|
With its money-making potential and no shortage of willing technology partners, datacasting may be the light at the end of the costly digital conversion tunnel for television station operators.
But before they can jump into this revenue stream, stations must still endure a ponderous transition to digital broadcast, defend data transmission to the government as a proper usage of their frequency allotments and choose the right technology to deliver the goods.
Datacasting allows broadcasters to funnel Internet Protocol data traffic alongside their video signals using their 6 megahertz digital channel allocation. That information can be flowed either to an Internet-enabled digital set-top box or to a computer equipped with a video tuner card.
Though a new technology, datacasting isn't suffering from a shortage of startup companies making various pitches to help television stations tap this new revenue stream.
One such company is iBlast Inc., a joint partnership among 225 stations owned by major broadcasting companies, including Cox Enterprises Inc., Gannett Company Inc., The McGraw-Hill Companies Inc., The New York Times Co. and Tribune Broadcasting.
After a series of tests at stations in San Diego, Los Angeles and San Jose, iBlast plans this month to light up its network operating center in Los Angeles and start datacasting in earnest. It expects to add 20 stations per month to its network by August.
With the technology end firmed up, the next step is in gathering content clients. Although he can claim no deals inked, Lambert says iBlast is in talks with major movie studios-and they are hot to tap datacasting as a direct movie distribution line.
"We are a way to get a lot of movies into people's homes efficiently," says iBlast CEO Michael Lambert. "There's a desire on the part of the movie companies to get directly to the customers without going through the middle players. They've been talking to us about a lot of plays-some of which are about a proprietary set-top box and others directly to the PC."
Those talks revolve around a pay-per-view or video-on-demand scheme, depending on whether the studio wants a streaming media product viewed in real time or a downloadable product users record on a hard drive either permanently or for a set rental period.
Growing a content distribution business takes time, but Lambert says the company has funding through the end of 2001. "We come at this as co-owned by broadcasters, so we are interested in using the best tools and content to monetize the spectrum," Lambert says.
For fellow datacasting startup Wavexpress, focusing on the transmission technology is the way to go. The New York City-based company is a joint venture between Wave Systems Corp. and Sarnoff Corp.
Wavexpress already has beta tested its datacasting system in six southern California stations is planning a full service rollout in late 2001 into 2002. To receive the data, a user must have a computer with a minimum 10-gigabit hard drive and a digital TV tuner card, now available at retail. Users watch the content via a Microsoft Internet Explorer-based browser.
For users, Wavexpress's digital download strategy-transmitting data in the wee hours of the night when bandwidth usage is low-gets around vexing Internet bottlenecks. "The beauty of it is, we allow the consumer to purchase differently than they have done before," says Brian Hickey, Wavexpress's vice president of marketing. "If you broadcast content in the off-peak hours to their hard drive, people can access it without the speed issues of the Internet."
While it may provide the transmission conduit, Wavexpress has no interest in becoming a content provider. Instead, it will sell its technology to broadcasters, who in turn make arrangements with data content providers.
"So our model is to provide a very wide range of business models to develop their own e-commerce," says CEO Cliff Jenks. "We don't want to dig the holes. We want to sell the shovels."
Yet another competitor with its own datacasting twist is Dotcast. The Palo Alto, Calif.-based company sets itself apart from the pack by offering an interim analog datacasting system that can be converted once digital becomes mainstream. Dave Atkinson, CEO of Dotcast, says the conversion will consist of adding a coax cable from Dotcast servers to the digital signal towers.
"Digital TV rollout is not what anyone would have hoped it would be," Atkinson says. "Our view is we can help broadcasters get into their service delivery much faster than they can build out their DTV towers."
Dotcast will begin building out its network infrastructure this year, primarily in an analog format but using digital datacasting where possible. Even with analog, the service promises to deliver a respectable 4.5 megabits per second.
"With the snail's pace of DTV rollout, of course content partners are saying 'Once you have a system that works, sure, we'll talk to you,'" Atkinson says. Offering an analog system up front uses the existing transmission systems, so "they see that audience materializing much sooner than our competitors."
In the near term Atkinson says the likely content kings of datacasting will mirror that of the Internet. "Napster has proven at least 40 million people are willing to endure a 56k dialup to listen to music," Atkinson says. With the ability to transmit music files at broadband speeds, "music is clearly an application that makes economic sense for us."
Dotcast also is targeting full-motion video for the PC as well as video aimed at TV sets. Software, too, is a good match for Dotcast's transmission system, Atkinson says.
Still, datacasting has its detractors. Using part of the digital allocation for datacasting has raised some questions, most notably by Federal Communications Commission Chairman William Kennard. In July, he sent a letter to National Association of Broadcasters chief Edward Fritts, saying he was concerned some broadcasters might be straying from their television service roots. "While I have urged broadcasters to develop new business models for digital television, in addition to high definition television (HDTV) programming, it is wrong to read into my comments that broadcasters should abandon their core business of television," Kennard concluded.
But Jenks argues broadcasters don't have to slight bandwidth-hungry, high-definition TV in favor of a datacasting business. "You can still transmit full-motion video at 1080i and 2 megabits per second of data," the Wavexpress CEO says. With better compression schemes now available, "if you are just transmitting digital pictures you not even using half of the bandwidth."
iBlast's Lambert says the new revenue stream from datacasting is actually encouraging stations to make the leap to digital. "I think it is going to be accelerated, because especially in small and medium markets we can give them new revenue streams," he says. "So it encourages local stations to build out their digital system faster."
In the end, Lambert thinks datacasting actually will give the public a better idea of a broadband product. "We just think we get teased with TV commercials and magazine ads about what broadband content will be like in the home," he says. "Even with DSL and cable that's not really broadband. We are 7 megabits per second bursting to 14 megabits per second. So we really are broadband."
|
