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| TV over Broadband in Hong Kong...Right Now | |
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Interesting article by Dan Gilmor in the San Jose Mercury on TV over broadband in Hong Kong at http://weblog.siliconvalley.com/column/dangillmor/archives/001564.shtml HONG KONG If the future of television is taking shape here, our choices of programming appear to be nearly infinite. But whether we have flexibility and freedom in how we use those choices will be someone else's decision. If a new digital age of television is emerging, it may look a lot like "Now Broadband TV," a service launched earlier this fall by PCCW, Hong Kong's dominant telecommunications company. By year's end, it should have more than 200,000 subscribers, and could have as many as half a million in 2004. Hong Kong is probably the world's most competitive telecommunications market, and Now Broadband TV is one of several television operations here looking to compete in the pay-TV arena. But this service has some distinct advantages, not least its backing by PCCW, which sees it as an add-on more than a stand-alone offering. The PCCW broadband-TV service, one of the first in the world , doesn't use cable-television lines. It uses the copper phone lines in people's homes, most of which are capable of truly high-speed digital subscriber line (DSL) data connections. Unlike the United States, where DSL customers are limited to speeds well below a megabit per second, the vast majority of Hong Kong's DSL subscribers have connections at 6 megabits per second. That's fast enough to devote 4.5 megabits to a TV channel and still leave ample Web-surfing capacity. That's just what PCCW has done, guaranteeing TV-quality service for the channels it offers. The company reconfigured its own central offices and is requiring broadband-TV customers to install special set-top boxes. In most of the world, cable systems have large numbers of customers and negotiate with programmers on an all-or-nothing basis. They've trained viewers to believe the best way to get programming is to pay a flat fee for a grab bag of channels chosen by the company. A la carte By contrast, the PCCW service, which launched with 23 channels including some U.S.-based programming (a few more have been added), is entirely a la carte. Customers don't buy a package of channels for a monthly price. They buy whichever channels they want, and pay a monthly price for each. Channels range in price from about $1.30 to $5 a month, and higher in a couple of cases. PCCW and its content providers share the revenues in a formula that isn't disclosed. It was done this way partly out of necessity, says Mike Butcher, PCCW's chief operating officer. Now Broadband TV was a new entrant in the market, with fewer channels than the local cable company could offer in its package -- which included some popular channels that the cable operator controls exclusively by contract for the next two or three years. Making the best of the situation meant providing the installation and set-top boxes at no extra costs, and the pick-your-own-channels service gave Now Broadband TV customers a way to start using the system at a relatively low cost. This approach is appealing in many ways. First, it gives the choice to the customer. Second, it allows the operator of the system to slice programming into some smaller niches where the audience might be smaller but where there's still a way for everyone to come out with what they want -- revenues for the programming company and the delivery service (which is what PCCW becomes with this system) and, of course, cost savings for the home customer. PCCW has enough capacity on its own systems to offer hundreds of channels. If the company is smart, it'll encourage local media entrepreneurs to create niche channels, including some public-service channels. I can easily imagine a Hong Kong-oriented channel devoted solely to the city's cultural scene, or its phenomenal food. Or maybe the schools and universities could team up on a channel for showcasing student concerts, plays and other events; perhaps parents would be willing to pay a dollar or two a month for that. This is an entirely different model from trying to get onto a cable-TV operator's system. And it might produce true variety in programming. No recording But for all the possibilities, PCCW's service is burdened by some of the most stringent control-freakery I've seen in the TV world. If you want to tape one of the TV programs to watch later, forget it. You can't. Period. The set-top boxes, based on DVD technology (many contain DVD players), have digital and analog outputs. But because the providers of the programming have been so paranoid about copying, PCCW has turned off customers' ability to make even personal copies, whether digital or analog, of anything on any of the channels. "It was a significant factor with a number of the content providers in giving them increased security of intellectual property, particularly in this part of the world," Butcher says. High-profile programmers, including an MGM movie channel, said they wouldn't do a deal if any copying was allowed. Maybe, with some future channel, the conditions won't be so strict, Butcher says. PCCW's lockdown prompted a letter of complaint to the editor of the South China Morning Post. The correspondent wrote: "Recording is essential to many viewers as it is generally difficult for busy Hong Kong citizens to watch TV according to broadcast schedules." I'm with the letter writer. Denying customers the flexibility to make even a lower-quality analog recording of shows takes away much of the value of the a la carte programming model. But this is the way Hollywood and the copyright robber barons want the future to work. We'll get to watch what they produce on their terms, or not at all. To imagine that analog copies from Hong Kong TV systems are anything remotely like the threat of DVD factories stamping out thousands of counterfeit disks per day is absurd, but Hollywood puts them on the same plane, and the little guy loses what should be routine. So, one and a half cheers for PCCW's broadband television experiment. It's a breakthrough technologically, and offering programming in more thinly sliced ways is a win for customers. Too bad their freedom ends there. If this really is the way digital-age TV will work, we may end up losing as much as we gain.
December 07, 2003
TV's Possible Future -- What's Smart, What's Not
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