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  1. 1. HDTV and IPTV Development: John Yip Chief Engineer RTHK 2009.03.12 Hong Kong and selected cities
  2. 2. 1. Introduction (1) <ul><li>HDTV and IPTV are advancing in the Asian Pacific region </li></ul><ul><li>Viewers embrace the benefits of Digital TV and Triple-play eg improved picture quality and additional TV channels. </li></ul><ul><li>Hong Kong: enjoying a very healthy growth in both HDTV and IPTV. </li></ul><ul><li>For digital TV service providers, ROI (Return On Investment) is a primary concern. Growth is crucial: no growth => no ROI . </li></ul>
  3. 3. 1. Introduction (2) <ul><li>To look at the progress in Hong Kong, Shanghai, Singapore and Sydney. </li></ul><ul><li>To analyse the growth and the underlying factors, an Excel calculator is introduced, focussing on the soft factors, based on the RPMO methodology (re ABU digital broadcast symposiums: 2005, 2007, 2008). </li></ul><ul><li>RPMO calculator + Benchmarking curves have been developed, to assist service providers in evaluating critical growth factors and the areas where further efforts may be required. </li></ul>
  4. 4. 2. HDTV in Hong Kong <ul><li>DTT channels (simulcast) </li></ul><ul><li>on MFN </li></ul>HDTV + co-channel SD on SFN MPEG2 MPEG4 (H.264), MHEG5 (middleware) Dolby 5.1 <ul><li>TVB & ATV have been providing the digital TV transmission network services, since Dec. 31, 2007 . </li></ul><ul><li>Population coverage : 75% by early August 2008. </li></ul><ul><li>DTT/HDTV : 32% of TVH, by end Jan. 2009. </li></ul>
  5. 5. 2. HDTV/ DTT in HK <ul><li>Basic UHF TV configuration </li></ul>
  6. 6. 3. IPTV in Hong Kong <ul><li>IPTV provided by PCCW, CTI </li></ul><ul><li>Household broadband penetration rate </li></ul><ul><li>= 78% (end 2008) </li></ul><ul><li>Technologies : ADSL, ADSL2+, FTTH, with subscriber data-rates of 6 Mbps  100 Mbps. </li></ul><ul><li>Bundled prices : highly competitive. </li></ul><ul><li>Penetration (TVH) : 50% (after about 5 years), averaging a healthy 10% pa. </li></ul>
  7. 7. 4. Analytical Model (RPMO) (1) <ul><li>Generic growth equation for digital broadcast technology was introduced (in ABU DTV2007) </li></ul>Driving Force (DF) = Function (soft and hard factors) = M ( r , p , m , o ) * H ( G , g ) Driving Force Regulatory (r) Pricing (p) Marketing (m) Others (o) Macroeconomic (G) Geo-physical (g) (Technology is reflected in Pricing, Device Attributes and Quality.)
  8. 8. 4. Analytical Model (RPMO) (2) <ul><li>Soft Factors : more controllable. </li></ul><ul><li>Hard Factors : more critical in the initial start-up. </li></ul><ul><li>The soft-factor analytical model, RPMO model, covers R egulatory, P ricing, M arketing, O ther factors. </li></ul><ul><li>4.1 RPMO Calculator (Excel based) </li></ul><ul><li>7 data-entry boxes ie for R, P, M, O (4 sub-factors). For each box, user enters the major issues. </li></ul><ul><li>For each issue, user enters a weight (0/1/2/3) and a mark (5.0 – 0.0). Marks: for Excellent, Good, Fair, Poor, Bad, No-Go . </li></ul>
  9. 9. 4.1 RPMO Calculator (1)
  10. 10. 4.1 RPMO Calculator (2)
  11. 11. 4.1 RPMO Calculator (3)
  12. 12. 4.1 RPMO Calculator (4)
  13. 13. 4.1 RPMO Calculator (5) <ul><li>The time-span under consideration is important. Choose either the entire growth history (past years) or just the most recent year. </li></ul><ul><li>The major issues within one soft-factor are inter-related so an arithmetic mean is used. </li></ul><ul><li>R, P, M, O : relatively independent, hence a geometric mean is used. </li></ul>
  14. 14. 4.2 Major Issues, HDTV (1) <ul><li>High spectrum availability </li></ul><ul><li>Liberal spectrum licensing/ allocation </li></ul><ul><li>Liberal cross-platform content policy </li></ul><ul><li>Definitive timeframe for analog-off </li></ul><ul><li>High HD quota required of broadcasters </li></ul>Regulatory, R
