Category: The Front Line

By The Numbers – Or Maybe Not

Several news stories crossed my desk this morning that are each worth closer scrutiny. The first one comes from Reuters and says that Dish Network’s quarterly revenue missed forecasts as more customers disconnected their satellite antennas.

Dish stated that they had lost 23,000 subscribers on a net basis for the quarter ending September 30. In the same time period a year earlier, the net loss was 12,000 subs, almost half as many. And apparently the company’s new $20/month streaming service, Sling TV, isn’t proving to be as popular as expected.

The combination of DirecTV with AT&T also puts Dish at a competitive advantage, since AT&T can offer bundles of service (including mobile telephone) at competitive prices. Satellite TV has always been at a disadvantage to cable and fiber optic services due to issues with reception during inclement weather and the inability of some home and apartment sites to “see” the satellites, ruling out installations.

In my neighborhood, several folks canceled service from Comcast in recent years and picked up Dish and DirecTV as a cost-saving measure, only to drop both when Verizon laid fiber optic cables for FiOS and offered some low-cost, triple-play bundles that Dish and DirecTV couldn’t beat. (Internet service via satellite isn’t exactly fast and reliable.)

Right now, Dish’s most valuable asset is the UHF frequency spectrum acquired in FCC auctions- but it looks like that spectrum may go back for re-auction next February. And the DirecTV / AT&T juggernaut may force Dish into a merger to stay alive – or perhaps an outright sale.

So things aren’t looking too good for pay TV service providers? Not according to TDG Research. In a story on the Multichannel News site, TDG claims that “the percentage of adult broadband users (ADUs) who were moderately or highly likely to cancel their pay TV service in the next six months dropped 20% since last year.”

TDG went on to say that the group of consumers saying they “definitely will cancel” their pay TV service in the next six months has been cut in half — down from 2.9% in early 2014 to 1.4% in early 2015.” They cite the fact that Comcast only lost 48,000 video subscribers in Q3 2015, as opposed to 81,000 in the same quarter a year ago.

The problem with opinion surveys vs. market trends is that opinions can change abruptly. After a series of mishaps with Comcast’s Xfinity platform earlier this year (and well-documented on this site), I was about ready to throw in the towel and switch over to FiOS myself! But after my original complaint was resolved (replacing the buried cable from the drop to my house) and I wound up with a new modem (802.11ac 2.4/5 GHz), plus much faster Internet speeds and new Xfinity set-top boxes, I decided to stay with the devil I know – for now.

So the TDG data may reflect consumer preferences right now, but what will actually happen remains to be seen when the next set of quarterly data becomes available in January or February of next year.

There’s no arguing with numbers, however. From the Digital Entertainment Group (DEG) comes a report that consumers spent more money on digital video downloads and video streaming through the first nine months of 2015 than on rentals and purchases of DVDs and Blu-ray discs.

According to a story on the TWICE Web site, consumers forked over almost $6.5 billion on downloaded and streamed videos. The “digital” category includes subscription streaming and video-on-demand (VOD), plus digital downloads such as movies to tablets and smartphones. (Like I do when I fly cross-country).

In contrast, the dollar amount spent on rentals and purchases of optical disc media amounted to $6.3 billion – close, but still in 2nd place. From January through September, revenue from downloads and streaming rose by almost 16% Y-Y, while revenue from DVD/BD purchases declined by 14% and disc rentals dropped 7.1%.

Within the streaming/downloads category, the lion’s share of revenue (3.65B, or 57%) went to subscription streaming, while digital downloads captured 21% or $1.34B. The rest went to subscription video-on-demand ($1.41B, or 22%).

What’s interesting is that in 2014, the DEG states that “consumers spent more on physical media, about $6.93 billion, compared with $7.53 billion spent on digital downloads and streaming.” Overall, that means that in 2014, consumers whipped out their credit cards to the tune of $14.46B, or about $1.2B per month. Through September of 2015, that number is $12.74B total, or $1.42B per month – an increase of about 15%.

