29 oktober 2007

The digital television no show: How the media affected the market opportunity

As have been earlier reported, the digital television growth in Sweden hasn't seen any exponential growth from cable subscribers, despite the fact that some estimated 30 % of the market who were forced to go digital during our transition campaign made lots of headlines in the press during the two years it took to complete the transition. Rather, the growth is showing as being slow-paced and linear, increasing numbers of digital viewers coming both indirectly from new triple play customers and genuinely interested tech people like myself. One really starts to wonder how such a big transition in television broadcasting haven't sparked more interest with the people. Not even much curiosity. 
I believe there must be a good reason behind this disinterest from the mainstream. What is it, though: is it a cultural thing or a lack of innovation and passion from Swedish cable companies? Are standardization issues with DVB to blame, the fact that there isn't a uniformed one-size-fits-all broadcasting technology instead of one for each connection type? (DVB-T, C and S). It might be as simple as the digital transition not focusing on HD channel availability, an area which intrigues far more people than a discreet digitalisation of already running analog channels. After all, on stage in front of the tv viewers there is nothing new going on: they are still watching the same content as they used to do before, more or less, except there is more to choose from at a given moment than it used to be before the transition. There is more content.

Kinks to sort out before digital adoption will grow expontentially
First of all, the television the consumers goes out to buy in their local tv shop (or online) needs to have two integrated slots for digital reception: one for terrestrial and one for cable. Second of all, it needs to "just work" right out of the box and both of them should always allow a basic channel package to be carried out unencrypted for everyone to watch and demo with new boxes or televisions.

Trusting the brand and their hardware-software bundle
After a quick look on price matching websites, I conclude that there are 340 so called STBs (Set-Top Boxes) available for the digital-only alternatives terrestrial and satellite, while there's 23 alternatives for watching analog/digital cable. Obviously there is going to be a problem here, trying to figure out which brand and model to buy among the digital-only alternatives. However, the price competition is unmatched. With digital cable, there aren't many models to choose from because of the fact that there aren't enough customer demand as of yet. Prices are high and the competition is more or less a factor "none to five". Let's think for a second what it means to buy a digital set-top box today: you go to your local tv shop or look online, to try determine which box you want to buy. After 20 minutes you end up buying brand A along with a subscription and bring it home. You install it and plug the cables in. You start to watch some tv as soon as your subscription goes active. But here's the problem: after watching for an hour, the box hangs! The picture freezes and the only solution to get back to watching tv again is to pull the power plug and then put it back in, initializing the box again. You go back to browsing channels for an additional 5 minutes.. and you discover that there's something wrong, but this time it's the channel you're watching having no sound for no obvious reason. Flipping channels and flipping back again fixes it. This is pretty typical and considered "normal behaviour" while it actually never should happen. It doesn't matter much which box you buy into, they all have some little bug that might drive you nuts one way or another. 
This is of course a matter of maturity and hardware vendor responsibility. Some vendors you can trust more than others. Which one to trust is best found on established forums here and there on the web.

Things still needed to be done
* An eye-opener for vendors to provide well-working, high-quality and production stable firmware
* No sneaky subscription contracts (hidden card fees with recurring, annual payments)
* The ability to watch the same content on more than one tv WITHOUT paying extreme extra fees for it (potential soon to be-customers simply aren't tolerating that)

Well, that's pretty much it for now.
Feel free to comment!