  15. 15. 4.2 Major Issues, HDTV (2) <ul><li>Pricing of HDTV receiver and installation </li></ul>Pricing, P Marketing, M <ul><li>Strong viewer education </li></ul><ul><li>Strong promotion by the industry </li></ul>
  16. 16. 4.2 Major Issues, HDTV (3) <ul><li>Content: </li></ul><ul><li>Large volume of HD programming </li></ul><ul><li>Compelling HD content eg major events </li></ul><ul><li>Consumer Habits: </li></ul><ul><li>Strong TV viewing habit (based on h/ wk) </li></ul><ul><li>Identifiable major viewing preferences </li></ul>Other, O
  17. 17. 4.2 Major Issues, HDTV (4) <ul><li>Device Attributes: </li></ul><ul><li>High availability of iDTV, STB and LCD/ PDP </li></ul><ul><li>EPG and subtitling </li></ul><ul><li>Ease of use of HD receiving equipment </li></ul><ul><li>Interactivity and recording </li></ul><ul><li>Quality: </li></ul><ul><li>Comprehensive and strong signal coverage </li></ul><ul><li>Picture Quality (based on Mbps, MPEG2/ H.264) </li></ul>
  18. 18. 4.2 Major Issues, HDTV (5) <ul><li>Example : “ Good ” conditions for a mark of “ 4 ” are : </li></ul><ul><li>- Mostly-free cross-platform content-flow (eg between FTA and cable/satellite, no policy favouring the latter). </li></ul><ul><li>- Well-defined analog-off timetable. </li></ul><ul><li>- HD quota of 21 hours/ week or more. </li></ul><ul><li>- Initial HDTV consumer outlay (set + installation + subscription) at <= 2% of GDP/capita. </li></ul><ul><li>- Average TV viewing of >= 21 hours/ week. </li></ul><ul><li>- Strong signal coverage of 75% or better. </li></ul><ul><li>- HD at 15 Mbps or better, preferable on H.264. </li></ul>
  19. 19. 4.3 Major Issues, IPTV (1) <ul><li>Liberal IPTV licensing policy. </li></ul><ul><li>Free-market approach to triple-play. </li></ul><ul><li>Liberal cross-platform content policy. </li></ul><ul><li>Pricing of STB and installation. </li></ul><ul><li>Pricing of annual subscription. </li></ul><ul><li>Competitive package-bundling, triple-play. </li></ul><ul><li>Strong anti-piracy protection. </li></ul>Regulatory, R Pricing, P
  20. 20. 4.2 Major Issues, IPTV (2) <ul><li>Strong advertizing efforts by operators </li></ul><ul><li>Offering attractive promotional packages </li></ul><ul><li>Free channels offered to subscribers </li></ul><ul><li>Strong front-line promoting efforts </li></ul><ul><li>Content: </li></ul><ul><li>Large number of channels available </li></ul><ul><li>Wide range of content categories </li></ul><ul><li>Exclusive, compelling, premiere content </li></ul>Marketing, M Other, O
  21. 21. 4.2 Major Issues, IPTV (3) <ul><li>Consumer Habits: </li></ul><ul><li>Strong TV viewing habit (based on h/ week) </li></ul><ul><li>Identifiable major viewing preferences </li></ul><ul><li>Device Attributes: </li></ul><ul><li>Wide range of Set-Top Box features </li></ul><ul><li>EPG and subtitling ; Interactivity and recording </li></ul><ul><li>Ease of use of STB </li></ul><ul><li>Quality: </li></ul><ul><li>Reliability of network service, STB, etc. </li></ul><ul><li>Picture Quality (based on Mbps and on MPEG2 or 4) </li></ul><ul><li>Broadband speed (Mbps) for triple-play </li></ul>
  22. 22. 4.2 Major Issues, IPTV (5) <ul><li>Example : “ Good ” conditions, f or a mark of “ 4 ” are : </li></ul><ul><li>- Mostly-free cross-platform content-flow (eg between IPTV and cable/ FTA and no policy favouring the latter eg exclusivity). </li></ul><ul><li>- IPTV pricing pa at less than 1% of GDP/capita. </li></ul><ul><li>- >= 100 TV channels available. </li></ul><ul><li>- Average TV viewing of >= 21 hours/ week. </li></ul><ul><li>- Triple-play broadband speed at >= 10 Mbps. </li></ul>