So there you have it. Cord-cutting (or “dish dumping”) is on the rise. Or maybe it isn’t, if we are to believe the preferences of consumers. Or maybe it’s the HDMI cable we’re cutting, preferring to stream and download videos as opposed to playing them back from optical discs.

One statistic I wish the DEG would delve deeper into concerns the installed base of Blu-ray players – almost 80 million households own one now, according to DEG. But how often are they used for playing movies, as opposed to streaming movies and TV shows from Netflix, Hulu, Amazon Prime, and other services? We just don’t know.


Dolby Vision Will Soon Be Available in a Consumer TV Set

In early October, VIZIO and Dolby Laboratories announced pricing and availability of the VIZIO Reference Series TV sets, which the companies described as “the industry’s first-ever complete High Dynamic Range solution with Dolby Vision™ playback technology.”

The series consists initially of two models, one of which you might be if you’ve had a good year, and one that Bill Gates might buy if he’s so inclined. The model you might buy is the RS65-B2, a 65-inch set with an MSRP of $5,999.99. The Bill Gates model, the RS120-B3, has a 120-inch screen and an MSRP of $129,999.99. Enough said about that one.

But even the 65-incher has very impressive specifications. Among them are:

VIZIO's RS65-B2 will be the first consumer TV to incorporate Dolby Vision. (Photo: VIZIO)

VIZIO’s RS65-B2 will be the first consumer TV to incorporate Dolby Vision. (Photo: VIZIO)

• Ultra HD
• Full-array LED backlight with “an uprecedented” 384 Active LED Zones®
• A quantum-dot panel that produces a significantly wider color gamut
• Peak luminance of 800 nits
• VIZIO V6 processor with quad-core GPU and dual-core CPU
• Integrated 802.11ac dual-band Wi-fi
• Integrated sound bar and sub-woofer and surround speakers.
• FHD-to-UHD spatial scaler

The knowledgeable readers of may guess that the quantum-dot solution that marries most obviously with a full-array backlight is the Nanosys/3M QDEF approach. VIZIO generally doesn’t reveal the identity of its hardware partners, but industry sources confirm that Nanosys/3M is indeed the supplier.

Although it was not included in the recent announcement, VIZIO has revealed separately that the RS65-B2’s color gamut is 120% of DCI-P3, which is also 87% of Rec.2020.

VIZIO is attempting to relieve the concerns many potential customers have with the lack of UHD media by immediately giving buyers of the RS65-B2 access to UHD content. “Customers will receive immediate access to certain Warner Bros. Home Entertainment 4K Ultra HD Dolby Vision mastered titles via the popular video on-demand streaming service, VUDU®. Additional Dolby Vision titles from other content providers will soon be available through Netflix®,” the company’s announcement said.

As an example, Warner Bros. Home Entertainment continues to introduce remastered Ultra HD Dolby Vision titles. The most recent are San Andreas, Mad Max: Fury Road, Magic Mike XXL, Jupiter Ascending, Man of Steel, and The Great Gatsby. An ongoing list of upcoming titles available for streaming in Dolby Vision can be found at

Netflix has also committed to remastering content in Dolby Vision and is expected to deliver season one of its adventure drama Marco Polo as its first Dolby Vision release via the Netflix app soon. Netflix will also offer the new season two of Marco Polo in Dolby Vision.

VIZIO’s Reference Series TVs aren’t available yet, but you can pre-order through the VIZIO website.

Just in case I’ve swamped you with details, let me emphasize that my take-away from all this is that Dolby Vision will soon be available in a consumer television at an unprecedentedly low price. And its easy to envisage lower-cost sets, perhaps with fewer LED zones, appearing in the not-too-distant future.

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, manufacturing, technology, and applications, including mobile devices and television.  He consults for attorneys, investment analysts, and companies using displays in their products.  You can reach him at

One Man’s Junk IS Another Man’s Treasure!

Next March marks a defining moment in the history of broadcasting: The Federal Communications Commission will hold an auction to see if TV stations REALLY want to stay on their UHF channels, or sell their spectrum space off to the highest bidder and either (a) move to another UHF channel, (b) move to a VHF channel, high or low-band, or (c) just throw in the towel and be done with broadcasting for good.

