NAB 2001

Las Vegas

9:00AM - 10:30AM

NAB President and CEO Eddie Fritts will again deliver the "State of the Industry" address to NAB2001 attendees on key policy issues facing radio and television broadcasters in the 21st century.

Eddie Fritts: Three unrelated issues appeared recently in the news:

1. The oldest, most distant supernovas were discovered by astronomers
2. The Russian president changed the lyrics in their national anthem from ‘an unbreakable union of republics’ to ‘a holy nation protected by god’
3. eToys stock price dropped from $86 to $.09 per share

Change is wrenching; broadcasting’s universe is changing; we have the added challenge of division within our ranks over a key issue. We’re challenging ourselves from within. I’m referring to the split between affiliates and networks. The Russians used to sing about ‘an unbreakable union of republics.’ Broadband, internet, other factors have created a period of transition in the broadcast industry. We all know we’re going digital. We have a Marketplace vs. a Governmental timeline (deadline). If we follow the govt. timeline, there needs to be minimal govt. intervention in how the industry makes this transition. You can go to the store today and buy a HDTV set, but when you get it home and plug it in, you’re going to be disappointed because of the lack of HD signals to receive.

I propose three things that must occur:

1. Cable gatekeepers must carry local broadcast programming,
2. TV manufacturers need to include DTV tuners in every set they make, and
3. Issue of DTV and cable interoperability must be solved.

Rep. John Dingle has said that challenges of the transition to DTV may be too great to handle. Broadcasters continue to be committed to the DTV transition. Radio faces its own digital challenges. iBiquity (IBOC) digital radio appears to be the winner there. LPFM legislation just passed is being challenged in Congress. Campaign finance reform isn’t working. The legislators have voted themselves the cheapest possible rates for advertising. Broadcasters provide a public good -- $8 billion in PSA’s. The network approach has been attacked as the weakness in the industry. But I believe it’s our greatest strength. Everything is still in place to continue our record of success. We know who we are, and where we are going. We are going forward and upward, together.

Cathy Hughes: Yesterday was my birthday, and I thank God and Eddie Fritz and the NAB board for making this the best and the biggest birthday celebration any kid could ever have. I thank Alfred Liggins, my son, and my entire board. Although I’m honored to receive this award, it’s the staff and our 18 million listeners that deserve the credit. This award, and the award to Nancy, sends a critical and most important message that women and minorities are important to this industry. When WOL AM, a 1000 watt tiny radio station in D.C. went on the air, I needed 1.5 million dollars, but I was just 1.5 million short. A woman Puerto Rican loan officer made me the loan. I thank God for carrying me on golden wings. To whom much is given, much is expected. We can’t forget that mentoring and community service is our charge.

Jack Valenti – What I’ve learned in my long and checkered career in Hollywood:

1. Predicting anything is akin to tracings on dry leaves in the wind. "In Hollywood, nobody knows anything." "A stock market prophet is a fellow who can sit on a fence and keep both ears to the ground." The computer is the smartest piece of technology ever devised, but it cannot predict human behavior. What, then, can any of us rely on? Your instinct, judgement, intuition. When I was assisting Pres. Johnson, he never had all the information available upon which to base a final decision. He called upon his ‘little elf’ (his instinct), to chart his course – make his decisions.
2. 45 simple words: bound together in spare, undispensible prose – The First Amendment. Of all the clauses in the Constitution, this is the one clause that guarantees all other articles of the Constitution and the freedoms we enjoy. In my world, where ambiguity infuses everything, this is the one thing that is not ambiguous. It’s not easy being a First Amendment advocate. Often you become so irate at what is pervading our communities, but beware, be cautious, for throughout history, whenever a tyrant appears, he always comes first as your protector. We have embarked upon what is called "The Millennium of Communication." We are bombarded with a felicity of information. It’s an invasion unlike anything we’ve ever known or read about. It’s bound to produce the tawdry and unappealing. What’s it doing to our children? But there are only 3 citadels that build within children a shield from these: home (parents), church (clerics), school (teachers).
3. On Political Correctness: You’d expect that institutions of higher learning would be defenders of freedom of speech. But the college administrators sit idly by as freedoms are stripped away. Look at the story of the small island of Milos in the Mediterranean, invaded and plundered by the Greeks. The Greeks said there’s no justice without equality of power on both sides.

