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Bob Zitter officers Insights Into Cable Network Leap Into Hi-Def.

The difference between standard-definition and HD television has been compared to that between blurred vision and seeing the world in focus. But tell someone that his or her new pair of glasses is going to cost close to $10,000 and they'll probably put up with squinting for a while.

That dynamic and other uncertainties about high definition are big issues for networks as they choose how they're going to adapt to the new era of HD broadcasting. Bob Zitter, senior VP of technology operations at New York-headquartered HBO Cable TV, provided an overview of the network's HD preparations and his thoughts on the state of HD broadcasting in the coming years. His remarks came during his keynote speech at The Association of Imaging Technology and Sound (ITS) Forum and Exhibition earlier this summer.

Zitter noted that HBO entered its own HD era on March 6 of this year. On that day, HBO made available HBO HDTV, a 24-hour high-definition feed, to cable and satellite carriers capable of transmitting the signal to viewers. HBO is currently broadcasting 50% of its movies in the 1080I HD format and plans to move up to 60% by the end of the year. Programming not in the 1080I format is being upconverted for transmissions on HBO's HD feed. Zitter explained that HBO opted for 1080I because the network felt it to be the highest-quality format available. (Carriers now using the format include Time Warner Cable for the Manhattan and Tampa, Fla. markets, and Cablevision for the Long Island, N.Y. area. DirecTV, a satellite broadcaster, began transmitting HBO's HD signal on August 1, and Echostar, another satellite broadcaster, announced that it will soon be carrying HBO's HD signal, though the company did not specify when.)

Quality is a major theme for Zitter, and he repeatedly emphasized the importance of HBO's brand identity. One of the reasons why HBO decided to broadcast in HD was because of what Zitter described as the network's reputation for innovation and quality. "[Our viewers] regard us as a premium," he said. "We have a responsibility for quality. ... If the networks offer HD and HBO does not, we would have broken our contract with our audience."

HBO's research into HD revealed synergies among its audience, HBO's programming and the material that is best suited for the HD format. Zitter observed that, according to demographic studies, the "early adopters [of HDTV], almost to a person, are HBO watchers." In addition, Zitter said, "The kind of programming that viewers would prefer to see on a high-definition set is the kind of programming that HBO offers."

Whether or not viewers will purchase the new hi-def sets en masse to see this programming remains to be seen. Implicitly assailing the HD strategy of such networks as NBS and ABC, Zitter noted that consumers aren't going to buy the sets so they can watch only a small piece of the television pie. "No one other than Bill Gates is going to spend $10,000 on a TV set to watch one hour of programming a night or to watch four football games a year," Zitter said. "You need to have a critical mass of programming to justify going out and buying something that you're going to have an argument about with your spouse anyway because it takes up so much space in your living room."

In terms of percentages, Zitter pointed to a chart projecting how HDTV and DTV sets will be adopted by American consumers. (Capable of decoding hi-def signals, DTV sets have al higher resolution than televisions today but a lower resolution than HDTV; the DTV sets will be produced in aspect ratios of both 4:3 and 16:9.) Zitter's chart showed consumers adopting DTV and HDTV slowly at first, with momentum picking up closer to the end of the chart's time frame, which ends at 2008. At that time, HBO projections show that DTV sets will be in approximately 45% of American households, and HDTV sets will attain approximately 30% U.S. penetration. Because of the higher percentage of DTV sets, Zitter contended that "we as programmers will be programming to the [DTV audience]." Zitter added that the higher percentage of DTV and HDTV sets "doesn't get to be critical until the 2003 to 2004 time frame."

While HBO has begun to broadcast in HD, Zitter explained that the live events produced by HBO will not be originated in the high-definition format at the moment because the appropriate technology doesn't currently exist. "Not everything exists yet in the quantity that we need [in order] to produce our video programming in high-definition," he related, detailing the extensive production presence for events such as live broadcasts from New York's Central Park or sporting events. "There's equipment that we need so that when we do an HDTV production, we do it with a production value that our viewers have come to expect."

Zitter said the HD format wars - with different networks choosing different HD standards - are more about corporate strategy than consumer choice. "Those of us in the network business should end the debate about format," he said. "I don't think consumers give a damn. They're not going to know the difference." In his view, the format question boils down to one of "bandwidth and revenue per megahertz," with networks making moves to maximize their profit.

COPYRIGHT 1999 BPI Communications, Inc.
COPYRIGHT 2000 Gale Group

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