Douglas Crockford

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August 2004

This is my final report on digital television. It reviews the most important things about the current state of the evolution of television. The software sector is heating up again, so I am going back to programming.

Lost in Transition

The United States, like most of ROW (the rest of the world) is converting its television system to High Definition. Some compare the HDTV transition to the transition from black and white TV to color, but it is more like the transition from radio to TV:

A TV program can be converted to a radio program by deleting the image. A TV set can be designed to also play radio programming. A radio is not capable of receiving a television program, but is capable of receiving a TV program that has been converted into a radio program. If you want to fully experience television, you must turn off the radio and get a TV set. TV is a new, incompatible system, that only works with new equipment.

HDTV is the new television, and TV is the new radio. The problem is that no one is telling consumers that HDTV is a new, incompatible system that will replace the old TV. Since no one is telling them what HDTV really is, they are assuming that it is a compatible extension (like color), or they are assuming that it is a synonym for Big Screen TV, which is something they have always wanted but could not afford.

These false assumptions result in a lot of confusion in the marketplace. The root of the problem is the government, particularly the Congress and the FCC. They are planning for the destruction of the old television system, and they are not explaining their reasons for doing this to the public for fear of political backlash, so the Transition is proceeding in secret.

HDTV requires all citizens to replace their old analog sets with new digital sets. This is a big expense and inconvenience. The original justification was to generate new business for the US television manufacturers, and to protect that industry from having to adopt Japan's proposed HDTV standard.

Since the time that plan had been put in place, all of the US television manufacturers have failed or been sold to foreign owners. Congress is afraid to tell the public that they have to replace all of the TV equipment for no good reason, so instead they had the FCC adopt a tuner mandate rule, which gradually takes analog sets off the market.

This policy is not working. Since consumers do not understand that HDTV is a new system, they feel no urgency to buy the new equipment. The activity in the marketplace now is at the volume of normal replacement and upgrades, with some stimulation due to the efficiencies and desirability of new technology and designs.

The Transition is proceeding slowly, almost accidentally, as consumers sample the new TV sets. The slowness of the transition is creating problems.

The Grand Alliance

When HDTV was proposed in the US, there were two things that everyone could agree to:

  1. It should be 16x9
  2. It should not be the NHK system. Instead, it should be digital.

Almost every other aspect of the system was subject to violent disagreement. Should the pixels be square? Should it be interlaced? What are the screen dimensions?

The FCC appointed a committee of many of the interested parties. It was called The Grand Alliance, and it was ordered to reach an agreement. They met, but failed to reach an agreement. Instead, they came up with three systems: EDTV, and two forms of HDTV.

EDTV is wide screen, progressive scan, 480 lines. It is used by DVD and is currently the most popular application of HDTV sets.

HDTV comes in two forms: wide screen, progressive scan, 720 lines; and wide screen, interlaced, 1080 lines.

The system is called ATSC (Advanced Television Standards Committee).

They also chose MPEG2, which has terrible resilience properties. In the presence of noise (which is common in broadcast systems), drop outs are amplified into blocks, which can remain visible for seconds. The performance of ATSC in the presence of noise is significantly worse than NTSC, the old analog system, which renders noise as snow.

(There are two new codecs (H.264 and VC1) that will not be added to ATSC. They are even worse.)

The Industry has suffered as a result of the Grand Alliance's failure and shortsightedness. It is attempting to correct that mistake with a new format: 1080p, which will probably come in 24, 25, 30, 50, and 60 frame rates. It is too late for ATSC to adopt 1080p. It lacks the bandwidth and compression efficiency, but it is likely that Cable, Satellite, IPTV, and the next form of DVD will adopt 1080p. The Transition has not gotten very fair, and already Broadcasting is falling behind technologically because of digital legacy issues. Broadcasting is becoming irrelevant.

Convergence

The Television Industry in the US is made up of many interconnected groups. The complexity of digital television matches the complexity of the relationships within the industry itself. The Technological Convergence has been completed: all sectors now use the same technology: silicon and software.

The Business Convergence is still on going. Business models must inevitably adapt to the environmental changes caused by convergence. In some cases, it removes barriers that used to protect industries. The Telephone Industry is now in bitter competition with the Cable Industry. Computer companies are now competing with Consumer Electronics companies.

Some industries are struggling to maintain their traditional models despite the changing environment. The clearest example of this is the Recording Industry. The Recording Industry suffers from a lot of problems. As it has consolidated into a few Media Giants, there has been increasing attention on hits and little development of new talent. As the hit makers become old and dull, there is little desirable new product. A bigger problem is that the mass media channels for promoting music no longer exist. Instead of a small number of radio stations in each market dictating musical tastes, people now have access to a vast array of choices, thanks to the internet and digital media. Without a mass promotion channel, it becomes much more difficult to produce hits.