I’ve been alive for enough decades to remember when UHF TV reception was mostly black magic, and stations located in that band (originally from channels 14 through 83) were desperate to get a few hundred viewers. Some TV markets found the only way they could get licenses for broadcasts was to use these forlorn, unwanted channels; Scranton, PA being one example.

For my senior thesis in college in the mid-1970s, I wrote about the FCC’s All Channel Receiver Act of 1962, which mandated that “…that apparatus designed to receive television pictures broadcast simultaneously with sound be capable of adequately receiving all frequencies allocated by the Commission to television broadcasting.”

In an era where the major networks (ABC, CBS, and NBC) had the “plum” low-band VHF channels and some high-band VHF channels locked up, UHF was the only place to go. And it cost twice as much to operate a UHF transmitter and achieve comparable signal coverage, but without enough viewers, it was difficult if not impossible to attract enough advertising.

A year later in graduate school, I followed up on this topic to see how effective the ACRA had been to accomplish parity between VHF and UHF TV stations. Truth be told, the picture didn’t start to look rosy for UHF stations until the 1980s, by which time the band had been truncated to channels 14-69. But TV tuner performance had improved markedly, and many public TV stations started lighting up as did some high-power independent stations, translators, and repeaters.

With the advent of digital TV in the early 1990s, interest in UHF broadcasting picked up as it was discovered that UHF DTV signals penetrated into buildings much better than VHF signals. And UHF signals didn’t require very large antennas – even a small bow-tie loop antenna was sufficient to do the trick.

As the digital TV transition wound on, successive generations of DTV receivers came to market, employing ever-powerful adaptive equalizers to overcome the effects of multipath. When the time came to make the move to DTV and abandon analog NTSC forever in 2009, many stations also abandoned the once-prized low band VHF channels (2 – 6) in favor of high-band channels or “low” UHF assignments.

So, in a period of about 50 years, UHF channels went from being worthless real estate to prime property. (Just like fracking!) And it wasn’t just broadcasters who coveted it – the mobile phone companies, led by the CTIA (Cellular Telephone Industry Association), CEA (Consumer Electronics Association), and service providers including Verizon, AT&T, and Sprint were also casting a covetous eye on these frequencies.

Their case was bolstered by former FCC chairman Julius Genachowski, who claimed as the DTV transition was happening that we were facing a “wireless spectrum crisis” and that at least 120MHz of broadcast spectrum needed to be freed up for “wireless services” to solve the problem. (Never mind that TV channels 52 through 69 had just been returned to the government by broadcasters as the 2009 transition took place).

Depending on whom you talk to, the percentage of Americans who still watch over-the-air (OTA) television measures as low as 8% and as high as 20% – and that skews differently by geographic location and ethnic group. Still; if you accept a practical number of 15%, it’s easy to see why there is increasing demand by wireless companies for those UHF channels.

Accordingly; seven years after the DTV transition, we will see an open auction where broadcasters can entertain bids for their channels, or conduct a reverse auction by setting a minimum bid and see who antes up. A few days before I wrote this column, the National Association of Broadcasters released the list of minimum bid prices posted for TV stations (many of whom are on VHF channels, surprisingly!).

And the buy-in prices are staggering. Want to buy CBS’ flagship channel 2 (physical channel 33) TV station in New York City? A cool $900,000,000 (that’s $900 MILLION) is the opening reverse auction bid. Down the street, Comcast’s WNBC-4 (physical channel 28) starts at $869 million. And both those prices are to take the stations off-air for good: To relocate WCBS to a UHF channel – if one can be found – will cost a bit less; just $675M, while WNBC will require about $652M.

How about Los Angeles? You can kick KABC-7 off the air for just $305M, although no one is exactly pining for high-band VHF channels to provide mobile phone service. KCBS’ UHF channel can be vacated completely for a minimum bid of about $545M, or moved to another UHF channel for around $218M.

