1 digital tv development: techno-economic planning considerations john yip chief engineer radio...
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Digital TV Development: Techno-Economic
Planning Considerations
John YipChief Engineer
Radio Television Hong Kong28 March 2007
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1. Introduction Proposing a systematic and practical
methodology for analyzing the numerous factors influencing the rollout/ growth of digital TV technologies.
Focusing on the application of basic economic concepts to facilitate strategic development. Reducing guesswork.
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2. Delivery Systems
DTT/HDTV ATSC ISDB-T DVB-T DMB-T/H
The choice of a delivery system may affect rollout/ growth. However, growth depends also heavily on market dynamics and rapid technological adaptation of manufacturers.
IPTVADSL/ADSL2(for IPTV-SD)
ADSL2+/ VDSL2(for IPTV-HD/SD)
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2. Delivery Systems
Mobile TV(Broadcast)
T-DMB S-DMB DVB-H MediaFLO
CMMB / STiMi
T-MMB DMB-T/H
Mobile TV(Cellular)
3G3.5G /
HSDPAUMTS/ MBMS/
TD-CDMA(TDtv)
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Driving Force, DF
= function of (soft factors, hard factors)
= M (r, p, m, o) * H (G, g)where M = soft factors (rregulatory, ppricing,
mmarketing, oother), and
H = hard factors (GG for macroeconomic, gg for geo-physical)
3. Generic Growth Equation and Methodology Equation (for current/ future digital technologies)
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Soft Factors Hard Factorsr : Licensing, spectrum
allocation, etc.
G : GDP, GDP-per-capita
p : Pricing (subsidies,
bundling, penetration or
predatory pricing) etc.
g : Geographical or physical,
such as terrain or the area of
a city.
m : Marketing and promoting.
o : Content, consumer
habits, preferences, etc.
Generic Growth Equation, soft and hard factors
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Figure 1. S-Curves with picture quality as the performance measurement
Source : Technology Strategy, 15.912, Spring 2005,
MIT, Sloan School of Management
S-curves of technological diffusion
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Growth (Penetration,
%)
Baseline growth
Soft factor effects
Time (Years)0
Generic Growth Equation, illustrating acceleration by soft factors
S-curve for growth (growth at 15% pa or more is strong; 5% pa or less is weak)
Critical Mass
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GDP-per-capita is significant if there is a significant outlay, e.g. for an HDTV display, and/ or a recurrent fee, e.g. in a pay-TV service, over an initial service period of 1-2 years.
Regulation can prevent new players from entering the market; minimizing barriers enhances growth.
International cooperation and IPR ie transaction cost minimization could allow world-wide use of a digital TV system, analogous to the Coase Theorem (R. Coase, 1959) in economics, on the allocation of property rights re radio frequencies.
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Proposed process : Form a development team. Analyse hard factors, to form a baseline. For r, p, m, o, compile separate lists of
relevant considerations. Assess soft factors through group discussions/
market surveys (eg using Delphi Method). Analyse critical issues; synthesize a roll-out
strategy. Liaise with the government where necessary.
Methodology, using growth equation
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4. HDTV
Soft Factor
Hard Factor
GDP * GDP-per-capita, (or AI relative to 100)
Mh (r, p, m, o)
Propelling Factor, HDF
= Mh (r, p, m, o) * (GDP * GDP-per-capita)where GDP is based on the PPP (Purchasing Power Parity),(GDP * GDP-per-capita) = Affordability factor, and
Mh is a function of regulatory/ pricing /marketing /other factors.
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4. HDTV
AI Rank (2004)
Economies Regions AI (' 04) AI (' 06)AI actual (2006)
% AI Change (2006/ 2004)
AI Rank (2006)
1 United States N. America 100 100 5.65E+17 0.0 1
2 European Union EU 66.5 66.5 3.76E+17 0.0 2
3 Japan Asia 23.4 24.7 1.40E+17 5.7 3
4 Germany EU 14.4 14.4 8.12E+16 -0.2 4
5 United Kingdom EU 11.2 10.6 5.98E+16 -5.5 6
6 France EU 10.6 10.0 5.63E+16 -5.9 7
7 Italy EU 9.5 9.1 5.13E+16 -4.4 8
8 China, mainland Asia 8.6 13.5 7.60E+16 56.5 5
9 Canada N. America 6.8 7.3 4.10E+16 6.8 9
10 Spain EU 4.6 5.1 2.89E+16 11.2 10
11 Australia Asia 4 3.9 2.19E+16 -2.9 12
12 Korea, South Asia 3.8 5.1 2.86E+16 33.1 11
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On breaking down function M,HDF = (Ar * Ap * Am * Ao) * (GDP * GDP-per-capita)
Ar - mandating early rollout / cessation of analog TV, built-in digital tuners in TV sets, on-air HD quota, spectrum allotment, licensing regime, standardization;
Ap - subsidies by governments / operators, assisting viewers eg on HDTV STB;
Am - promotional/ marketing campaigns, to promote viewers’ awareness;
Ao - quality leap using HD (eg USA and S. Korea, using ATSC, have achieved fast rollout), increasing HD production and sourcing attractive HD programs.