I have but one objective: to fortify the right of artists to create whatever they choose to create. I want to stand with all other Americans, who believe it is their solemn duty to preserve, protect and defend those 45 simple words – The First Amendment – the rostrum from which springs all of our freedoms.

Universal Peer-to-Peer

Where are we going? Back from the future: from Bodycasting to Universal Peer-to-Peer. Arthur C. Clark talks about bodycasting. Currently, the language is ‘peer-to-peer.’ When the music industry realized that a kid could write a piece of software that could allow peer-to-peer transfer of songs, nothing was really different from a technological point of view. Napster is just text files with links sent around the world over the web. So this wasn’t really a technology advance, it was just a fresh approach to the application of existing technology. Yet this simple new approach has turned the entire record industry upside down.

1. Ubiquitous networks (peer-to-peer broadcasting, not going thru a server):

• consider DoCoMo in Japan: Selling 1 million units / month
• China: 100 million mobile phones by December 2001, 200 million next year
• NTT East 10 March 2001: 36 megabit wireless antennas made by Shibuya.

1. Ubiquitous storage:

• Sony PlayStation 2: 10 million by 1 May 2001 with an 80 gigabyte disk
• 10 mil units x 80gb disk = 800,000 Terabytes of on-line storage by 1 May 2001, or…
• 8,000,000 Terabits = 8,000 Petabits = 8 Exabits… = .000 000 8 Yottabits This means that: In a week from now we have Napster for movies, where movies can be shared peer-to-peer across the network with all this storage available.

1. community process
2. community pipe: the output of that guy is the input to this guy
3. community grouping: clusters of entities, by common or shared interests
4. community security: trust relationships defined by you
5. peer monitoring and control: mechanisms to control how and what is shared

This is how we will do the bodycasting we talked about last year at NAB.

Language is as important as economics and technology: changing the language, the metaphor that describes the object, the house, the city, the computer – changes minds, changes attitudes, changes human behavior.

Clarke’s Laws: from "Profiles of the Future" - Arthur C. Clarke

• First Law: When a distinguished, but elderly scientist says that something is possible, he is almost certainly right. When he says it is impossible, he is very probably wrong.
• Second Law: The only way of finding limits of the possible is going beyond into the impossible.
• Third Law: Any sufficiently advanced technology is indistinguishable from magic.
• Fourth Law: Reading software manuals without the hardware is as frustrating as reading sex manuals without the software.

"Why should we bother with posterity – what has it ever done for us?"

Terabyte storage in proteins the size of a sugar cube. Micro cameras. And it’ll all be free (or trivially cheap).

BodyCasts! You won’t listen to John Warnock – you’ll be John Warnock: his feelings, thoughts, views, senses. President’s breakfast (William Kennard, President of the United States). Being Bill… how 300 million Americans share our President’s life, and share their lives with each other – the impact of 30 million distributed cameras on our lives: who’s in charge? [anarchist, right?}

Predictive technology: we predict the speeches, based on past performance and current events… see the speeches before they’re made… and after, see if the speakers could be unpredictable…

Bandwidth costs nothing, source devices are beyond our imagination, they’re in our clothing, in our bodies.

A spectrum from documentary to be-there-now, from recreation to being, from Jacques Costeau to Eyes of the Sea – where is my whale? How does she sing? Can I feel what she feels? (using the military’s submarine listening technology). Technology brings empathy. From the Olympics 500 BC to Olympics 2012 Be the athlete… From Mozambique satellite feed, or satellite picture, to 6 billion feeds, from worldwide distributed sources.

The challenge is design:

• design of the immediate immersive environment – any place there’s electricity, there’ll be intelligence
• design of sensory recreation
• design of office, car, home, personal space – now there’s too much time spent in anonymous environments – immersive environments will turn these into productive time spent.
• design of school, of learning space

How the internet changes technology and business:

2001 NAB Broadcast Engineering Conference

The 55th NAB Broadcast Engineering Conference will be held April 21 - April 26, 2001, in conjunction with NAB2001 in Las Vegas, Nevada. The Broadcast Engineering Conference is co-produced with the Society of Broadcast Engineers. This conference is a world-class engineering event addressing the most recent developments in broadcast technology and focusing on the implementation challenges that face broadcast professionals.