There are also some relative bargains out there. KXGN in Glendive, Montana will pull the switch on its UHF station for just $1.2M. (That’s the #210 and smallest TV market in the 50 states.) In Watertown, New York (near where my father grew up), there are several VHF and UHF stations that make up the #177 TV market. You can move any of them off the air for $45M to $88M, with the highest reverse bid being that of the local PBS station.

What do these prices tell us? First off, it would appear that many major-market broadcasters aren’t all that interested in shutting down operations, based on their astronomically high reverse bid prices. That is good news for cord-cutters and automobile dealers; the latter being the #1 source of ad revenue for TV stations. The prices for relocating channels are much lower than those for turning off the switch, which means that both independent stations and network-owned stations still see quite a bit of value in holding onto a 6 MHz digital channel someplace.

Secondly, in an industry where just about every American has a mobile phone and where price erosion is the story of the day (two-year contracts are going the way of the dodo, and voice and text plans are basically free these days), the likes of Verizon and AT&T aren’t likely to shell out hundreds of billions of dollars to expand LTE services. But we may see new companies coming in to offer wide-area Wi-Fi service, although that didn’t work out in the past with WiMax.

Third, anyone whose living depends on wireless audio operations could be in real trouble if more UHF channels TV disappear. In some worst-case studies I’ve seen, we could lose everything above channel 26. Or maybe just everything above channel 44. Or, we might see some TV broadcasts relocated to open UHF channels, intermixed with LTE, Wi-Fi, and white space devices. And there will be new “duplex” guard bands in the reallocated spectrum. (In any case, the sacrosanct nationwide channel 37 will remain so – for now.)

The truth is; no one really knows how any of this is going to play out. Will media giants like CBS decide they don’t need to be in the TV station business anymore? How about CBS affiliates? Would ESPN decide to do subscription DTV broadcasts, direct to viewers? Would Comcast continue to operate its owned NBC TV stations? How will public broadcasters be affected? Can we really dovetail TV broadcasts and LTE networks together?

And what happens if the FCC doesn’t get enough stations to participate? How much spectrum are they really looking to recover from broadcasters? Have we seen the last of these TV spectrum auctions for a while? (Bear in mind the current FCC chairman, Tom Wheeler, once ran the National Cable Telecommunications Association (NCTA) and CTIA. Food for thought!)

Talk about March Madness! Stay tuned…

What Will Apple Do Next?

Whenever I hear this question, my curmudgeonly inclination is to answer, “Who cares?” Perhaps a better question is “What revolutionary new product would allow Apple to continue earning profit margins far larger than the industry average?”

In fact, it’s very hard to imagine Apple coming up with such a product.

iWatch, iBust. The financial analyst class, with very few exceptions, entered into group hysteria, predicting iWatch sales of many tens (or even hundreds) of millions in the first year. It didn’t happen, of course, with smart watches in general remaining a solution in search of problem. The problem for which some people do want a solution is being solved very well and far less expensively by “fitness bands.” You can see how this could have looked tempting to Apple, which has had great success in the past refining existing products to the point they became attractive to large numbers of consumers. This worked very well with the iPod, the tablet, and the smart phone. But there was no Apple magic that could make people want a product they didn’t find useful.

Apple TV (the TV). There is recurring speculation about what a wonderful TV set Apple could make. Really?

The new Apple TV -- the streaming box, not the long-promised and non-existent television set. (Photo: Apple)

The new Apple TV — the streaming box, not the long-promised and non-existent television set. (Photo: Apple)

What can Apple do that Samsung, LG, Sony, Panasonic, and Sharp are not doing or developing right now? It certainly isn’t the display. The only potentially revolutionary display technology is micro LED, and that is years away from large-screen applications. For those who suspect that Apple could revolutionize television with its software expertise, we need look no farther than the new Apple TV (the streaming box). This is a good high-end product. It contains all of the up-to-date features it should have and is very likely to be a success. But there’s nothing revolutionary here, which is not surprising.

The Apple car. Give me a break. Why would Apple want to get into the automobile business, and area in which it has no expertise. There has been only one successful new car company formed in the U.S. since World War II. That’s Tesla, and it was based on filling a completely empty niche: the high-performance, long-range, fully electric car. At that, it’s something of a miracle that Tesla is succeeding, and Elon Musk deserves a lot of credit.

