Transcript Purchasing Card (P-Card)

Digital TV Development:
Techno-Economic
Planning Considerations
John Yip
Chief Engineer
Radio Television Hong Kong
28 March 2007
1
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.
2
2. Delivery Systems
 The choice of a delivery system may affect rollout/ growth.
However, growth depends also heavily on market dynamics
and rapid technological adaptation of manufacturers.
DTT/HDTV
IPTV
ATSC
ISDB-T
ADSL/ADSL2
(for IPTV-SD)
DVB-T
DMB-T/H
ADSL2+/ VDSL2
(for IPTV-HD/SD)
3
2. Delivery Systems
T-DMB
S-DMB
DVB-H
CMMB /
STiMi
T-MMB
DMB-T/H
MediaFLO
Mobile TV
(Broadcast)
Mobile TV
(Cellular)
3G
3.5G /
HSDPA
UMTS/ MBMS/
TD-CDMA(TDtv)
4
3. Generic Growth Equation and Methodology
 Equation (for current/ future digital technologies)
Driving Force, DF
= function of (soft factors, hard factors)
= M (r, p, m, o) * H (G, g)
where M = soft factors (regulatory, pricing,
marketing, other), and
H = hard factors (G for macroeconomic,
g for geo-physical)
5
 Generic Growth Equation, soft and hard factors
Soft Factors
Hard Factors
r : 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.
6
 S-curves of technological diffusion
Figure 1. S-Curves with picture quality as the performance measurement
Source : Technology Strategy, 15.912, Spring 2005,
MIT, Sloan School of Management
7
 Generic Growth Equation,
illustrating acceleration by soft factors
Growth
(Penetration,
%)
Soft factor
effects
Baseline
growth
Critical
Mass
Time
(Years)
0
S-curve for growth
(growth at 15% pa or more is strong; 5% pa or less is weak)
8

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.
9
 Methodology, using growth equation
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.
10
4. HDTV
Hard
Factor
Soft 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.
11
4. HDTV
AI Rank
(2004)
Economies
Regions
1
2
3
4
5
6
7
8
9
10
11
United States
European Union
Japan
Germany
United Kingdom
France
Italy
China, mainland
Canada
Spain
Australia
12
Korea, South
N. America
EU
Asia
EU
EU
EU
EU
Asia
N. America
EU
Asia
Asia
AI (' 04) AI (' 06)
100
66.5
23.4
14.4
11.2
10.6
9.5
8.6
6.8
4.6
4
3.8
100
66.5
24.7
14.4
10.6
10.0
9.1
13.5
7.3
5.1
3.9
5.1
AI actual
(2006)
% AI Change
(2006/2004)
AI Rank
(2006)
5.65E+17
3.76E+17
1.40E+17
8.12E+16
5.98E+16
5.63E+16
5.13E+16
7.60E+16
4.10E+16
2.89E+16
2.19E+16
2.86E+16
0.0
0.0
5.7
-0.2
-5.5
-5.9
-4.4
56.5
6.8
11.2
-2.9
33.1
1
2
3
4
6
7
8
5
9
10
12
11
12
4. HDTV
On breaking down function M,
HDF = (Ar * Ap * Am * Ao) * (GDP * GDP-per-capita)
Ar - mandating early rollout / cessation of analog TV, builtin 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.
13
5. IPTV
Propelling factor, IPDF
= Mi (r, p, m, o) * GDP-per-capita * Population Density,
= Mi (r, p, m, o) * GDP/population * population /area
Hence
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.
14
 Potential, IPTV-SD
Estimated (GDP/ area) yields:
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
Source Data from World Fact Book and Wikipedia
15
 Potential, IPTV-HD, using IPDF estimate
Estimated (GDP/ area) yields, these to be considered
together with AI for HDTV:
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
Source Data from World Fact Book and Wikipedia
16
 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.
17
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).
18
6. Mobile TV

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.
19
6. Mobile TV
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.
20
 Terrain Factor





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.
21
 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.
22
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.
23
6. Comparison. (G, g), (r, p, m)
Soft Factors (r, p, m)
Hard Factors (G, g)
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
Table 1: Digital TV, Hard and Soft Factors (H/M/L = High/ Medium/ Low)
24
6. Comparison. Soft Factor (o)
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
25
Don’t miss the boat,
the “Digital TV” boat.
Thank you.
Use slide show and  to animate.
g= generic model, usable for
powering your Digital TV boat)
26