Digital Television's December Descent

Back to Contents of Issue: December 2003

Terrestrial broadcasts of super-sharp television begin now -- and the Japanese government wants all of us to tune in

by Geoff Botting

THIS MONTH MARKS THE start of a government-orchestrated plan that in a few years' time will change the way we all watch TV. Japan's first-ever regular broadcasts of terrestrial digital TV (DTV) get under way in limited areas of Japan starting December 1, and that's only the first step of a sweeping plan.

The coverage is now limited to certain parts within regions surrounding Tokyo, Osaka and Nagoya. But in 2006 it will expand to other areas in the country. By the final stage in 2011, all households will be able to tune into terrestrial DTV, according to the plan.

In July of that year, the nation's broadcasters are to shut down all analog broadcasting, as required by law. Every TV viewer in the land will be expected to have made the switch to digital either by buying new digital TV sets or installing set-up boxes that plug into their analog sets. In short, the project's goal is to put about 100 million digitally compliant TV receivers into 48 million households.

But will it all go smoothly?

For TV set manufacturers and government regulators, that was the nagging question this past summer when NHK, the national broadcaster, released figures on the fledgling broadcast satellite (BS) digital TV industry. The numbers showed that a mere 4.32 million households had bought TV sets and tuners that allow them to view the digital signals from space.

When the signals were first beamed down in December 2000, the then minister of posts and telecommunications declared a target number of 10 million BS digital tuners by the middle of this year. Three years later, the actual number is less than half that.

It's not just the government whose expectations have turned out to be highly inflated. In late 2001, the Japan Electronics and Information Technology Industries Association (JEITA) predicted that BS digital tuners and TV sets would number 8.6 million in Japan by now. What's more, the five stations that air BS digital TV have been in the red, with accumulated losses totaling more than JPY70 billion, Kyodo News reported in September.

So it's clear that Japanese consumers, against early expectations, have yet to embrace the new and expensive TV technology. A recent visit to a large store of the Bic Camera chain revealed only one terrestrial digital tuner for sale, priced at around JPY70,000.

"The images seem really beautiful, but the TVs are really expensive, something like JPY200,000 or JPY300,000 yen. I really don't want to spend that much money to watch TV," says Mayumi Chiba, 40, a copywriter who lives in Tokyo and describes herself as a regular TV watcher.

But at least Chiba knows about terrestrial DTV. Of the half dozen other consumers interviewed, none were aware of the existence of the plan to switch over to DTV. Several confused the broadcasts with satellite broadcasts, and none expressed a clear interest.

The history of Hi-Vision, Japan's version of high-definition TV (HDTV), may also present a foreboding case to backers of terrestrial DTV. After a massive amount of investment and lengthy development, Hi-Vision was rolled out in 1991, with trial broadcasts followed quickly by regular programing. Yet despite the occasional spikes in sales generated from big sporting events, such as the 1992 Barcelona Olympics, sales of Hi-Vision receivers were a fraction of what its backers had hoped for.

Yet as the government sees it, a total switch over to DTV in the near future will be essential if TV technology is to remain relevant in the digital age. The new format could be a springboard for bringing more IT services to more households throughout the country.

"When terrestrial TV goes digital, it will be able to work together with the Internet to offer various IT applications, including e-government, e-municipal government and e-commerce," says Ichiro Kawamura, an official of the Information and Communications Policy Bureau at the Ministry of Public Management, Home Affairs, Posts and Telecommunications.

His ministry has been given the job of overseeing the conversion plan, the latest version of which is formally titled, "[The] Third Action Plan for the Promotion of Digital Broadcasting." The plan lays out a schedule for DTV saturation. The terrestrial signals that begin in December reach 12 million households in the three selected regions. By the end of next year, the number should rise to 17 million, then 23 million by 2005.

But why are the government and related tech industries so eager to junk analog TV in favor of DTV?

The answer lies in the efficiency of the airwaves. In the same slice of the radio spectrum that it takes to send one analog broadcast, a DTV broadcaster can send several simultaneously, including those featuring super-sharp HDTV.

