and the format in a way which wasn't helpful. The government was involved in the HDTV one because it involved spectrum, which is regulated by the government. The government was actually helpful in that standards issue, which is why it was a man-on-the-moon approach. It was such a big precedent, it involved so many industries, the government. They did it right. And that was refreshing.
We're not asking government to get involved in 3D TV or anything else. And I'm not saying we're going to do it right, but we're going to try to come up with one standard, and if we can't the marketplace will, which is fine also.