When DTV first began to materialize, there were romantic visions of consumers embracing the technology, broadcasters excitedly offering services and the world becoming a better place.
Reality, however, has been much different. Even datacasting, which seemed to promise a truly original way for broadcasters to derive revenue from digital transmission, has become mired in talk of chickens and eggs, content waiting for viewers and viewers waiting for content.
"We're all living with the reality of a slower-moving market than we would have liked," says Michael Lambert, co-founder, chairman and CEO of iBlast. "Back in the hyper days of the Internet, everyone thought everything was going to get done in a few months. And today, the reality of the financial markets and the relative gun shyness of the big content companies to try anything new has led to more modest expectations."
But beginning next week, WRAL-TV Raleigh-Durham, N.C., will begin offering datacasting services to consumers that will bring video, audio and Internet content directly to computers outfitted with a PC DTV tuner card and antenna.
DTV Plus, a division of Capitol Broadcasting (also WRAL-TV's parent company), put together a $395 package that includes a DTV tuner card, software, a silver sensor antenna, cables and documentation that will be sold in 10 local retail outlets. For the first time, the components needed to enable datacasting will be marketed to consumers.
"In the early days of HD, there was a lot of talk about multicasting, but people realize that all you do is slice the revenue pie into more pieces," says John Greene, Capitol vice president. "And now the focus is on data. And, if there's a new avenue for revenue, we believe it's going to be data."
"We are taking what I think is a very pragmatic approach," says Sam Matheny, vice president and general manager of DTV Plus. "We want to achieve a market penetration of 1% to 2%. That provides meaningful numbers that other broadcasters can buy into and sell." (But in phase one, Capitol has only ordered 1,000 tuner cards.)
"Our basic approach is that we are going to use TV and Web advertising to drive traffic to the retail stores," Matheny explains. "One thing people do understand is television and folks are beginning to understand the benefits of HDTV, at least enough to know it is the best possible TV available."
At the gate
When datacasting popped on the radar screen, a number of companies and products sprang up to take advantage of the new market. The only trouble was that there wasn't
a market. But datacasters are still making their play.
Brian Hickey, vice president of marketing for Wavexpress, says that the DTV tuner cards remain the gating factor for datacasting services: "Everyone we've talked to on the content side says they love this, but they ask us to show them distribution. ... The first thing that has to happen on the terrestrial side is the understanding that the technology is there, and the second issue is going to be whether there are enough economies of scale to get the prices down to mass-market level."
But Lambert believes the gating factor is the content. Given the right content, he claims, consumers and suppliers will embrace technologies needed to receive datacasts. He notes that movie studios continue to work on agreements that will allow for content from multiple studios to be available via a number of digital distribution methods. The hang-up? Hammering out digital-rights-management agreements that make the studios feel comfortable with offering premium content.
"The DRM solutions are starting to sort themselves out, and that gives the mass-media companies much more confidence that they can use efficient digital distribution systems to get their content into people's homes," he says. "And they're now turning their attention to last-mile solutions of which we feel datacasting is a way to get big, fat files to the consumer efficiently."
Lambert's iBlast is in the deal phase, attempting to put content owners together with manufacturers of PC tuner cards. The goal, ideally, is to create a consumer-product offering that has built-in content value. He fully expects datacasting services to roll out to 40 or so markets in 2002.
One example of this form factor would be something Lambert calls the Movie Box. The hard-drive-based system would be attached to the TV and would cache 25 movies a day for viewing via an over-the-air antenna.
Other ideas include PCs geared toward multimedia applications loaded with games or possibly business PCs that have the capability to receive live ticker and news updates from a cable financial-news network.
Mark O'Brien, executive vice president of SpectraRep, a company helping broadcasters develop business-to-business datacasting business, concurs. "Would Dell or Compaq be willing to bundle in a DTV tuner card if there were something in it for them? Yes, absolutely. So when there's a reason to think they could make more money on PCs by installing the cards, they're going to do it. But right now, all these things are in the conversation phase."
That chicken-and-egg analogy never goes away. Matheny says that with DTVPlus "we're trying to build the hen house." Naysayers waiting for datacasting to happen think that the Raleigh experiment will lay an egg.
SpectraRep is sidestepping the consumer market to get into business-to-business applications of datacasting and has been working with KLAS-TV Las Vegas on ways to use datacasting to tap into the huge Vegas convention market. The company recently signed a deal with Young Broadcasting.
"We're focusing on business opportunities on a market by market basis," O'Brien says. "And the reason for that is lower-hanging fruit that can get us quicker to revenue generation." For example, he says, using digital television to send data to 80 buildings in a manufacturing complex is more cost effective than having that company keep putting in more T1 lines.
SpectraRep provides the necessary equipment (antenna and server) for the content to be received and distributed, which may give it a leg up on other content-delivery systems. O'Brien says, "We do a coverage map of the TV station, and we know where we can sell. We have a vendor that goes out and installs everything, tests it, and, when he leaves, it's working."
It appears that data, on both the consumer and commerce side, is ready to be served. Whether consumers want it is the remaining question. "The goal here is to build a digital marketplace," says Matheny. "Stations need digital receivers in order to begin earning money. We understand that and are constructing unique content/services that can only be received via a digital signal. The bottom line is the PC DTV card is the best way to seed the digital market because it is affordable."