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Updated: July 8th, 2008 05:26 PM CDT

Migrating to Advanced Video Coding: What's the Plan?

via NewsEdge Corporation

Broadcasters, however, don't have a business plan based on set-top boxes. They broadcast directly to TV receivers. According to the Consumer Electronics Association, 7 million DTV sets were sold in 2004 and an estimated 15 million will be sold in 2005. That's at least 22 million "legacy" TV sets, once advanced coding is deployed. They'd all have to be replaced in order to decode and view programming that is transmitted using advanced coding.

But, the question is: replaced with what? Consumer electronics manufacturers are reluctant to produce TV sets with new technological capabilities until broadcasters commit to use and promote the use of those capabilities. And, broadcasters can't use new technology if their viewers don't have the hardware to receive it. It's a real chicken-and-egg problem.

And then there's the marketplace confusion factor. You go to Best Buy and you see two DTV receivers side by side, and the only difference is that one decodes MPEG-2 and AVC and the other decodes only MPEG-2. Which one do you buy? Maybe it depends on the price difference. Maybe you don't buy anything, but instead go home confused. Or maybe you buy an analog set. Remember, even today, people are still buying analog TV sets. Who knows how long Best Buy will continue to sell them?

So suppose you buy the cheaper DTV set, the MPEG-2 set without the advanced decoder. You take it home, plug it in, and let the set search out all the channels. What does it do when it finds one carrying advanced coding programming? Hopefully it ignores that channel, and doesn't load those programs into the electronic program guide. Otherwise, you might decide to watch one of those programs, and the display would go dark when you tuned to it. But what if you see that very channel listed in the newspaper's printed program guide? How does one explain to a customer why he can't watch that program, especially a customer that just bought a new TV set?

The government will force the migration from analog to digital, because it wants to reclaim the analog spectrum. There won't be any such forcing to move from MPEG-2 to AVC or VC-1. But there are business considerations. Microsoft could subsidize the deployment of VC-1 decoders in TV sets. And it seems like IPTV services are leaning in the direction of VC-1. Decoder chip manufacturers don't seem to be worried about building chips that can decode both AVC and VC-1, along with MPEG-2. But they are worried that the royalty payments will be too high.

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