TV Is the Star at CES

The biggest star at the annual Consumer Electronics Show (CES) in Las Vegas this week isn't Microsoft's Bill Gates, who will deliver the opening keynote, or the latest computer innovation. It's television.

As TV executives discuss their video strategies inside meeting halls or down below on the floor, exhibitors at this gadget-fest will be demonstrating the latest in high-definition television, portable video devices and Web-to-TV “convergence” products.

Some 10 years after the U.S. digital television (DTV) standard was introduced, sales of digital sets have finally taken off, particularly high-definition flat-panel LCD and plasma displays. The Consumer Electronics Association (CEA) will reveal its latest numbers on HDTV set sales, which projected at more than 11 million units for 2006. Samsung unveils a line of rear-projection digital light processing (DLP) 1080-line-progressive (1080p) sets, which rival LCD's thickness and cost less than plasma sets in big-screen sizes. Hewlett-Packard will showcase its flat-panel HDTV displays that use wireless networking to pull high-definition video from personal computers.

Format war

Engineers will be crowing in Las Vegas about the possible end to the HD-DVD format battles. The next-generation DVD formats, Blu-ray and HD-DVD, are currently engaged in a format war that has slowed their adoption. Some progress in that conflict is expected at CES: LG Electronics plans to introduce a player that will play both Blu-ray and HD-DVD discs, and movie studio Warner Bros. is expected to unveil an optical-disc format, Total HD, that supports both formats. Studios like Warner Bros. view 1080p discs as not only a natural venue for theatrical releases but as a potential upsell for primetime programming released on DVD, because the 1080p format has better resolution than the 720-line progressive (720p) and 1080-line-interlace (1080i) HD broadcasts offered by networks.

HDTV viewers may also be able to look forward to improvements in their audio experience. Dolby Laboratories will be in Vegas giving private demonstrations of a new audio technology called “Dolby Volume,” which it hopes to license to consumer-electronics manufacturers as a solution for loudness problems.

Loudness, the volume spikes that occur on a TV set during a commercial break or when switching channels, has plagued television for years and has become even more of an issue with DTV broadcasts that use powerful 5.1-channel Dolby Digital audio. Dolby has already developed several professional devices aimed at solving the loudness problem, which it markets to television stations, programming networks and cable operators.

Now Dolby takes aim directly at loudness in the living room. Dolby Volume is based on a new approach that manages loudness issues in TV programming, whether analog or digital broadcasts, with audio-normalization software in the television set itself. Dolby Volume would ensure that a consistent volume level is delivered to the TV speakers or external home-theater audio system, and normalize volume when video inputs on a television set are switched, such as from a digital cable box to a DVD player.

Says Page Haun, marketing director, broadcast, for Dolby, “You no longer have to reach for the remote as you get blasted away from some advertiser. It automatically gets leveled out.” While Dolby Volume has been in development for three or four years, Haun cautions that it is still in its early stages and Dolby has no specific rollout plans yet. But she is counting on it to make a splash.

Tuner chips

In addition to the big set manufacturers, the floor will be peppered with firms selling to them. Xceive Corp., a small Santa Clara, Calif.-based venture-backed firm, makes TV-tuner chips for personal computers. Xceive will unveil a digital tuner chip aimed at the big-screen HDTV-set market; the XC5000 supports multiple DTV transmission schemes as well as analog broadcasts on a single piece of silicon.

According to Alvin Wong, VP of marketing for Xceive, the XC5000's performance in areas like signal-to-noise ratio compares favorably with the traditional “can” tuners, assembled from multiple components, which are prevalent in today's big-screen sets. A single-chip solution that will support digital TV sets in multiple regions should create manufacturing efficiencies for set-makers, he adds.

Henry Choy, an analyst with research firm DisplaySearch, says Xceive, along with Microtune and other tuner-chip manufacturers, will have a tough job persuading tier-one set-makers like Sony and Sharp to shift from conventional can tuners to silicon, and he expects that suppliers of can tuners will seek to aggressively compete on price. But with the worldwide digital-TV market predicted to grow from 73 million sets sold in 2006 to 157 million sets in 2010, says Choy, the opportunity for silicon tuners is potentially huge.

“This is the natural progression of where the technology will go,” says Choy. “But they have to get themselves out in the field and have to be proven.”

On the broadband front, the popularity of gaming is drawing some new players into the space. U.K.-based NDS, which makes conditional-access and interactive-TV software, is working with several game developers to create games suitable for digital set-top boxes. NDS has teamed with Electric Spin to create a 3D golf game called Golf Launchpad/XTV Experience, which lets users play simulated games on famous PGA Tour courses, and is working with Rebellion to develop high-definition games for set-tops.

Programming service Showtime is offering cable and telco providers a turnkey gaming service that will leverage Showtime's existing sales relationships and billing infrastructure. The service, called On Broadband, will be demonstrated in private meetings in Las Vegas this week. “Gaming is a category you can't ignore,” says Showtime Chairman/CEO Matt Blank.

On Broadband is a joint venture with Broadband Libraries, a gaming startup created out of CBS corporate sibling Simon & Schuster. The service, in development for the past 12-18 months, is not based on Showtime content but is instead a business-to-business play. It's designed to provide cable operators a privately labeled and branded gaming experience, such as “Time Warner Road Runner Gaming,” that will deliver free content, including up to six new games per month; subscription content; and transactional content, all linked to high-speed–data customers' existing bills.

Showtime will handle the backend infrastructure, including data servers and billing, and manage the relationships with game publishers, which have been looking for an efficient way to distribute games to broadband-enabled homes.

“We distribute products to this universe, we have the relationships, and it's something we've been doing for a long time,” says Blank. “There are a bunch of players out there, but there is nobody really doing this, nobody really providing turnkey operations. This is one-stop shopping for distributors.”

Another cable programmer, Nickelodeon, will introduce a broadband video platform created specifically for Microsoft's soon-to-debut Windows Vista operating system. “TurboNick for Windows Vista,” slated to become available with the Vista launch Jan. 30, will offer Nick fans a richer video experience with higher-quality video encoding and more interactive features, including hundreds of short clips and full-length “Nicktoons,” such as SpongeBob SquarePants and Jimmy Neutron: Boy Genius. The video on the Vista-enabled platform is designed for viewing on a big-screen TV as well as a PC, says Steve Youngwood, executive VP of digital media for Nickelodeon, and Vista users with compatible PCs will be able to use a remote control instead of a mouse to browse content. Another significant improvement with the Vista Platform is that PC users with a TV-tuner card will be able to watch Nickelodeon's live TV feed on their PC through TurboNick.

Says Youngwood, “ We are all about how content is distributed across new platforms, and this is the show where new platforms are produced.”

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