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Dispatches from the Digital Revolution

Cable legend John Malone’s vision for the 500-channel universe would not have been possible without the emergence of digital, a technology that enabled cable operators to pack more channels into their available spectrum, sparking a wave of new products and a land-grab by programmers seeking to launch a multitude of niche-oriented multiplexes. Digital also paved the way for new satellite and telco TV competition, the HDTV transition, the advent of video-on-demand, the DVR, today’s over-the-top explosion and the inevitable shift to 4K. There at the start of it all was Marc Tayer, the video pioneer and former General Instrument executive who led the team that submitted the first all-digital HDTV system to the Federal Communications Commission in 1990.

To mark the 25th anniversary of this groundbreaking event, Tayer has released a book, Televisionaries: Inside the Chaos and Innovation of the Digital Revolution (available at Amazon), offering a first-hand account of how it all came together. Tayer recently spoke with Multichannel News technology editor Jeff Baumgartner about digital video’s past, present and future.

MCN:Your new book details the invention of digital television and how it went down. Were there some moments when everyone’s confidence was a bit shaky about whether it could be pulled off?

Marc Tayer: Everyone was questioning whether what we’re claiming was even possible. We were confident that we had something, but we weren’t 100% sure that it was going to work well in the real world. Then we built the first real-time hardware prototype, and the guys from Hughes would come all the time because it was the only place in the world you could see real-time digital. Everyone was coming through San Diego because it was the only place you could see it for more than a few seconds with computer simulations. All of the top content providers and cable operators were coming to San Diego to see it.

When MPEG got involved with MPEG-2, that … converged with our DigiCipher II system a few years later. Then it got very competitive, and there was this sort of GI and S-A (Scientific-Atlanta) war that reflected in in the TCI [Tele-Communications Inc.] vs. Time Warner wars, and that almost threatened to split the industry with two different digital TV standards.

MCN:Cable operators are starting to lean on IP transport for video. Can you yet envision a day when the cable industry kisses cable’s legacy MPEG-based digital-TV system goodbye?

MT: I think there will be a gradual transition over to the IP world. Cable has this history where it has needed to maintain two or more worlds. Eventually, I think it all does go to the IP world, not just for technical reasons but for business reasons, but I think it’s more of a 10- to 20-year transition.

MCN:Video streaming using IP is pretty commonplace now. Aerocast [a startup Tayer co-founded that was originally backed by Motorola and Liberty Media] was involved in some important Internet video trials more than a decade ago, but the company never took off. Was this just a case of a technology and a company that simply emerged before it’s time?

MT: It was ahead of its time in terms of entertainment-quality streaming over the Internet with ESPN … and Comcast participating with their early cable-modem service. But the real issue, which was kind of unfortunate, is that it came down to some serious tension between Liberty and Motorola over control over Aerocast.

They had kept the venture-capital firms out for the reason that they really weren’t adding value, in their view. Liberty and Motorola had all of the money and strategic patience to wait it out and become the next YouTube or Netflix before those companies even existed.

We were ahead of our time, but more than that it was a lesson in why corporate strategic venture capital is not always the way to go. Motorola ended up buying out Liberty, so Liberty did fine on it, and Motorola was caught up in its own issues and they didn’t really do anything with Aerocast once they had it.

MCN:So Aerocast essentially died on the vine?

MT: Yeah, and they even gave up on the ESPN relationship, which was an unbelievably strategic asset [by] being the first company to be streaming high-quality sports over the Internet.

MCN:What’s your opinion on 4K? Is it the next HDTV, meaning that it’ll be a big hit, or the next 3DTV, meaning it’ll be the next big dud?

MT: I believe that Ultra HD is going to be very successful, but it’s going to take a long time, just like HD took a long time. It will not be 3D, where it’s successful in the movie theaters but fizzled out quickly in the consumer home.

MCN:How long until 4K becomes a mainstream thing?

MT: I think it will take up to 10 years for it to become a mainstream consumer [product], meaning that it’s in a majority of homes. There are multiple reasons, like there were with HD, namely new consumer equipment … and the content, but I think the single biggest reason is bandwidth. All of the service providers need to maintain their legacy [systems] and [deliver] the same content to people who don’t have 4K TV sets. The new 4K signals … need all of this new capacity for these new bandwidth-hog signals.

MCN:What will be the impact of these new virtual MVPDs? Can they survive, let alone thrive?

MT: It depends on the content and the marketing and other factors. It’s all part of the broad trend toward the Internet and it’s also related to cord-cutting, which so far is a small trend.

All of this gives consumer more flexibility. The Internet, with new services like HBO Now and CBS All Access, gives consumers more control over creating their own packages. It will not necessarily save them any money; a la carte might even be more expensive. But it’s not going to destroy the bundle. It is already forcing the incumbents … to revise their bundling strategies and you’ll see them create more mini-tiers in reaction to what’s going on with Sony PlayStation Vue and Sling TV and what Apple is cooking up as a content aggregator.