From The Street...
Tuesday, April 30, 2002
SMPTE - Napa...
SMPTE 4/27 - Napa
Roy Trumbull of SMPTE San Francisco gave a story about the current and future of OTA broadcasting. He sees it breaking down into two tiers - the Bigs, (300-400 stations) with revenues >$10M per year, and The Rest (1200-some). The cost of converting to DTV ranges from $4-6 million. Not many banks are interested in loaning this to organizations with less than $500K net revenues annually.
Less than 30% of households get OTA broadcasting only. And these folks tend to have lower income: Those with less than 30K are about one third of the OTA-only homes. Those making more than $75K are only 10% of that group. Less than 57% - and declining - of homes are watching the seven major OTA networks during Prime Time. Roy thinks broadcasters need new ideas to present a credible alternate to qualify for "must carry" slots on cable/DBS. rhtrumbull@earthlink.net
Birney Dayton, Nvision's president, in the process of being acquired by Miranda, gave his view of the future for broadcasting at the same Napa Valley SMPTE meeting. He bravely reviewed previous "futures " presentations he had made in similar forums in 1994 and 1996. His thoughts are reflected below:
In 1994 he said: an HD mixer is soon to be software; and indeed, current SD solutions, like the GVG Kadenza and Zodiac are now mostly switching and server NT software.
Production costs "in front of the camera" will have to be reduced - be they ballplayers' salaries or movie star prices. Technology has reduced the "actual" distribution costs so that cheap DVD and CDs are possible, but until the upfront production costs can be reduced, we'll continue to see Scary Big Brother Creations (like the current Michael Eisner/Fritz Hollings Senate bill) to prevent digital content from being copied. When overall costs can be reduced to where it is easier to buy a "copy" than to go to the trouble to make your own, content ownership compensation will get straightened out. Mebbe the car manufacturers have figured this out. One interesting solution is to provide "All Music Ever Recorded" within a car radio on holographic storage; coming in a few years.
ADSL is the phone companies' way to try to not add more phone lines. It now costs $40/month to install and maintain a new line - but the basic regulated revenue rate is about $13.
What's needed for true wideband content distribution is "IP Broadcasting" - and the structure for this won't be built until the "next" Internet on IP version 6 is in place. A system built to transmit packets of telephony audio using time insensitive data is necessarily limited in switching ability and bandwidth. ADSL is a bunch of people sharing a T1 line, and when they all load up to watch HD, things will slow down and probably stop.
The true current costs of ADSL with a "dedicated" T1 line are about $200/month, so the price point needs to be around $400 to make the telcos happy.
Fiber extended farther out is getting more attractive quickly. But where will the money for this come from? QWEST is reported in trouble. SBC and Verizon are not in good financial shape. Telcom as a whole is heavily in debt and their decreasing cash flows from their primary business - voice telephony - are falling fast and can not keep up with their debt service requirements.
Wideband video distribution needs point to point - or point to many points - distribution. One medium sized broadcast station with a 256 squared router has 380Gb of thruput, more then the fastest ATM (26Gb- two OC192's) packet switcher/router. One source estimates the bandwidth of the entire Internet is 240 Gb. Hmmm…And the existing IP hardware/infrastructure is three stage switching with "blocking", not a simple one-in to any/many-out(s) needed for "broadcasting".
Interactive TV? Only games have been somewhat successful in this area. The problem is that it mixes the "models" - The TV model is a social one, sitting with a friend and leaning back and enjoying what comes out to you. The Computer model is an anti-social one - one person in control and closely interacting to what comes out, "leaning forward" and tuned out to others.
The issue is not if there will be broadcasters, but who will own them; who will own the channel and develop the model to print money.
Fiber to the home will take more than 20 years to complete. Current telcom infrastructure "plant" has a forty-year service life, and new homes are still getting new copper lines installed. Trillions of dollars are now invested in telcom plant, which is not likely to be ripped out soon for any reason. Not sure how either Moore's law or Metcalfe's law of networks or Whomever's law of Storewidth (if you go to the store a lot you increase your width..) can work in this particular situation.
HD on DVD will go forward first and soon. Support coagulating around different format solutions - Blue Laser seems to favor manufacturers who get to sell new more expensive playback units. This may drive broadcasting into finding its place by exploiting it's uniqueness - distributed localized bandwidth. Cable and satellite do not have the bandwidth for widespread HD.