But the Recording Industry's biggest problem is that it is now unnecessary. At one time it provided useful services: It advanced money for the production and recording of music. It manufactured the recordings. It delivered the recordings to the distribution channels. Today, digital media production tools are really good and cheap; a band can easily afford to produce its own recordings. With digital media, there is no need for manufacturing. With the internet, there is no need for distribution.

The Recording Industry is trying to cling to a business model that no longer makes sense. It has invested heavily in corrupting the Congress to produce Intellectual Property laws that are intended to protect it from inevitability. This is a strategy that will ultimately fail, but it will cause a lot of social harm before it does.

There are three business responses to inevitability:

  1. Passive Ignorance
  2. Futile Resistance
  3. Exploitation

Initially, the Recording Industry's response to new technology was the first response. They could find ways to use digital technology to reduce costs and increase prices, but they did not consider changing their models. They have now moved to the second response. It is not clear now if they will survive long enough to adopt the third, correct response: Understand what is inevitable; use that as a prediction; use the prediction to plan. The Recording Industry can survive if it transforms itself into a service industry that serves the needs of musicians and music lovers. It should offer services that are clearly valuable. It should not be depending on statutory supports or fading monopolistic positions.

As we will see later, DRM (Digital Rights Management) is a second response.

DVR

The most important recent innovation in digital television is not HDTV. It is DVR (Digital Video Recorder), aka PVR (Personal Video Recorder). While the benefits of HDTV are clear and attractive, DVR will radically transform the television landscape.

DVR is similar to VCR (Video Cassette Recorder), except that it uses a hard disk instead of a tape cassette. This makes it much easier to manage the recording process. Tapes do not have to labeled and loaded. Searching and scanning are much easier. The DVR is capable or recording and playing back at the same time. This is a huge convenience. It allows you to ignore the programming schedule. You watch programs at times that are convenient to you.

Most DVRs have built-in program guides. So instead of typing in date, time, and channel information, you select titles. This is a huge operational convenience. It is changing the viewing experience from the previous appointment model to an on demand model. This is the future of television. Programming will be provided to the viewer's schedule, not the networks'.

The most famous feature of DVRs is the ability to skip commercials. It turns out that people have always skipped commercials. It used to be that people would get up and go to the kitchen or the bathroom during breaks. With remote control, people would MUTE or channel surf during commercials. With VCRs, they would skip commercials when they time shift. With the DVR, almost everything you watch is time shifted, so you can skip the commercials in everything you watch.

This is leading inevitably to the collapse of the intrusive commercial model. The television industry is scrambling to develop new models that will allow it to keep and perhaps grow the $60 billion spent each year on television advertising. I think that broadcasting will most feel the impact of the transition.

In the transition from radio to television, radio changed from the most important mass medium to a low value carrier of recorded music and talk. I think a similar thing will happen to television broadcasting, if it survives.

TiVo is the most famous DVR brand. They have an excellent product, but lousy marketing. They have been unable to explain their value to the public, even with a fanatical customer base.

The DVR, not the STB, not the TV set, not the computer, should be at the center of the home network. It is the best point of access for all of the programming you would want to watch. The DVR should drive the UI functionality for the whole system.

Switchoff

Spectrum is limited. Congress wants to take the spectrum allocated to analog TV broadcasting and reallocate some of it for public service usage, and auction off the rest. There are opinions that the auction could produce as much as $28 billion in revenue.

The problem is that when analog broadcasting is switched off, Congress's mishandling of the Transition will become clear, and it is likely that millions of citizens will be extremely angry. The longer we have to wait for the switchoff, the less anger there will be as more people switch to digital sets or adopt cable or satellite or IPTV. However, Congress wants to spend the auction money, so it wants the switchoff to happen sooner.

Originally, the switchoff was supposed to happen at the end of this year, but wee are nowhere close to having 85% of homes equipped with HDTV sets. The current proposal is to do the switchoff at the end of the last day of 2008. There is still concern that millions of people will then be without any television service. Many of those people are poor and unable to buy ATSC set top boxes. It has been proposed that the Government buy or subsidize these devices, at a potential cost of billions of dollars. It is not clear yet who will be eligible to receive the devices.

There is nothing on broadcast television that can help poor people become non-poor people. I think if we are going to subsidize the digital-less poor, we could do much better by providing libraries with much better internet-related resources. With community internet access, poor people would have a better opportunity to improve their situations than they would with ATSC tuners.

Most television stations produce very little programming. Their schedules are dominated by entertainment programs obtained from networks or syndicaters, with decreasing amounts of local news and talk. Such information could be delivered more effectively over the internet.

