When james nelson first experienced high-definition television (hdtv) in Tokyo in 1988, the Sydney film buff was hooked on its clear, sharp images. So when digital transmission began in Australia on Jan. 1, Nelson was one of the first in line for a set-top box decoder. "The retailers I visited had set it up inside a cabinet-with the door shut," he says of the $A700, vcr-sized box that now sits on his wide-screen analog TV set. While the new box has improved Nelson's regular reception, it provides only standard-definition (sdtv) digital images. "I'd replace it with an hdtv set tomorrow," he says, "even if it cost $A20,000."
The prospect of dazzling pictures and cinema-quality surround sound isn't the only reason digital TV is being hailed as the medium's most important innovation since color. Because a digital signal carries much more information than an analog one-in images, sound and text-the new system can also provide services that make it a couch potato's paradise. In Europe, digital TV viewers can, with a few clicks of their remote controls or the keyboards now resting on millions of coffee tables, send and receive e-mail, surf the Internet, buy stocks, check the weather, download movies, order take-out food and have clothing and home furnishings they see on TV shows delivered to their door. Digital TV is so multifaceted, according to Australia's communications minister Richard Alston, that "you really could call it a revolution."
So far, the revolution is hardly being televised-or watched. Since it was switched on 10 weeks ago in Sydney, Melbourne, Brisbane, Adelaide and Perth, digital TV has caused barely a ripple in Australia's tightly regulated, free-to-air-dominated broadcast regime. Few consumers have bought the necessary hardware. Little wonder, says Nelson: "The information out there for consumers is atrocious." Scott Lindsay, store manager of Domayne in Auburn, Sydney, says: "Retailers expected to sell up to 1,000 boxes nationwide in the first month, but I doubt more than 300 were sold."
Slowing the spread of digital TV are perceptions that the available equipment is overpriced, onerous rules (broadcasters must transmit analog, SD and HD signals until 2008), and shifting technical standards. Says Australian Consumer Association communications policy officer Charles Britton: "With all the attention being paid to the technology, commercial implications and the regulatory environment, consumer needs have rated a bad fourth place."
To receive digital television, viewers without a digital set need a set-top signal decoder for their analog TV. But since digital pictures are transmitted in a rectangular format, rather than analog's almost square one, consumers who don't want to watch a narrow picture sandwiched between black strips also need a wide-screen TV. That snag has been addressed by Thorn Australia, which rents all its decoders in a package with an 80-cm set.
The digital TV experiment hasn't exactly sizzled in the U.S. either: fewer than 250,000 digital sets have been sold since hdtv was launched in late 1998. Most blame the $US5,000-plus cost of the sets. It's the same in Australia, says Melbourne retailer Alex Encel: "The vast majority of people aren't going to spend thousands to get a better picture." Some manufacturers are more optimistic. Sony and Panasonic say they are planning to bring out HD-ready sets later this year. Sony product manager Alex Streeter concedes that until 2003, when broadcasters will be obliged to transmit at least 20 hours of hdtv a week, consumers won't get the full benefit of the $A8,000 sets. "But they'll be future-proofed for other technology developments."
Ultimately it is program content, not picture quality, that will entice viewers to digital TV. Says Ross Henderson, managing director of Panasonic owner Matsushita: "Why would consumers be interested in buying a digital set-top box if the same program is showing on an analog set?" Commercial broadcasters have started enhancing digitally transmitted programs with bonus information, displaying onscreen recipes during a cooking segment or letting sports buffs choose camera angles and view player statistics during big events.
Digital signals can potentially bring even more choice into Australian homes: instead of five free-to-air channels, there could be up to 40. But commercial broadcasters are forbidden to use their digital spectrum for multi-channeling until 2005, while abc and sbs will have to keep drama, comedy and current affairs off any additional channels. Says consumer advocate Britton: "What we have is a business-as-usual approach that wants to make the digital environment look as much like analog as possible."
It's interactive services that have the most potential to change Australian viewing habits. By 2005, i-TV could reach 80 million households worldwide. But in Australia, restrictions on new players in the free-to-air broadcasting club may limit the i-TV roll-out. Says former Seven Network executive Graham McVeen, whose Online Media Group was one of four companies that recently pulled out of the bidding process: "We have more entertaining interactive content than the free-to-air networks combined, but it's being withheld from the Australian public because of these crazy restrictions."
While Australia's three commercial TV networks all intend to launch interactive services in the next two years, they say they won't focus on functions more suited to personal computers. Says the Nine Network's John Rushton, chief executive of win-tv: "What people really want when they watch TV is to put the old brain in neutral, sit back and be entertained.
It will always be the quality of the picture that blows them away."
Overseas experience shows that in i-TV, pay-TV operators have the edge. They already have the set-top boxes and a direct financial relationship with consumers, "and they're used to supplying programming on a customer-demand basis," says digital TV consultant Malcolm Long. Austar will launch t(television)-mail and t-commerce and interactive games next month, and pay-per-view videos in August. The idea that existing broadcasters will do any more than change their transmissions to digital "is ridiculous," says chief executive John Porter. "They can't even find a workable common standard for their interactive services."
While the networks have agreed in principle to an open standard (known as mhp), it's still being tested in Europe, and manufacturers are reluctant to release inter-active-capable equipment, "when the standard could still be changed," says Nokia Australia and New Zealand home communications manager Bruce Webb. So long as the stations continue to "tweak their signals," manufacturers too will hang back, says Sony's Streeter, lest "consumers conclude digital TV's no good and blame us."
The networks insist they are focusing on customer needs and encouraging program makers to adapt to the new technology. But executives say it could be up to two years before viewers start interacting with the networks. "It's not in our interest to promise too much and have consumers then say digital television is a fizzer," says Judy Stack, chair of the Federation of Australian Comm-ercial Television Stations.
The technology is still so new, says consultant Long, that "anyone who claims to know how consumers will use it is not tell-ing the truth." But in working out what viewers want, he says, "it's better to stumble than be criminally late, as we were with pay-TV." hdtv fan Nelson says the technology is all about choice: "Consumers can dabble a bit, go interactive, or set up a cinema at home." That's the theory, anyway. For now, viewers are likely to stay largely in the dark until broadcasters and regulators announce their next moves. In the meantime, Australia's digital Big Bang will remain a whimper.