4. HDTV
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5. IPTV
Propelling factor, IPDF
= Mi (r, p, m, o) * GDP-per-capita * Population Density,
= Mi (r, p, m, o) * GDP/population * population /areaHence
IPDF = Mi (r, p, m, o) * GDP /area
GDP/area (ie US $billion/ sq. km, PPP, pa) is analogous to annual crop yield in economic farming and harvesting; GDP is computed yearly; it is dimensionally similar to speed.
IPDF applies only to a city-sized economy but not to countries with large barren areas.
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Cities GDP (PPP)
(US $billion)
Area
in sq. km
Yield,
pa
Hong Kong 227.3 1,092 0.21
Singapore 124.3 693 0.18
Paris (Metro) 454 2,730 0.17
Potential, IPTV-SD
Estimated (GDP/ area) yields:
Source Data from World Fact Book and Wikipedia
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Cities Area
in sq. km
Yield,
pa
New York (City) 1,214 0.37
New York (Metro) 17,405 0.05
Tokyo 2,187 0.53
Potential, IPTV-HD, using IPDF estimate
Source Data from World Fact Book and Wikipedia
Estimated (GDP/ area) yields, these to be considered together with AI for HDTV:
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IPTV, Soft Factors (r, p, m, o)
Regulatory- licensing, cross-platform content-flow control;
regulatory hurdles to be minimized eg allowing cross-platform (terrestrial/ cable/ satellite) content-flow and leaving the market to decide.
Pricing
- smart and competitive bundling of channel services/ STB plus services, to entice consumers; penetration pricing, using a bundling of attractive program channels plus broadband internet/ VoD and other value-added applications.
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Marketing/ promoting
- advertising and promoting increase awareness and the perceived value (total use value or TUV) of the IPTV services.
Other factors
- varied contents could be offered, as there are numerous channels. Interactivity, shopping, games and VoD could be offered. FTTH/ FTTP will cater for a very wide range of services on PON (passive optical networks).
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Mobile TV is a complex subject due to numerous factors, including
Spectrum allocation Emerging standards and system maturity Handset designs/ functions and pricing Competition between broadcast and cellular
system operators Viewing habits/ reluctance/ lack of understanding Reception reliability in a heavily built-up city;
continued investment in maintaining mobile
reception reliability.
6. Mobile TV
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Propelling Factor, MDF = Mm (r, p, m, o) * GDP-per-capita *T
where T is the Terrain Factor (0 < T =< 1),
and MDF applies to a city-sized economy.
6. Mobile TV
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Terrain includes hills and housing estates. If terrain is flat, T = 1. T is a retarding factor, critical for pay TV. Dependent on frequency band, eg VHF for
T-DMB or UHF for DVB-H, and on technology (eg satellite/ terrestrial).
By combining satellite, terrestrial and cellular networks, T can be enhanced.
Terrain Factor
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Factors (r, p, m, o)
Regulatory- government-led or market-driven development.- allocation of RF spectrum (VHF, UHF, L and S bands)- licensing for broadcast and cellular operations.
Pricing
- handset cost and design eg battery life, antenna size, unit size and weight, screen size, channel switching/ signal recovery times, reception frequency bands, etc.
- Competition between broadcast/ cellular operators.
- In a built-up city, the costs of providing and maintaining a reliable network will be off-loaded onto consumers.
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Marketing / promoting
- to increase awareness of the technologies/ benefits and to raise the perceived value of services, hence increasing the demand.
- Promotion could take advantage of the young generation’s attraction to fashionable handset designs/ styles and to cultivate consumers’ habits.
Other factor
- content offerings (news, other real-time information, drama, sports, interactivity, short clips of compelling content including UGC).
- consumer habits and attitudes.
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6. Comparison. (G, g), (r, p, m)
GDP GDP/ capita Pop. Den. Terrain Regulatory Pricing Marketing
HDTV H H L L H H H
IPTV (HD), pay H H M L L H H
IPTV (SD), pay L M M L L M H
Mobile TV, pay L H L H H H H
Hard Factors (G, g) Soft Factors (r, p, m)
Table 1: Digital TV, Hard and Soft Factors (H/M/L = High/ Medium/ Low)
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6. Comparison. Soft Factor (o)
Content Consumer Habits Device Attributes Quality Leap
HDTV H L M H
IPTV (HD), pay H L M H
IPTV (SD), pay H L L L
Mobile TV, pay H H H L
Table 2: Other soft factors, eg large quality leap from NTSC to ATSC
Soft Factor (o)
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Use slide show and to animate. g= generic model, usable for powering your Digital TV boat)
Don’t miss the boat, the “Digital TV” boat.
Thank you.