As an executive who has worked to develop digital television in both the consumer-electronics and broadcast-equipment industries, Bruce Allan has a unique perspective on how the DTV transition has progressed and the challenges that lie ahead.
So far, so good, says the 57-year-old president of Harris Corp.'s Broadcast Communications Division and a former top executive with Thomson Consumer Electronics. "A lot of things that have happened are market- or customer-driven. We've got about 4 million sets in the marketplace, and we expect that to grow again this year. Each week, there are about 102 hours of broadcasting in high-definition, and 72% of households are covered by a digital signal. It's getting to the point where the consumer is getting involved with this."
Allan has been involved for a long time. After starting at RCA Consumer Electronics, Indianapolis, in 1970, he served in various marketing, product-planning and sales roles before rising to vice president of strategic planning in 1985. Subsequent high-level jobs within Thomson Consumer Electronics led him to Washington in 1994 to work on the U.S. digital-television standard, as vice president of technology and business development for Thomson Multimedia.
When Allan left to head transmitter manufacturer Harris in 1997, his biggest challenge was adapting to the scale of the broadcast infrastructure market. "I was coming out of an industry where we were selling 25 million TV sets and 44 million audio products. Then I came to a business with 1,688 customers; that's your customer base."
However, the lessons Allan had learned about managing costs, driving profitability and meeting customers' needs were still applicable at Harris. He also knew that an open dialogue between the consumer-electronics and broadcast industries would be essential to DTV's success. So he worked with CEMA (now CEA) to organize "DTV in the Desert" at the 1998 Consumer Electronics Show in Las Vegas, an event that brought broadcasters and set manufacturers together.
"That's one of the challenges we faced," Allan recalls. "There were a lot of issues, and it was important to get information flowing back and forth between people who may have a different perspective, so these issues can get aired."
The controversy over the DTV transmission standard in 1999-2000 was a good example of the need for communication, he says. "We saw a lot of that when the standard was challenged and all these issues on tuner reception and tuners were brought up. It was made a major issue, and some good came out of that. What our broadcasters needed to understand was the standard was not fundamentally flawed, but there were some issues that required good technical solutions. If there was an unfortunate part of that debate, it was that it slowed the industry down and cost everybody about a year."
Misinformation is still a problem for DTV on the retail sales floor. Allan points to a Harris visit with an Indianapolis couple who complained about the pictures on their new 40-inch HDTV set: Actors' heads were getting chopped off. He found that they were watching standard-definition DirecTV pictures in the set's "expand" mode and didn't have the necessary antenna to receive DirecTV's HDTV programming or local HDTV broadcast signals, despite paying for a professional installation.
"Despite everybody's efforts, an awful lot of education has to be done with the CE retailers on how this works," Allan says. "There is no consumer information as to what's available, and this is far enough along now that consumer education needs to improve."
One reason consumers are confused, he believes, is that DBS companies, cable operators and set manufacturers have used "digital" to describe so many things. Though encouraged by the efforts of MSOs like Comcast and Time Warner to promote HDTV service, Allan says an industry-wide agreement to carry local DTV signals on cable is still needed for the mass adoption of DTV.
Another benchmark issue is a "broadcast flag" to protect HDTV programming from unauthorized copying. "We've got to find a way to protect a broadcaster's signal and a way for a consumer to receive it and make a copy for individual use in some form," he says. "It's one of those things that would go a long way toward getting more HDTV content out there."
In the meantime, Harris's broadcast business is progressing nicely. The company has sold 700 DTV transmitters, including a low-cost entry-level system aimed at small-market stations, and expanded into other DTV-related businesses, such as encoders and automation software. Harris also sells radio transmitters and runs a large systems-integration business. The company has $355 million in annual sales, a healthy increase from $200 million in 1997.
"From the Harris standpoint, we want to be a transmitter, software and services company going forward," says Allan. Automation software currently represents 10% to 15% of Harris's business now; he would like to see that double in five years.