Also possible are interactive services and data transmission, neither of which can be accomplished easily with analog. What's more, DTV will free up the airwaves to allow the transmission of a full range of public-service information, such as earthquake emergency warnings and signals used by mobile devices.

The plan's backers like to point to Japan's vulnerability to natural disasters, as well as the proliferation of wireless technologies among consumers. "Radio frequencies are a resource, but they are extremely limited," Kawamura says. "We are trying to raise the efficiency of their use as fast as possible." He adds that every single analog signal must eventually stop for the sake of efficiency -- a priority in Japan, where airwaves are particularly congested. "These frequencies are being used all over the place. You have mobile phones, TV and radio broadcasts. Additionally, there are emergency communications and satellites. But if you have analog and digital together, it's not a very efficient arrangement. So it's necessary that we stop the analog signals to get the most use out of the airwaves."

The government and industry reckon that such efficiency will eventually reap huge economic spinoffs. A document from the Information and Communications Policy Bureau cites a "positive economic effect" of JPY40 billion over the next decade from the sales of terrestrial DTV receiving equipment and the conversion of broadcasting facilities alone. And back in 1998, a ministry advisory panel predicted that a ripple effect on all related industries would swell to around JPY212 trillion.

Even so, the ministry's plan for the entire nation to go fully digital by 2011 has a slew of very prominent critics.

The October issue of Galac, a journal that covers broadcasting issues, devoted 29 pages to a special section titled "The Fall of Terrestrial Digital," which harshly condemns the government's conversion plan. The contributors are some of Japan's best known politicians and commentators, including House of Representatives member Takuya Hirai, Nagano Prefecture Governor Yasuo Tanaka and journalist Soichiro Harada. The main article was by commentator Mamoru Sakamoto, who set forth "10 definitive reasons" why the plan to go digital is doomed to failure.

Sakamoto told J@pan Inc: "I just don't think the plan in its current form will work." His major complaint is that the plan's numbers on the diffusion of TV receivers simply don't add up. "In a year, about 10 million TV sets are shipped in Japan, and there are at least 100 million TV sets in the country," he says. "The period from December 2003 to the 2011 deadline is less than eight years. But in an eight year period, only about 80 million sets can be produced. So there won't be enough digitally compliant TVs available. There simply isn't time to produce them all."

Ministry officials, however, say they have been in regular contact with TV set manufacturers, advising them to be fully prepared. The officials also expect that high-profile sporting events taking place between now and 2011 will help boost TV set sales. By the time the 2006 World Cup rolls around, for instance, 10 million households will be equipped with 12 million devices capable of receiving terrestrial digital broadcasts, according to a projection this year by the "Working Group for Deliberations on Diffusion," part of a ministry advisory panel. The Beijing Olympics in 2008 should help propel the number of devices to 36 million, it says.

Relying on international sporting events to help sell TV receivers is an old strategy in Japan, dating back to the Tokyo Olympics in 1964. Sales of TV sets soared in the leadup to the games, including the then-rare and exorbitantly priced color TV sets. NHK continued the strategy when promoting Hi-Vision, which, as it turned out, failed spectacularly to catch on among consumers during the past decade.

Critics question whether this time around -- amid a lingering recession that has cut household spending and a less impressionable public -- the strategy will work. Will significant numbers of TV viewers be willing to throw away their analog sets and spend hundreds of thousands of yen just to watch a soccer tournament in high resolution and surround sound?

Sakamoto says no. He believes large numbers of Japanese are content with their analog receivers and will remain so in the years ahead. Hi-tech digital sets may be in demand among hardcore fans of movies, sports, music and even nature documentaries, he says. But there is still a significant number of viewers who don't need or cannot afford such extravagance. "It's like having a Mercedes Benz," Sakamoto says. "It's a great car. It's well-built, safe and fast; the best. But only a limited number of people can have one, so they settle for a Corolla.