Peter Symes, SMPTE exec, works for Grass Valley Group. 7^th volume of SMPTE standards just released on CD-ROM (I snagged one from the lit table, they sell for $300). Richard Mizer ‘sent dinosaurs over phone lines’ for Spielberg’s work.

SMPTE founded in 1916. Military insisted that standards be adopted, as they wanted to use films to train troops for WW1. ‘T’ was added later to SMPTE. Promotes seamless integration and inter-working of various disparate pieces of equipment. Brief history of compression:

• DTLS IBM sampled 8-bits per sample, didn’t compress, but sent data over pots lines
• Late 80s, Bellcore undertook the first trial of compressed digital video.
• Comparing codecs
• Motion-JPEG was the first algorithm. ISO estab. in 1947.
• Mpeg-1 1988 to 1991
• Mpeg-2 in 1991
• Mpeg-3 abandoned because it could be supported in mpeg layer 2
• Mpeg-7 and mpeg-21 will also be discussed.
• Today’s SMPTE directive is to move engineers from mpeg-2 to mpeg-4

Mpeg-1 CD-I VOD trials 1992

Mpeg-2 + TV, HDTV 1993

Mpeg-4 started as ‘very low bitrate audiovisual coding’

1994 goal changed to coding of audiovisual objects

coding work is now ready: some extensions in systems

Convergence is a hype. There will not be a single network or terminal. Rather, we will see a proliferation of multimedia svcs. over different access networks, terminals. Therefore, we need a common multimedia technology that supports the three main service paradigms: interactive, broadcast, conversational.

Allowing more and different interactivity, not just stop/play/slow, but interactivity involving elements within the ‘scene’

Integrating natural and synthetic content

Covering a wide range of access conditions

• An object based multimedia content representation standard
• Many innovations come from systems layer
• Coders are pretty good, too
• DRM: digital rights mgmt. It’s got Intellectual Property Mgmt and Protection ‘IPMP’ hooks deeply built into it

Composition is done at the decoder, allowing inserting of local ads, etc.

• Video from 10 to 1m Kbits/s: multiple rectangular or arbitrary shape objects in the scene; scalable – interlaced and progressive
• ‘Sprites’ e.g. backgrounds: send once, warp after Matsuhshita chip for mobile devices uses such functionality
• Computer-generated visual information: face and body animation, animated 2-D meshes with moving texture, synchronized graphics and animated text

Audio Media Objects, will be covered by Schuyler (see Rob’s slides)

Systems to be discussed by Dave (see Dave’s slides)

• Mobile devices: requires low data-rates, error resilience, some scalability
• Streaming services: require scalability, low to medium data-rates, interactivity, IPMP
• Broadcast (later?): starting w/’individual’ bandwidth, but not too much later, mpeg-4 over mpeg-2 mp4 will not replace mp2, because of the existing investment in mp2. Instead, mp4 will leverage the investments in mp2

• Mpeg-4’s conformance points are "profiles @ levels," a bit like mpeg-2
• Profiles determine tool set: e.g. B frames, ¼ PEL Motion Compensation
• Levels limit complexity: e.g. MBs/sec, max # objects, complexity units (audio)
• Profiles will be convergence point for Industry Standards built on mpeg-4 – they will be the vehicle for market decisions and uptake

• Visual: natural, synthetic, natural + synthetic
• Audio: " " "
• Graphics
• Scene Description (Scene Graph)
• MPEG-J (main and personal) J stands for Java
• Object Descriptor (synch and buffers)
• MPEG does not prescribe how to combine these

MPEG-4 technology providers: philips, ibm, microsoft, fraunhoffer, intertrues, enviro, etc.