Broadcasting has become the least effective mode for delivering television programs. Its lack of two-way communication means that there is no certain way of knowing who is watching. Its lack of accountability is forcing advertisers to consider other media. Broadcasting will continue to lose viewership until ultimately its base will be made up of the poor and the technologically feeble. It makes no sense to subsidize this system.

I think we should be considering a digital switchoff as well as an analog switchoff. I think the spectrum can be much better used for other purposes.

Digital Rights Management

In 1972, before Betamax and VHS, there was a consumer videotape system called AVCO Cartrivision. Cartrivision had black retail cartridges, and red rental cartridges could not be rewound by ordinary players. This was to prevent people from watching a movie a second time without paying again. This feature was demanded by the Studios as a condition of their cooperation. The system was a commercial failure. Later, Betamax and VHS were developed without the cooperation of the Studios, so the Studios attempted (and failed) to legally suppress them. This led to the creation of Home Video, which generated a vast amount of money for the Studios. They make more money now in Home Video than they do in theatres.

The system the Studios liked failed. The system the Studios hated made them wealthy. The Studios do not know what is in their own best interest.

Engineers are famous for producing systems that are far too difficult for ordinary people to use. This is because they are unable to understand the user experience. The Studios suffer from the same problem. They liked the tape system that could not rewind because they thought they were entitled to more money every time their program is watched. But they did not consider that rewind is a convenience. It allows you to playback a section that you may have missed because there was a distraction in your home, or to play again a scene that you really enjoyed, or to start the show over for the person who arrives late. Very few people have the time to watch a rented movie more than once, anyway.

People have reasonable expectations about what they should pay for and what they should be allowed to do. The Studios' expectations are radically different. The Studios will use their clout to enforce their expectation with hardware (such as disabling rewind). They don't care if the hardware product fails. That's not their problem.

This brings us to DRM (Digital Rights Management). The Studios have been insisting that all digital media systems include special mechanisms to force their desires onto consumers. In particular, they want to extend the idea Copyright to increase the amount of money they can demand from consumers.

US Copyright Law contains a doctrine of Fair Use. Fair Use allows a person to make certain uses of a copyrighted work without the approval of the copyright holder. It also contains a doctrine of First Sale, which says that the owner of a copy is entitled to do anything they like with the copy so long as they do not make another copy. So, for example, if I buy a book, I may then sell it to someone else, or loan it, or rent it, or give it as a gift.

The Studios do not like First Sale. They want to have the exclusive right to sell their works. They have been effective in forcing Congress into adding significant strength to Copyright Law, and in using the US Government to force its Copyright Law onto other countries. They have not been able to eliminate the doctrines of Fair Use and First Sale, so they are attempted to use DRM to technologically circumvent the law.

In a DRM regime, you do not buy a copy, you buy rights to use a copy. The rights could be to view it once, or to view it twice, or many times, or until a certain date. The rights could apply to a single device. The rights could include the ability to modify the work. The rights could include the right to share the copy with friends and family. The rights could include the right to access the special features.

The Studios enjoy the benefits of mass merchandising, but they do not like that there is one price for all. They want to be able to charge higher prices to people who value the content more. DRM is a way to do that. Also, DRM allows them to make their own copyright laws and have them enforced by the consumer's own devices.

The Studios are using the pretense of Piracy to justify DRM. They point to the reversals of the Recording Industry, claiming that if there had been better DRM in music, then the Recording Industry would not be suffering now. I believe that the Recording Industry's problems are not due to unauthorized copying. There are much deeper problems. I think they are wrong to blame their customers for their problems.

The Studios do have a real problem with piracy. Mass duplicators in China, India, and other places, produce authentic looking unauthorized copies for sale at retail all over the world. This is clearly illegal. However, DRM will have no effectiveness in stopping this.

The Studios have another problem with piracy. They currently have a model that includes windows of exclusivity. A movie will open in theatres, and then some months later it is sold on DVD, and some time later again it is released on Premium Cable. The problem for them is that the theatrical release creates demand which they are unwilling to satisfy. This creates opportunities for pirates, who can bring DVDs to market before the Studios are willing to. DRM will have no effectiveness in stopping this. Fortunately, there is a simple, non-technological remedy: The Studios should release the DVDs sooner. Their product will be of much higher quality than the pirate product, and will be cheaper as well. Also, if they release the DVD at the same time as theatrical, they can save a lot of money in promotion and advertising.

DRM will have an effect in homes, making the use of media frustrating and confusing. DRM devices are designed to fail to do certain reasonable things. This is not good.