"With lots of regular people, like the elderly living in the countryside, children, youths and housewives, they don't really need the kind of high-quality images [digital] TVs produce." He points out that a typical family household has three TVs: a big set in the living room, plus a couple of small cheap sets for the kids and kitchen. "So a lot of viewers don't really want all their TVs to be large. For the kitchen, for example, a small TV is ideal."

Nevertheless, by the time 2011 approaches, all TV viewers will be required to have made their TV equipment digitally compliant. Sakamoto sees the situation as creating a lot of angry consumers. "Right now you get a small TV for as cheap as JPY10,000. But people with those will then have to be forced to get tuners costing JPY50,000 or more. They're going to hate doing that."

The homes affairs ministry's Kawamura dismisses that scenario, arguing that the future market for terrestrial DTV sets will be very different from the more exclusive market for satellite digital sets. "The sets being sold right now are all BS and CS (communications satellite) as well as terrestrial digital. They all have big screens of 30 inches and more. Even the cathode ray tube type costs about JPY300,000 with other sets going up to JPY600,000 and JPY700,000. But we're only talking about the most expensive ones," he says. "When more and more digital TVs come onto the market, many will be of the type that just handles the terrestrial [digital] broadcasts plus ones having small screens. That will bring down prices.

"Right now digital TVs number only in the thousands, but once they get into the tens and hundreds of thousands, they'll get cheaper."

For the broadcasters as well, the switch to DTV means whopping startup costs. All stations, regardless of size, will be required to have installed new antennae, transmitters and production equipment. The cost of making those changes is estimated to be around JPY800 billion throughout the industry, according to a preliminary projection by broadcasting companies.

The government recognizes the huge financial burden. In 1999, it passed a law to provide some relief, giving private TV stations preferential loans and tax breaks to get their terrestrial DTV services off the ground, so to speak.

In September, Toranosuke Katayama, then home affairs minister, called for greater financial support and suggested the ministry may amend the law to provide more direct and lasting help to broadcasters.

Perhaps the help will be appreciated most by the cable TV (CATV) providers. Due to the relatively small scale of their operations, the cost of conversion is hitting them particularly hard.

CATV companies in Japan have long been tiny and fragmented. That's because early regulations restricted the companies to owning only one operator and operating only in their local areas. Those regulations were eased, however, in 1993.

Since then, there has been a degree of consolidation within the industry. Japan's biggest CATV provider, for example, is Jupiter Telecommuni-cations Co., created out of a 2000 merger between the two biggest CATV companies at the time. Jupiter operates J-Com Broadband, which claims to have around 1.5 million TV subscribers in four regions: Kanto, Kansai, Sapporo and Kyushu.

J-Com plans to begin offering its customers DTV starting early next year, although in limited areas. The digital broadcasts would be simulcast with the analog ones, and J-Com promises to get the DTV signals into more subscribers' households as quickly as technically possible.

Not that large numbers of subscribers seem all that concerned. So far, consumers have shown little inclination toward DTV in all of its forms. Typically, they are either uninterested or simply confused over the future course that television technology is starting to take.

And who can blame them? Until now, acquiring a TV set has been a rather simple task, and one usually not requiring a lot of money.

But a trip to an electronics retailer nowadays reveals a bewildering choice of TV receivers, some with plasma screens, others with liquid crystal display (LCD) screens, some with varying aspect ratios (a screen's width to height). Some units are equipped with digital tuners, others with analog. Some require the delicate job of setting up a satellite at home.

And while the prices of analog TVs have dropped sharply in the last decade -- mostly due to Japanese manufacturers shifting the bulk of their production to China -- the cost of acquiring a digital TV remains astronomical. Many models now on the market retail for over JPY1 million, and the lowest-priced sets cost well over JPY100,000.

It's going to take a lot of deft planning by the authorities -- and considerable active cooperation from manu- facturers and broadcasters -- to excite and motivate Japan's TV viewers about DTV. Stay tuned. @

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