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Birney is a very interesting fellow…
Sunday, April 14, 2002
NAB takes...
I went to a dinner with engineering people from all parts of the business Wednesday night at NAB. Several attending will write up the specifics (Craig Birkmaier, Larry Bloomfield from Tech Notes); but here are some interesting things heard and learned.
"It looked like the death of 1080i…" Not many new products featured interlace; indeed the hits were imagers and such that let any scan rates (all progressive) be used as a creative tool.
"Thank you for uncoupling image acquisition from a video format", said one speaking to the Thomson-Viper FilmStream Camera folks. "Just give us the bits…" The Viper is two or more steps forward, but one step back. Listening maybe too hard to DP's in Hollywood, immediate quality pictures can no longer be seen on the set, just like film. The goodies to make it look right and like film are applied back in the "lab" in this two step process. "Just focus and frame, all the rest we'll do in post..." Hmm..That will require some rethinking. Lots of complexity, but results are images that "compete" much better with film, they say.
The ability of progressive cameras to use lower scan rates for more pictures and higher resolution vs. "real time" high rate scans where motion is more important, is a working variable for folks like those running the unmanned drones now used by the military. "The Hit of the War", said one," is live battlefield video". It used to be days from the time a picture was taken by a satellite, then dropped in a canister from space via parachute, to be snatched in mid-air by a plane with a wire-basket front end, and then developed and forwarded to the concerned folks. That "latency" is now in the order of minutes.
Lots of emphasis on capture to disk, as tape evolves to its rightful place as an archival component. With DVC Pro cassettes holding 160 Gb, 1.28 Tb can be stored in a multideck one-rack-unit-high device. $1/Gb was a figure thrown around.
"Broadcast is now < 20% of our business" said one industry exec; indeed a good part of Panasonic's booth was devoted to commercial and industrial uses for video products. Their "Box Camera" (half a Saltines box?) self-contained three-chip SD/25Mb at 30P for $3K attracted a lot of attention.
"Never attribute to malice what can be explained by ignorance" was the best line of the night, from Rob Koenan of the embattled MPEG4 LA committee. Frenzied discussions about the proposed fee structures are holding up progress, including release of Apple's latest version of QuickTime.
"No direction from Sony…" - and they also laid off some people. But they did not flinch on the booth…huge, with deep product lines for all applications. "Sony is committed to taking all business regardless of price" say disgruntled competitors. Well, at least their execs are no longer publically complaining that their customers are not "going digital" fast enough and not buying. Hubris anyone? Leitch and Pluto (remember them?) had similar complaints about their customers earlier. Those execs are long gone.
Quantel used to champion unique features, way beyond competitors, done in real expensive proprietary hardware. In what one called a "most dramatic reversal of fortune", they are now offering software that runs on general purpose processors. New ownership with employee involvement is credited with this probably life-saving change in direction. Now they encourage and supply tools to allow laptops to run paint and news-edit solutions.
With content license fees and talent prices at astronomical levels, more broadcasters will do more of their own production in house, including over 50% of fall prime time at CBS.
Attendance was way down. Great for those who did go.
Gilder on Foveon - again...
Not to sound like a shill here, but after seeing all the buzz at NAB last week about the new Thomson Viper Filmstream Camera, the following article from the American Spectator Owner George Gilder is an attractive contrarian view: The Cat and the Camera - G. Gilder
The future of imaging is in analog devices. A system with the size, complexity, power, delays, computations, etc. necessary for digital pictures better than the eye can see - like the Viper - is not the answer. Listening to the technology of both the eye and silicon materials, an imager based on a neuromorphic approach, a device designed to behave in the analog-neural network manner that the eye itself does, will prove superior.
"They laughed out loud at my assertion, borrowed from Mead, that the absence of digital optics in the brain—to this day, the world's only fully successful image processor—cast serious doubt on the prospects for digital image processing."
"Foveon has the single most powerful new commercial technology I have encountered since first meeting Mead...generations ahead of existing digital cameras and video recorders. And thus it will dominate the next era of the Net, as the broadband vessel of images and videos superior in resolution and quality to the finest film images, but as portable as a Web page."