Ultimately, DRM will fail. The theoretical foundations of DRM are weak. In the long term, the Studios will be forced to abandon DRM, either because of consumer backlash, or because circumvention becomes so common that DRM becomes an annoyance to the Studios. For example, consumers like having the right to copy, and in some cases will pay more for content that comes with that right. Indeed, this is what the Studios are counting on. The obvious thing for a pirate to do is to produce copies that have no restrictions. This is the only way they can make product with higher value than the Studio product. So, instead of preventing piracy, DRM enables and encourages piracy.

As always, the Studios do not know what is in their own best interest.

Whatever happens, we are likely to see DRM for a while. HDMI (High Definition Media Interface), which is becoming the preferred cabling method for HDTV systems (such as STB to monitor connections) includes HDCP (High Definition Content Protection). BluRay and HD-DVD both contain AACS (Advanced Access Content System). DVD still uses CSS, even though it has been broken.

One of the biggest DRM problems is with interoperability. Most DRM systems are mutually incompatible, and there is no one system that works everywhere for everything. This is a problem without a solution.

In France, where there is a tariff on blank media, copy protection has been declared illegal by the courts. They found that the purchase of blank media includes a payment to producers to compensate them for copies, so preventing copying is immoral. This may spread to other countries with media tariffs.

This creates two problems for the Studios. They can no longer claim moral superiority when asserting their need for DRM. DRM cannot work in a networked world when whole countries are unrestricted.

Broadcast Flag

The Studios attempted to put a DRM measure into ATSC. It is called the Broadcast Flag. It was intended to prevent programs from moving from the air (where anyone can receive it for free) to the internet. The Studios were able to convince the FCC that a mechanism was needed to keep free programming from being redistributed for free.

The Broadcast Flag, when included in a program, tells the ATSC tuner to turn off its high-quality digital outputs except when those outputs are under the control of one of the FCC approved DRM systems.

The FCC was sued in Federal Court by Public Knowledge and EFF and others on the grounds that it did not have the authority to make such a rule. The FCC lost the case, and the Broadcast Flag rule was revoked.

The Studios have been lobbying Congress to get a law that would give the FCC the authority to make the Broadcast Flag rule. So far they have been unsuccessful. The opposition has become very good at creating publicity around the issue. The Congress does not want to appear to be taking the wrong side in the battle between The Studios and The Voters.

The Studios have tried to get Broadcast Flag rules adopted in other countries, and have been unsuccessful.

The Microsoft Effect

Computers are very difficult to use. They are unreliable. It is easy to unintentionally get them into states in which they do not work properly. People accept this terrible behavior because they think it is simply a part of the intrinsic nature of computers. They are unaware that it is possible to make good computers, and that the Computer Industry simply chose not to.

The behavior they tolerate in their computers becomes intolerable in other devices. They do not want their TVs acting like computers. They do not want the awful user interfaces. They do not want the unreliability. They do not want the spam and viruses. They do not want the upgrades and confusion. They want to turn it on and watch it, like they did with the old TV. They do not want to have to read a manual.

When considering features to include in a TV set, consider the impact on the manual. How many pages does it add? How complex are those pages? In many ways, increasing manual complexity is worse than increasing the cost of the product. People want simplicity, and the Industry is not delivering it.

The Computer Industry sees the TV as just another digital device, so organizations like DLNA are working to make the TV part of the home computer network. They want to give the TV an IP address and hang it out on the net like a computer. They have completely failed to consider the consequences:

They are making it possible for a virus in the computer to attack the TV. The virus can change channels, add or delete programs from the DVR, flood the livingroom with spam. It can launch a denial of service attack, making the TV set fail. Consumers are not asking for this. It will soon be very important to get access to program directories and program services over the internet. We need to do this without replicating everything that people hate about their computers on their TVs.

Standards

There are lots of standards out there. Many of them are bad or irrelevant. There are some standards that are urgently important but do not exist yet. A safe and easy home networking scheme is one. Another is a need for a common user interface.

Currently, every device has its own remote control. A living room might have 5 or more remote controls.

Integrated remote controls either do not work or are too expensive. We have a huge 16x9 canvas on which to paint an effective UI, but it appears that no one knows how to do it. This is a very fruitful area for research. Until the breakthrough comes, try to minimize harm: Seek to add as little complexity to the room as possible. Attempt to peacefully coexist with the other devices as much as possible.

CEA has been pushing IEEE 1394 (Firewire) as a connection standard. It appears to have stalled. I would avoid it.

CEA has also been pushing DCR (Digital Cable Ready). I would avoid that too. There is a new standard, DCR II, that will allow for two-way operation and interactivity. It is very late. I would avoid it, too. The next standard will include DVR features. This one might be a good feature to adopt, but only as an option: Customers who use Satellite or IPTV can't use it.