HDTV and IPTV Development:

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HDTV and IPTV Development
Hong Kong and selected cities

• John Yip
• Chief Engineer
• RTHK
• 2009.03.12

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1. Introduction (1)

• HDTV and IPTV are advancing in the Asian Pacific
  region
• Viewers embrace the benefits of Digital TV and
  Triple-play eg improved picture quality and
  additional TV channels.
• Hong Kong enjoying a very healthy growth in both
  HDTV and IPTV.
• For digital TV service providers, ROI (Return On
  Investment) is a primary concern. Growth is
  crucial no growth gt no ROI.

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1. Introduction (2)

• To look at the progress in Hong Kong, Shanghai,
  Singapore and Sydney.
• 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).
• 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.

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2. HDTV in Hong Kong
MPEG2

• DTT channels (simulcast)
• on MFN

MPEG4 (H.264), MHEG5 (middleware) Dolby 5.1
HDTV co-channel SD on SFN

• TVB ATV have been providing the digital TV
  transmission network services, since Dec. 31,
  2007.
• Population coverage 75 by early August 2008.
• DTT/HDTV 32 of TVH, by end Jan. 2009.

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2. HDTV/ DTT in HK

• Basic UHF TV configuration

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3. IPTV in Hong Kong

• IPTV provided by PCCW, CTI
• Household broadband penetration rate
• 78 (end 2008)
• Technologies ADSL, ADSL2, FTTH, with
  subscriber data-rates of 6 Mbps ?100 Mbps.
• Bundled prices highly competitive.
• Penetration (TVH) 50 (after about 5 years),
  averaging a healthy 10 pa.

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4. Analytical Model (RPMO) (1)

• Generic growth equation for digital broadcast
  technology was introduced (in ABU DTV2007)

Driving Force (DF) Function (soft and
hard factors) M (r, p, m, o) H (G, g)
Regulatory (r) Pricing (p) Marketing (m) Others
(o)
Macroeconomic (G) Geo-physical (g)
Driving Force
(Technology is reflected in Pricing, Device
Attributes and Quality.)
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4. Analytical Model (RPMO) (2)

• Soft Factors more controllable.
• Hard Factors more critical in the initial
  start-up.
• The soft-factor analytical model, RPMO model,
  covers Regulatory, Pricing, Marketing, Other
  factors.

• 4.1 RPMO Calculator (Excel based)
• 7 data-entry boxes ie for R, P, M, O (4
  sub-factors). For each box, user enters the
  major issues.
• 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.

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4.1 RPMO Calculator (1)
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4.1 RPMO Calculator (2)
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4.1 RPMO Calculator (3)
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4.1 RPMO Calculator (4)
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4.1 RPMO Calculator (5)

• The time-span under consideration is important.
  Choose either the entire growth history (past
  years) or just the most recent year.
• The major issues within one soft-factor are
  inter-related so an arithmetic mean is used.
• R, P, M, O relatively independent, hence a
  geometric mean is used.

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4.2 Major Issues, HDTV (1)
Regulatory, R

• High spectrum availability
• Liberal spectrum licensing/ allocation
• Liberal cross-platform content policy
• Definitive timeframe for analog-off
• High HD quota required of broadcasters

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4.2 Major Issues, HDTV (2)
Pricing, P

• Pricing of HDTV receiver and installation

Marketing, M

• Strong viewer education
• Strong promotion by the industry

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4.2 Major Issues, HDTV (3)
Other, O

• Content
• Large volume of HD programming
• Compelling HD content eg major events
• Consumer Habits
• Strong TV viewing habit (based on h/ wk)
• Identifiable major viewing preferences

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4.2 Major Issues, HDTV (4)

• Device Attributes
• High availability of iDTV, STB and LCD/ PDP
• EPG and subtitling
• Ease of use of HD receiving equipment
• Interactivity and recording
• Quality
• Comprehensive and strong signal coverage
• Picture Quality (based on Mbps, MPEG2/ H.264)

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4.2 Major Issues, HDTV (5)

• Example Good conditions for a mark of 4 are
  
• - Mostly-free cross-platform content-flow (eg
  between FTA and cable/satellite, no policy
  favouring the latter).
• - Well-defined analog-off timetable.
• - HD quota of 21 hours/ week or more.
• - Initial HDTV consumer outlay (set
  installation subscription) at lt 2 of
  GDP/capita.
• - Average TV viewing of gt 21 hours/ week.
• - Strong signal coverage of 75 or better.
• - HD at 15 Mbps or better, preferable on H.264.

