News | June 16, 1999

Montreux Wrap-Up: Industry Debates Future of Digital Television in World Forum

By: Tom Butts

MONTREUX, SWITZERLAND—Television industry decision makers from around the world gathered in this Swiss resort town this past week to debate and exchange ideas on the developing digital television marketplace. The focus was primarily European and American-centric and while the two continents may take differing views of the technology, agreement was universal on one point—digital television is revolutionizing the business dynamic for broadcasters, cable, and satellite alike.

Throughout its 30-plus years of existence, the Montreux Symposium has provided a relaxed, picturesque setting for the world's broadcast industry to compare notes. The Symposium, which until now, was held on a biennial basis, is now scheduled as an annual event. In an effort to distinguish itself from NAB and IBC, held in Amsterdam in the fall, the forum's organizers have decided to focus more on seminars emphasizing new technology and business models and less on exhibitions.

Whether the new focus is the reason for the severe drop in attendance—unconfirmed reports indicate only 20% attended compared to the last gathering in 1997—forum executives have decided, for the time being, to continue the event into next year.

Despite the low turnout, attendees had plenty to discuss—since the last Symposium, US broadcasters have initiated digital broadcasts and HDTV sets are now hitting the showroom floor. Likewise, the European television industry has seen an explosion in new digital television services, primarily in the satellite broadcast sector.

When it comes to digital television, however, Europeans and Americans are not on the same wavelength. American broadcasters, for the most part, are heavily promoting the quality and experience of HDTV, while Europeans have turned their back on the higher resolution format and are instead, focusing on new services and more channels in the DVB standard.

Granted, both continents are starting from different economic models—in the US, commercial broadcasting drives the new technology, while in Europe, public broadcasting holds a more dominant role in the marketplace. Europeans have to deal with numerous languages and differing cultures. It is these facts that are shaping the business model for digital television in the two areas.

The two sides had a chance to air their differences at an opening day debate on the various approaches to the technology.

"HDTV is simply not a concern for us on a daily basis," declared Guillame Cheneviere, director of TSR (Geneva, Switzerland). "At the moment, what is more important to the viewer is more channels and new services."

Cheneviere emphasized that in Europe—where it seems that every other person is equipped with a mobile phone—the public is more interested in new telecommunications technology than in HDTV, which he described as "passive entertainment."

The American contingent at the forum made its case for HDTV, warning Europeans that as American television networks increase production of HDTV programming, European programmers producing in standard definition will be shut out as other countries, notably Japan, Brazil, Australia, and Canada move towards an HDTV future.

"Any programmer who wants to compete in the international program exchange market is going to have to produce in HDTV," said Dick Wiley, former chairman of the FCC's Advanced Television Advisory Committee. "‘Good enough for now' television simply may not be good enough in the digital era."

One American television executive expressed concern over the ability of digital television sets sold in Europe to decode HD signals—a significant concern considering that over 80% of programming shown in Europe from overseas originates in the U.S and that an increasing amount of that programming will be in HD.

"The issue, as I understand it in Europe, is that the receivers do not have high definition decoders," said Joe Flaherty, senior vice president, engineering, CBS (New York). "And if you broadcast the high definition program, those receivers are going to say ‘I don't recognize this bitstream, I'm going to go dark'… the receivers being made in Europe are the big mistake, in my opinion, because it subtracts your ability to ever transmit high definition."

HDTV, at the moment at least, provides very little return on investment, according to one French manufacturer.

"In the 80's, everyone thought HDTV would be a mere replacement and enhancement of the existing broadcast business," said Jacques Sabatier, Director General for Thomson Broadcast. "No broadcaster could find an economical reason to move toward HDTV. Ten years later we still don't have an answer—if the broadcaster has one alternative only, which is to broadcast in one channel—I don't see how he can get his investment back."

One British manufacturer, who clearly is bullish on the American HDTV market, chided his fellow Europeans for moving away from HDTV.

"If progress is going to be the law of the future, it's clear that high definition must be where it's at," said David Youlton, CEO for Snell & Wilcox, a Hampshire, UK-based manufacturer of imaging systems. "I hate the idea of Europeans being ostriches with their heads in the sand."

Despite their differences over the future of the technology, both sides couldn't ignore the irony of holding a debate over picture quality in one of the most spectacularly scenic areas on earth.

"This is one of the nicest spots in the world," said Gary Shapiro, president of the U.S.-based Consumer Electronics Manufacturers Association. "Think about Montreux when you think about HDTV."