" 'Neuromorphic analog VLSI' offers the possibility of a radically more effective image processor. Neuromorphic means derived from human models rather than from mechanical logic; analog means continuous representations by currents and voltages, rather than by digital math; VLSI signifies the kind of tiny geometries characteristic of leading-edge digital devices, such as the microprocessors that run your personal computer - tens of millions of transistors on a fingernail-sized chip."
Monday, April 08, 2002
Monday - From the NAB Show Floor
Layoffs all over are rumored: Harris/Louth, Sony, Panasonic and some initial adjustments at GVG/TMM. The first three haven't made their revenue projections and corporate policies now say adjust spending levels accordingly, right now. GVG made money and targets for several quarters in a row before acquisition, although business all over was generally flat. Other non-conglomerate companies usually take a little more accounting latitude - or at least they used to before the Arthur Andersen stories broke. "Proforma" results and EBIDIT and other accounting dance steps will now be harder to use.
Very noticeable are the fewer exhibit booths, smaller crowds, and shorter lines. "I've never have seen the business this bad all over", says one camera sales manager, in the business since the mid-seventies.
NVision's new owner is Miranda of (French)Canada. Anyone else here see a pattern here? More money and product latitude for Nvision; not sure the Real French will follow suit elsewhere…
DaVinci "founder" Mike Arbuthnot got pulled back after early retirement to resteer the ship. Dumping the commodity-like hard disk business was a start. Now, like others, they are looking for the next next thing. Maybe services not hardware? Family Heirloom Wedding/Bar Mitzvah films to tape? Restoration of old film assets as a service partner? Lots of interesting possibilities.
Compression.
Heard the Pulsent story. Heard the Demografx story. Heard the Harmonic and Tandberg stories. Different views and different target markets. Those deep into the market temporally (i.e. they've been selling products for awhile) have legacy customers and infrastructure in place, and the benefit of Real Customer Experiences.
Are the new guys really disruptive? Would you pay more for better pictures? Lotsa industry folks bet yes with investments in DTV/HDTV stuff, and are unhappily still waiting for the payback. Others listened more to customers and gave them "good enough" quality, but many more choices. Hmmm…DirecTV is huge, and the competitor , Echostar, is still able to borrow billions to buy them out. Valuations of "build quality and they will come" outfits have not fared as well. Can "better, more efficient" compression beat "good enough" unless it's a lot cheaper?
Video over DSL for phone companies is a current hot topic. Getting more out of existing copper cage is a great short term strategy for telcos while waiting for their phone revenues to dry up completely and cause default on their massive debt. Right up there with Gilder as an entertaining and SMART fella is David Isenberg. He looks at the Stupid Network Paradox in a recent paper. Note the Foveon picture. David Isenberg's Home for Stupid Networks and SMART People
Compression of video, and "efficiency", are being accompanied by reduction in the costs of the hardware that does it. Storage is becoming cheaper; bandwidth is cheaper. Will these curves cross? Or, will new voracious applications, like Real Hollywood Big Screen Movies and The Videophone Service We Were Promised Long Ago arise to gobble up the Storewidth Glut? Nobody ever tried to "save" transistors" on a chip - they were cheap and "free" - so more were wasted to add value. In Storewidth, how long will "bit saving" be used? Until bandwidth and storage are free?
Gigabit Ethernet to Lambda passive router architectures are five years out, say some incumbents. Wonder what the innovators say?
Sunday, April 07, 2002
NAB Las Vegas
Beginning my thirtysomethingth NAB.
Business is "flat". Too many server manufacturers. Customer selection now is more dependent on service and "today's" features. Buyers of large systems who insist on multiple hardware backups and redundancy, seem to have different requirements for software. The key to them staying on the air during an update, for instance, is locked in some part-time contractor/fella's head; and nobody really wants to go there to document it, must less change or patch, what works now.
Many customers are leery of the expected revamping of GVG by Thomson. The inexorable demands of economies of scale, elimination of duplication of sales, products, and administrative overhead will be implemented–after all, that's why such deals are made in the first place. European labor laws preclude wholesale dismissals, and hundreds are expected. (indeed, one delay in the process, discovered only at the last minute, happened because no one informed the French labor unions, as the law required). Pessimists note that French won't be let go; and probably neither will Germans; some Dutch were, the last time. So the bulk of the reductions might have to come from the less socialized countries, like the USA. Hmm.. But if you're out on the end of the chain, buying a product that may be phased out, or dealing with a person who's made commitments to you, but who may not be around for long – well, it's hard to appreciate the "efficiencies" achieved.
