Brian C. Clark
One way to get a bead on which direction the television industry is headed is to pay attention to events like FCC auctions, standards debates and, believe it or not, consumer sentiment.
For example, a couple weeks ago, I mentioned a DirecTV and Echostar partnership, called Wireless DBS, was initially the high bidder in the FCC's wireless spectrum auction. That initial bid led to all manner of speculation about what satellite companies would do should they win it. Turns out it was a waste of energy—this past week, the partners pulled out. Mike Arden, principal broadband analyst at ABI Research, says there were two possible reasons for the satellite companies' initial interest. "Either they were trying to feel out the market to see which way it would go," he says, "or they were doing it for show." But DirecTV's Rob Mercer says the explanation is more simple: "[W]e're exploring a variety of options for delivery of a broadband service to our customers nationwide."
Ho-hum. The withdrawal of Wireless DBS does not bode well for satellite providers' wireless future.
According to analysts, the next auction in 2008—for the 700MHz spectrum—is supposed to bring in even bigger bucks. And if DBS can't play at the current level, it's unlikely it'll be prepared to do so next time. The 700MHz spectrum, btw, is supposed to offer greater penetration through buildings as well as greater coverage over longer distances. The end result: if these guys really want to participate, they'll likely have to partner with another wireless provider.
At the same time, there was another interesting development taking place at the auction, and that was cable's sudden play for the wireless space. "It's about diversification," explains Ross Rubin of the NPD Group. "All of cable's current services are aimed at the home. But consumers' lifestyles are becoming more mobile." Rubin thinks cable providers risk losing customers if they don't have an offering in mobile video or telephony. More importantly, adds Rubin, "Cable companies are transitioning from video providers to lifestyle service providers."
Still another clue to TV's future came earlier this month when CableLabs announced it had approved the preliminary specification for DOCSIS 3.0, which allows cable companies the squeeze bandwidth required for programming and improve the performance of the networks they currently operate. In short, the standard will allow them to deliver IP video to the home, says ABI's Arden.
The approval of the spec means cable companies are maneuvering into position for an all-out IPTV fight. Given that volume shipments of DOCDIS 3.0 network equipment are likely to hit the market next year, just as the telcos roll out IPTV in many U.S. markets, this could turn into a battle royale for your business.
Meanwhile, potential HDTV buyers would be wise to heed August's UBS Investor Confidence Survey. Apparently, American investors are not feeling very confident in the direction of the economy, mostly due to a slowing real estate market and volatile gas prices. Who cares, you say? In fact, when investor confidence falls, people with larger disposable incomes spend less on things like expensive TVs. And as people with deep pockets sit on the sideline, it tends to force prices down. So be patient, dear reader.
And speaking of patience, I've written I won't buy an HDTV until I can get 42 inches of widescreen bliss for less than $1,000. So what are my chances at this point? Well, according to Current Analysis, my closest flat panel options are an $1,899 LG plasma at and an Toshiba LCD at $2,659. Ouch. But coming up on the outside is a DLP set from Samsung, offered this week at Circuit City for $1,349 after a $150 instant rebate. As much as I like Sony's new LCOS sets, I'm fighting my own impatience, so DLP is looking more appealing—by about $550.