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TV Ready for Massive Changes

By Eric Richard
Associate News Editor

As television signals move from the analog to the digital domain, speakers at last Friday's "Televisions of Tomorrow" session of the Industry Summit predicted a massive transformation in the way people view television and in the way information is presented.

Within five years television signals will routinely be distributed digitally, said Andrew B. Lippman, associate director of the Media Lab and chair of the session. This change will bring a revolution in the way people watch television by providing the technology necessary for video-on-demand, interactive services, multimedia applications, and a nearly unlimited number of channels, he said.

In addition, switching to the digital domain will make television sets much more intelligent. The television of the future will be a full home entertainment system in itself, with a full, built-in computer which will "allow you to program it and explore it in ways never possible before," Lippman said.

Televisions of the future will offer viewers personalization, interactivity, and customization, said Alfred C. Sikes, former chairman of the Federal Communications Commission and president of the New Media and Technology Group of the Heart Corp.

Sikes, focusing on the change that interactive television will bring, said, that television will become a medium for social interaction. "All of the things that can be done gregariously will be done interactively," he said.

"Television will be changing from individual, uni-directional to group-oriented," said Robert L. Carberry, chief executive officer of Fireworks Partners, an affiliate of IBM.

The resulting technologies will allow broadcasters to personalize broadcasts for a single individual, Carberry said. Broadcasters will shift from "narrowcasting" -- broadcasting toward the wants of a group -- to "pointcasting" -- broadcasting aimed at an individual.

"The scale of this transformation is immense," Lippman said. However, he noted that these changes are not the result of "a technological push," but rather are the result of a "convergence of technology," since many technologies are reaching the point to make these changes possible.

Cost of technology questioned

When an audience member asked, "Who is really going to pay for [the technology]?" each of the panelists addressed the issue of the actual costs associated with the technology and how they will be paid for.

Panelists agreed that new services like video-on-demand provide a massive market which will subsidize the costs of implementing the technology.

Similar to the current idea of pay-per-view movies, video-on-demand exploits the ability of broadcasters to send a signal to a particular household, and allow individuals to order a particular program at any given time. With the VCR video rental industry currently renting an average of 600,000 to 800,000 movies per night, "by any measure this is a tremendous opportunity," Carberry said.

Between video rentals, special events, and games, Carberry said that there is currently a $12 million market available for video-on-demand to tap into.

"If you are going to ask who is paying for it, you have to ask what they are buying," said Lippman, warning that the user will indeed face higher prices for televisions, since the services provided will be vastly expanded. "The value of those things taken together may be what turns your corners," he said.

Risks of new technology

With the ability for broadcasters to target individuals, the panelists warned that the issue of privacy becomes an important question. Under the new technology, advertisers would be able to specifically direct advertisements to those individuals who need a product most.

In one experiment, an individual's purchases at a supermarket were used to predict when the optimal time would be to direct advertisements to him, Carberry explained. "What is not clear is whether people want to know that you know that their toothpaste is about to run out," Carberry said.

The panelists also addressed what affect the new technology would have on the value content of programming. As with any sort of a massive public network, the barriers to entry are diminished, and the user has a much greater control over the content, Carberry said. Thus, with a nearly unlimited number of channels available, there would be a much larger amount of low-value programming. However, the panelists agreed that content will prevail and the programming viewers want will be what is available.

"In the world of infinite channels, we will be able to deliver arts economically," Sikes said.