Europeans Pioneer New Form of TV

By eweek  |  Posted 2001-05-14

For managers of interactive technology across enterprises such as hotel chains, residential buildings and office towers, the choice of service providers may be growing soon.

A new kind of broadcaster is getting into the interactive act in Europe, and could see an opportunity to undercut the cable and satellite competition in the U.S. using digital broadcast signals.

Known as digital terrestrial multiplex broadcasters, companies such as ONdigital in the U.K. and QuieroTV in Spain are battling cable by offering 30 or more channels — with interactivity — through a common television antenna. Combining their digital broadcasting with telephone service, the companies can provide complete high-speed Web surfing with premium channels.

"We see the digital terrestrial stuff in Europe at least as something to look at because its low-cost," said Gerry Kaufhold, principal analyst for broadband multimedia at Cahners In-Stat Group.

The system uses digital broadcast spectrum to send multichannel signals containing data and programming to local TV antennas. At the end users TV, an inexpensive set-top box — usually provided for free — translates the digital signal into an image on the TV screen that can be made interactive through a remote control or keyboard.

While the U.S. is steering its use of digital spectrum toward the high-bandwidth demands of high-definition TV, the Europeans are using the bandwidth for multiple channels. Without the demands of super-sharp HDTV, one digital transmitter can carry five or six channels at once.

Kaufhold also sees the broadcasting model as a suitable alternative to "overbuilders," companies that run cable into neighborhoods already served by an entrenched operator. With financial markets turning a cold shoulder to businesses that havent proven their ability to turn a profit, many overbuilders are running out of capital.

The European system does not require consumers to invest in expensive HDTV sets and is more lucrative for broadcasters and advertisers, Kaufhold said. "You cant charge people to watch HDTV," he said. "The approach in the U.S. was more driven by the technology, whereas in Europe, its driven by business."

ONdigital is on track to sign up 2 million subscribers by the end of 2002, said Stuart Prebble, the companys CEO. The company also sees its service aiding Prime Minister Tony Blairs goal of providing universal Internet access by 2005. "We are building an entirely new kind of media business," Prebble said.

A British customer of ONdigital might pay $15 per month for 30 or 40 channels, which might include premium movie and sports broadcasts such as HBO and British Sky Broadcasting, with the $125 set-top box thrown in for free.

A heated debate over digital TV in the U.S. has pitted cable operators against broadcasters, and TV manufacturers have fought with the Federal Communications Commission over requirements to add digital tuners in next-generation sets. Controversy has also arisen over TV stations plans to sell some of their free, unused spectrum to companies that plan to broadcast data to computers for later viewing on TV.

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