• seeks to address issues that ISO cannot do,
• bootstrapping licensing pools (studying alternative licensing schemes),
• Interoperability testing,
• Marketing (trade shows, tutorials, papers) ,
• Logos for conformant products

Slide 4: unique aspect of mp4 is to compose into compound objects at the terminal (decoder).

Slide 6: new things in mp4 over mp2 – scalability. Also, since it’s object based, re-usability is important.

Slide 7: TTS = text to speech, very low bitrate (bandwidth) is used.

Slide 10: speech coding is huge, as you exploit the source model, but only effective for ‘clean speech’ from 1 speaker.

Slide 13: mp2 and mp4 both use AAC (Advanced Audio Coding)

Slide 14: model of human auditory masking determines which parts of the sound to throw away, ergo: compression with minimally perceptible degradation. Played a demo of AAC @ 96 kb/s, music, very hi quality.

Slide 15: rate scalability, adds enhancement if bandwidth available

Slide 17: AudioBIFS is an object based, powerful technology that causes sound to adapt to environment (in a game context, monster sounds get more reverberant when I chase him into a cave). MPEG-4 structured programming language specifies variations in sound, all within a 16 kb/s stream.
Slide 18: Demo played at 16kb/s

Slide 31: Media-Object based model is huge.

Slide 9: Dynamism provided here, so streams can be added on the fly, not known about at the beginning of the program or transmission.

Slide 10: scene description stream, object descriptor stream, Visual stream and audio streams being integrated

Slide 11: BIFS = Binary Format for Scenes, built upon VRML

Slide 12: XMT Extensible MPEG-4 Textual Format: new standard for interoperability between HTML, XML, etc.

Slide 14: DMIF = Delivery Multimedia Integration Framework

Slide 15: MPEG-J Java built into MPEG-4, provides interoperability with all Java classes for programming.

Slide 16, 17: a Java VM built into mp4. ‘JAVA-MPEGlet’s are Java based applets for mpeg-4

Slide 19: Dave’s fav (surprise, surprise, he’s a QuickTime guy) editing an mp2 program is extremely difficult, whereas mp4 has all elements ‘iso-ed’ and allows for re-cooking it

Slide 20: you’re not actually editing the data, you’re just moving pointers around, non-destructive editing, like a ProTools time-line editing.

Slide 22: a ‘life-cycle’ tool that allows video or audio streams to be re-edited and then re-encoded, then placed back on the server. Completely different from mp2 – same analogy to ProTools non-destructive editing. Hint-tracks get re-generated after re-edit.

Q: is authoring for mp4 really too complicated to create?

Slide 6 is before (mp2), slide 7 is after (mp4)

Slide 9: don’t need segmentation to code the objects. They’re combined at the end-user side, not at the production side.

Slide 12: Buy the ball, a PPV (pay per view) model. See the soccer game, but not the ball, 'til you ‘buy the ball.’ See the game free, but pay to see it with the ball included.

Slide 3: MPEG-7 is not the successor of MPEG-4. This slide summarizes the differences.

Slide 6: details what mp7 IS: more of a description, in meta-data, of the content.

Slide 8: Associates information with the content, could be mp4 objects, or even mp2 or mp1, or non-mpeg content.

Slide 14: mp7 is not the analysis, not the processing, just the description.

Slide 19: MPEG-7 will be ready this summer.

Slide 20: discusses IPMP (Intellectual Property Management and Protection) in MPEG

Mp7 and mp21 deals much more with IP

Slide 22: the round ‘nodes’ in this schematic are interface points where you can put your IPMP stuff.

Slide 23: SDMI is not solving the problem

Slide 24: describes a bottom-up approach, whereas a top-down approach just does not work

Slide 27: web URL of where to go for further info

Slide 28, 29, 30: MPEG-21 description, goals

DRM should not be inhibiting, it should allow more access, not less. It protects you when you interact with data and generate content in response yourself. It’s all object-based.

The objective is hi-quality video on a 35" screen, not PC screen

H.263 v.1 = H.263+

H.263 v.2 = H.263++

MPEG-4 v.2 adopted H.263++ compression

Improved compression will enable HDTV on a DVD optical disc, and allow IP transmission of quality video at rates of around 1mb/s, whereas 2 and 3.5mb/s is current bandwidth requirement. See slide 16.