It has been noted that Apple is hiring car people. I strongly suspect that is not to make an Apple car, but to work on iOS versions for connected cars. This is an area where Apple has a lot to contribute, but it’s not a consumer product. Apple would not be the first company to use expertise gained in the consumer electronics world to enter the industrial market. Panasonic has been doing it for years, with highly successful businesses in airline entertainment, automotive electronics, and industrial batteries, including those that power the Tesla.

So what is the revolutionary new product Apple will make next? There isn’t one.

Ken Werner is Principal of Nutmeg Consultants, specializing in the display industry, manufacturing, technology, and applications, including mobile devices and television. He consults for attorneys, investment analysts, and companies using displays in their products. You can reach him at

Display Interfacing: Welcome to Babylon

For many years, ‘interfacing’ a video signal meant plugging in a yellow RCA or silver BNC connector that carried composite video. As picture resolution went up, computers became commonplace at work and home, and the term ‘progressive scan’ entered the lexicon, we saw the birth of S-video and then component video (YPbPr and RGB).

So we adapted, building switching and distribution gear that could handle one-, two-, and three-wire formats. All was well and good…until ‘digital’ made its grand entrance about 15 years ago.

Now, we have digital versions of component and RGB video, starting with the Digital Video Interface (DVI) and moving to High Definition Multimedia Interface (HDMI), DisplayPort, and the new superMHL interface that (according to the MHL Alliance) will start appearing on televisions as soon as December.

If I’m a consumer, I mostly don’t care about any of this. As long as I can plug in my set-top box, Blu-ray player, and other gadgets with the right cables I can find at Best Buy, this is just a bunch of alphabet soup.

However, if I’m an integrator (consumer or commercial), then I care VERY much about where all of this is heading. And if I’m paying any attention at all to the growing market for 4K and UHD, then I’m rightfully concerned about the impending problems with interfacing these signals.

superMHL is certainly fast enough to handle UHD. But you can't find it in use yet. is there a better way?

superMHL is certainly fast enough to handle UHD. But you can’t find it in pro AV gear yet. Is there a better way?

Consider that:

*Even though HDMI 2.0 was announced in September of 2013 – TWO FULL YEARS AGO – virtually no manufacturer in the pro AV space supports this interface on their switchers and distribution amplifiers. Instead, the vast majority are still providing version 1.4 while claiming these products are “4K compatible” or “4K ready” because version 1.4 is just fast enough to pass an Ultra HD (3840×260) signal at 30 Hz with 8-bit RGB color. That’s setting the bar kinda low, isn’t it?

*Some computer manufacturers don’t even support HDMI, like Apple (DisplayPort) and Lenovo (also DisplayPort). So, now you have to carry dongles everywhere you go?

*HDMI 2.0 arrives hand-in-hand with a new version of copy protection (HDCP 2.2) which is much more rigorous than versions 1.3 and 1.4. If a valid HDCP key exchange isn’t made within 20 milliseconds, the connection will shut down. Period.

*HDMI 2.0 isn’t fast enough for what UHD is turning out to be – a real departure from 1080p and Wide UXGA, with a move to 10-bit color to support high dynamic range (HDR), wide color gamuts (WCG), and high frame rates (HFR). DisplayPort 1.2 can barely support these requirements; DP version 1.3 and super MHL are better positioned to handle the job.

*The intellectual property behind HDMI and superMHL is owned by the same company – Lattice Semiconductor – and whereas once there were clear dividing lines between the two interfaces (MHL was designed originally for smartphones and tablets), they are now competing against each other. I’ve even sat in on presentations where it was explained that both could exist on consumer TVs. (And why would that make sense, again, when neither interface has been widely deployed to date, and one is clearly an improvement over the other?)

You can imagine what this trend is doing to product designers and manufacturers. Sure, HDMI is a “safe bet” for now, but what if our UHD needs quickly outstrip its maximum clock speed? DP is certainly faster and there appears to be more support for it from computer manufacturers. But super MHL is faster still. Shouldn’t your interfaces at least have a head start on display manufacturers?