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4.3 Major Issues, IPTV (1)
Regulatory, R

• Liberal IPTV licensing policy.
• Free-market approach to triple-play.
• Liberal cross-platform content policy.

Pricing, P

• Pricing of STB and installation.
• Pricing of annual subscription.
• Competitive package-bundling, triple-play.
• Strong anti-piracy protection.

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4.2 Major Issues, IPTV (2)
Marketing, M

• Strong advertizing efforts by operators
• Offering attractive promotional packages
• Free channels offered to subscribers
• Strong front-line promoting efforts

Other, O

• Content
• Large number of channels available
• Wide range of content categories
• Exclusive, compelling, premiere content

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4.2 Major Issues, IPTV (3)

• Consumer Habits
• Strong TV viewing habit (based on h/ week)
• Identifiable major viewing preferences
• Device Attributes
• Wide range of Set-Top Box features
• EPG and subtitling Interactivity and recording
• Ease of use of STB
• Quality
• Reliability of network service, STB, etc.
• Picture Quality (based on Mbps and on MPEG2 or 4)
• Broadband speed (Mbps) for triple-play

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4.2 Major Issues, IPTV (5)

• Example Good conditions, for a mark of 4
  are
• - Mostly-free cross-platform content-flow (eg
  between IPTV and cable/ FTA and no policy
  favouring the latter eg exclusivity).
• - IPTV pricing pa at less than 1 of GDP/capita.
  
• - gt 100 TV channels available.
• - Average TV viewing of gt 21 hours/ week.
• - Triple-play broadband speed at gt 10 Mbps.

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4.3 Externalities (1)

• Influencing factors external to the RPMO model.
• Hard factors can be externalities.
• Impact of the Olympics 2008 is included in the
  analyses as the content has been watched
  world-wide.
• HDTV in Hong Kong
• Pre-existence of an estimated 0.4 M large LCD/
  Plasma TV displays.
• This externality to be discounted in the RPMO
  analytical model.

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4.3 Externalities (2)

• IPTV in Hong Kong
• Strong anti-piracy protection is reflected as a
  low/ zero leakage of revenue.
• 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.

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5. RPMO Analyses HK, SH, SIN SYD (1)
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RPMO Analyses HK, SH, SIN SYD (2)
Fig. 1 Benchmarking curves for HDTV and IPTV,
based on RPMO analyses
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RPMO Analyses HK, SH, SIN SYD (3)

• Major improvement areas identified
• HDTV
• Affordable HDTV-set prices (prices are falling).
• Compelling HD content eg major events.
• Liberal cross-platform content-flow policies.
• Strong promotion and marketing.
• IPTV
• Liberal cross-platform content-flow policies.
• Exclusive, compelling, premiere content.
• Large number and range of channels.
• High broadband speeds and reliability.

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6. ITU-ABU Workshop in Laos (1)

• Workshop on digital services implementation, Dec.
  2008, Vientiane, Laos.
• Preliminary results were produced by the
  participants RPMO values for Digital Radio, DTT
  and Digital Cable TV ranged from 3.2 to 3.9.
• 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.

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6. ITU-ABU Workshop in Laos (2)

• Driving Force (DTT / Digital Radio)

DF RP(GDP/capita)MO

• 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.

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6. ITU-ABU Workshop in Laos (3)
For Economy under consideration
Price A

• Price B (ratio of GDP/capita)(ratio of
  consumption, h/week)

Benchmark economy

• where consumption TV viewing (for DTT), or
  radio listening (for Digital Radio).
• Pricing equation is subject to the consumers
  consideration of Opportunity Cost and possibly to
  the micro-economic Principle of Utility
  Maximization

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6. ITU-ABU Workshop in Laos (4)

• Principle of Utility Maximization
• MU1/ P1 MU2/ P2 MU3/ P3, etc.
• where MUi and Pi are the marginal utility and
  price of good i (eg a DTT STB or DAB receiver)
  respectively.

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7. Summary

• HDTV and IPTV are changing the TV-viewing
  landscape in the Asian-Pacific region.
• Broadcasters/ telcos are vitally concerned about
  Growth following a rollout, as ROI depends
  firstly on market penetration.
• The application of the RPMO model is exemplified
  by analysing HDTV and IPTV in Hong Kong,
  Shanghai, Singapore and Sydney.
• The Excel-based RPMO calculator is freely
  available, to facilitate analyses of digital TV
  development.

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Our Target GROWTH but .. Get
Rich Only-if
We
Try Hard.
IPTV Development HDTV Development Digital TV
Development Mobile TV Development Searchable on
Google, etc.
(Use slide show and ? to animate.)