  23. 23. 4.3 Externalities (1) <ul><li>Influencing factors external to the RPMO model. </li></ul><ul><li>Hard factors can be externalities. </li></ul><ul><li>Impact of the Olympics 2008 is included in the analyses as the content has been watched world-wide. </li></ul><ul><li>HDTV in Hong Kong </li></ul><ul><li>Pre-existence of an estimated 0.4 M large LCD/ Plasma TV displays. </li></ul><ul><li>This externality to be discounted in the RPMO analytical model. </li></ul>
  24. 24. 4.3 Externalities (2) <ul><li>IPTV in Hong Kong </li></ul><ul><li>Strong anti-piracy protection is reflected as a low/ zero leakage of revenue. </li></ul><ul><li>GDP/ sq. km is one of the highest in the world due to high GDP/capita and high population density. The high population density allows a fast rollout of IPTV. </li></ul>
  25. 25. 5. RPMO Analyses :HK, SH, SIN & SYD (1)
  26. 26. <ul><li>RPMO Analyses: HK, SH, SIN & SYD (2) </li></ul>Fig. 1: Benchmarking curves for HDTV and IPTV, based on RPMO analyses
  27. 27. <ul><li>RPMO Analyses: HK, SH, SIN & SYD (3) </li></ul><ul><li>Major improvement areas identified: </li></ul><ul><li>HDTV </li></ul><ul><li>Affordable HDTV-set prices (prices are falling). </li></ul><ul><li>Compelling HD content eg major events. </li></ul><ul><li>Liberal cross-platform content-flow policies . </li></ul><ul><li>Strong promotion and marketing. </li></ul><ul><li>IPTV </li></ul><ul><li>Liberal cross-platform content-flow policies . </li></ul><ul><li>Exclusive, compelling, premiere content . </li></ul><ul><li>Large number and range of channels . </li></ul><ul><li>High broadband speeds and reliability. </li></ul>
  28. 28. 6. ITU-ABU Workshop in Laos (1) <ul><li>Workshop on digital services implementation, Dec. 2008, Vientiane, Laos. </li></ul><ul><li>Preliminary results were produced by the participants; RPMO values for Digital Radio, DTT and Digital Cable TV ranged from 3.2 to 3.9 . </li></ul><ul><li>For DTT (ie SD) and Digital Radio, a simplified growth equation is postulated, by factoring GDP/capita into the P (pricing) factor, ie consumer outlay being considered as % of GDP/ capita. </li></ul>
  29. 29. 6. ITU-ABU Workshop in Laos (2) <ul><li>Driving Force (DTT / Digital Radio) : </li></ul>DF = R*P( GDP/capita )*M*O <ul><li>What the consumer may pay for a DTT or DAB/ DRM receiver may be assessed, by using a benchmark price from an economy well-advanced in the concerned technology eg DAB. </li></ul>
  30. 30. 6. ITU-ABU Workshop in Laos (3) <ul><li>= Price B *(ratio of GDP/capita)*(ratio of consumption, h/week) </li></ul>Price A <ul><li>where consumption = TV viewing (for DTT), or radio listening (for Digital Radio). </li></ul><ul><li>Pricing equation is subject to the consumer’s consideration of Opportunity Cost and possibly to the micro-economic Principle of Utility Maximization </li></ul>For Economy under consideration Benchmark economy
  31. 31. 6. ITU-ABU Workshop in Laos (4 ) <ul><li>Principle of Utility Maximization : </li></ul><ul><li>MU1/ P1 = MU2/ P2 = MU3/ P3 , etc. </li></ul><ul><li>where MUi and Pi are the marginal utility and price of good i (eg a DTT STB or DAB receiver) respectively. </li></ul>
  32. 32. 7. Summary <ul><li>HDTV and IPTV are changing the TV-viewing landscape in the Asian-Pacific region. </li></ul><ul><li>Broadcasters/ telcos are vitally concerned about Growth following a rollout, as ROI depends firstly on market penetration. </li></ul><ul><li>The application of the RPMO model is exemplified by analysing HDTV and IPTV in Hong Kong, Shanghai, Singapore and Sydney. </li></ul><ul><li>The Excel-based RPMO calculator is freely available, to facilitate analyses of digital TV development. </li></ul>
  33. 33. Our Target: GROWTH but .. G et R ich O nly-if W e T ry H ard. (Use slide show and  to animate.) IPTV Development HDTV Development Digital TV Development Mobile TV Development Searchable on Google, etc.

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