This reliance on HDMI has led several manufacturers into a potential trap, investing heavily on signal distribution architectures that may quickly run into a “future-proofing” problem. In contrast; outside the commercial AV industry, everyone from cable TV system operators to broadcasters and telecom operators are busy migrating to an IP-based architecture.

Not only does IP-based architecture have the advantage of being a relatively open system, it also solves many of the speed issues as 1-gigabit and 10-gigabit networks are becoming more commonplace. (Heck, Comcast just upgraded my home Internet speeds to 75 Mb/s on downloads, which is more than fast enough for me to stream 4K content from Netflix and Amazon!)

So, why don’t we do the same in the commercial AV industry? It’s not for a lack of products – there are several companies offering AV-over-IP transmitters and receivers, along with encoders and decoders. I’ve also seen impressive demos of “middleware” used to locate, switch, and play out media assets over IP networks. All of these guys were at InfoComm 2015.

The big players in HDMI-based switching and distribution argue against AV-over-IP for in-room and short-run signal distribution, citing latency and compression issues. Well, we now have a new codec (HEVC H.265) to handle that end of things, and it’s possible to stream video and high resolutions with low latency. (How does 1920x1080p/60 at 1 to 2 Mb/s sound to you? Thought so.)

High latency is often the result of over-compression and heavy forward error correction (FEC). But if video and audio assets are streaming on bandwidth-managed, private IP networks, there isn’t a lot of forward error correction required. Group of Pictures (GOP) sizes can also increase to reduce latency. So latency is sort of a “straw man” argument. (And HDMI 2.0 will have plenty of issues with HDCP 2.2, trust me. Talk about latency…)

As for copy protection; video and audio assets streaming over IP connections have their own security protocols. Practically speaking, what could be more secure than video content streaming directly into a UHDTV, through an Ethernet connection? And you don’t even have to plug in a cable to make it work, unless you use a wired Ethernet hookup. Bandwidth issues? Well, how about 5 GHz 802.11ac channel-bonding routers? I’m getting 70+ Mb/s download speeds from mine with wired connections, and 25 – 30 Mb/s some distance from my 5 GHz wireless link.

Again, looking outside our industry, the two most common signal distribution and switching architectures are based on HD-SDI or IP (or both). Not HDMI, and certainly not HDMI-derived, structured-wire systems like HDBaseT. If the rest of the world wants to multiplex video, audio, metadata, and other low bitrate control signals, they do it over optical fiber. (Did you know that multimode fiber is cheaper than Category 6 wire?)

I’ll wrap up thing by saying that the smart move is for commercial AV integrators to move to an AV-over-IP signal distribution system at the core like everyone else, leaving the HDMI, DisplayPort, superMHL, and “whatever comes next” connections for the far ends, near the displays (if those far-end conversions are even needed at all).

Leave the core as a high-speed, copper bus or optical bus, software-based switcher. If there’s enough bandwidth (and there should be), that system can also carry local TCP/IP traffic, SMTP alerts from connected devices, and control signals to all devices. Not only does this approach free everyone from the “closed world” paradigm of HDMI, it also makes the system infinitely more appealing to end-users and facility administrators, an increasing number of whom come from the IT world.

Consider this ad that was posted recently on a listserv for higher education:

“We are looking for an experienced AV-IT Engineer for the role of Technical Guru. The position will provide planning and support for AV-IT systems used in teaching and learning spaces big and small. The person in this position will focus on design, installation, and troubleshooting of AV-IT systems in a variety of venues, including traditional classrooms, active learning classrooms, large auditoria, computer labs, and even Makerspaces…We are looking for a seasoned professional with a solid background in AV-IT systems. This is a great opportunity for a doer who is excited about not just maintaining but also shaping the future of AV-IT technology as a key element of the teaching mission of one of the world’s top universities.”

I rest my case. It’s time for the commercial AV industry to get in step with the rest of the world and move to AV-over-IP signal distribution.

Wake up. Have you smelled the coffee yet?