The drive to replace one of broadcasting's most valuable brands is in full forward gear, despite brave attempts to tell the story as simply finding a new and big investor. Tektronix bought GVG and left them alone completely for twenty some years. Seems things no longer work like that. Competitors are jumping gleefully on the turmoil, chipping away at the deep brand equity that's now starting to erode. One need only to consider the previous Thomson/Philips takeover, to see what's coming. The empty prominent GVG booth space here drives this point home this week.
Compression. Lots of alternatives to MPEG are being touted. Some proprietary, some open; some in custom hardware, some in general processor software. Lossless, a seemly simple term, takes on new meanings. Visually, virtually, mathematically, practically, "VHS" - and many other superlatives are bandied about. Some demos here this week should expand the legitimate and practical choices available. Any guy with a clever algorithm can do a simulation. Getting it into a product and satisfying a customer is usually a long painful process. (Teranex and Agilevision come to mind)
Fewer booths, fewer people, lots of political and economic no shows. Touts, including taxi drivers, say 115K; others say less than a hundred.
Tuesday, April 02, 2002
Digital Asset Management...II
Ok. Time in.
Lots of people are displaying interest in this DAM business, a reassuring development to many new entrants: Mebbe we are on to something, since so many folks want to get into this. Applications are all over the map, extending far beyond Broadcast Television. Medicine, Law, and, well, Most Everything. With most IP (intellectual property) assets now digitizable (into information packets, sent in internet protocol formats...), visions of emptying the full basements of old but still mebbe valuable stuff attracts lots of talk and, soon, the ultimate clue that a subject is "hot" - a Conference.
It helps that no two outfits can agree exactly on what DAM is; define your own business; create your own customers; what a concept.
Documentum ( who recently purchased Bulldog) is one of the participants with Sony and IBM in a recent DAM-The-News Project for a major cable network. Listening to their CEO's Web Address is a clinic on How To Speak Dotcom: we're talking way beyond making adverbs verbs here (for those of us old enough to remember Parts Of Speech and Diagramming Sentences), or using "space" or "leverage".
" Grow is an intransitive verb, and never has an object" says one wise listener. "Grow the Business" ain't right... Simply amazing. Here's a link to a story today about buzz words. Mercury News | 04/02/2002 | Peter Delevett: Buzz phrases that deserve the dust bin
But again, I digress.
What to save? "Everything. It's for History, and All That We Have Done Will Be Significant Someday...". Who will buy it/ where are the New Customers and Cash Flows? Or How Can This Stuff be Sold to Our Existing Customers For More of Their Money ? Not trivial questions; no simple answers. Yet.
Probable customers for this "service" in the entertainment business (Hollywood, Television networks, etc.) have long hoped for an economic justification to save their old stuff. ABC has 1.5 million hours in a basement in New York: this is a high priority project to Get This Problem Solved - and has been for Five Years. Great for the on-going consulting folks helping them, though. But , every year Management says Show Me The Money, and no one can; so ther $$ for the Transfer of Jim McKay circa 19xx does not get approved...and there it stays.
It's easy to get diverted onto the Well, What Media Should Be Used track, learning the reality that after fifty years, (or even 15 years...) "machines" that will handle the chosen physical media on which this will all be stored will not be around. So what to do? A permanent, long term migration plan to the current, most dense/economical storage medium, re-doing it all every few years or so? Not real attractive for content that has no obvious commercial value, now or in the forseeable future. Large company "archivists" say their CFOs want to see business plans that generate new cash flows before spending much on getting all their stuff digitized, stored and "managed"; and that these are hard to come by. Sure, the Ed Sullivan family, with rights to all his old shows, found a market - albeit in the permanently-begging-for-revenue network of public tv stations; but that's the general idea. Wise equipment manufacturers long ago figured out that PBS stations that Get Excited About Specific Things and can raise the money for the stuff; and thus many deals for DTV equipment have been funded. Hmm...Local is Better....
NAB in Las Vegas next week will "feature" many companies' attempts to put their arms around this DAM opportunity and define their "solutions". Filtering out the rhetoric, perhaps some will begin to see The Real Problem; and, perhaps, The Real Solution.