MPEG and H.26L are back together with a coordinated effort (H.26L will become H.264). Delivering content to the TV over the internet. Avoiding multiplicity of format is important, but nevertheless, it is going to be a multi-format world, so get used to it.

Lack of interoperability between platforms and vendors of MPEG-4 is a problem, a questioner from Dept of Defense observed.

Slide 4: Microsoft License Server controls DRM (Digital Rights Management)

Slide 5: Windows Media IS ISO compliant

DoCoMo is a wireless device, real popular in Japan, with integrated camera for uploading or downloading video clips that then playing them out thru the windows media player on a pc connected to the web.

Slide 9: lots of mp4 standards (versions) out there, so mp4 compliance is a real moving target. Furthermore, object-based aspects of mp4 have not been embraced by movie studios. HTML and SMIL can accomplish what you can do with BIFs in mp4. DRM not implemented in mp4, it’s not an end-to-end solution. MPEG-21 will hopefully address this in the future.

Microsoft will develop and deploy proprietary technologies to deliver better quality and features to customers if/when open standards such as MPEG-4 fail to deliver. Multiple standards are going to be a way of life going into the future (meaning MPEG-4 along with Windows Media). Jordi’s comments were pretty much opposed to all of the other presenters: he kinda trashed MPEG-4’s open standards in favor of Microsoft’s proprietary (read: closed) methods within Windows MediaPlayer. Isabelle, below, rebutted these Microsoft comments.

BIFS Binary Format for Scene Description

• Bandwidth: taking into account different objects in the same presentation
• Post: provide a common workflow for production of content
• Asset mgmt: integrate into existing broadcast asset mgmt solutions

Broadcasting Variations:

• Mp4 over IP: internet capabilities and built in return channel
• Mp2 video and mp4 systems: existing video content w/DVD-like interactivity
• Mp4 over mp2: content bdcstg. capability over existing transport

• Lower distribution cost
• Personalization
• Participation
• Protection

A little abt. Envivio: we make tools for broadcasters

• Mp4 broadcast software: authoring, server, client
• Partnerships: avid, intertrust, thomcast, sgi

Interoperability with other vendors

Showed Hugo, authoring tool, written in Java. Add different objects, audio, video, flash import, text, etc. Currently in alpha, beta in a few months. Showing at the booth. Showed a Peugeot and a WGBH program developed with Hugo.

Contrary to Microsoft’s earlier assertions, here is a working application, pure standards-based MPEG-4 with DRM built into it.

Mp4 –vs- mp2

• An mp4 video object distinguishes itself from mp2 video sequence by the addition of shape
• Shape comes in 3 flavors: rectangular, binary, and gray scale
• VOP Video Object Plane in mp4 terminology a time instance of a video objects is called a video object plane

• Mp4 additions: the studio object type and studio profile have been developed to accommodate coding of hi quality pictures at hi rates for television prodn. applications

Mp4 Studio Object: technology used in studio object type is not fundamentally different form overall mp4 standard. Also features a simplified binary shape coding tool to support the hi data rates that are involved. As in the original mp4 algorithm a short code is generated for each macroblock to indicate 1 of 3 possibilities. Transparent, opaque, ?.

4 main differences to mp4 mp4 definitions are extended by Studio Profile

Support for:

• larger pictures: today, up to 4.2 m pixels 2048x2048 pixels
• " bandwidths: up to 1200 mb/s
• More Chroma formats: studio moves from 4:2:0 to 4:2:2
• Higher bit depths: currently on 8bits per luminance and chrominance sample, the studio profile supports up to 12bits per sample. In combination w/extended chroma formats, up to 36 pixels may be used to represent the color of each individual pixel.

Conclusions: we need to understand the continuum from lo-bit-rate to mp2 DVD to hi-bit-rate profiles more for movies.

• RGB 4:4:4 12 bit (massive data rate) to handle hi resolution and hi quality video sequences
• Its design also enables simple transcoding from and to mp2 YUV 4:2:2P 8bit
• Ease of handling hi bit rates and large image files
• World Wide Open Standard

Slide 4: ISMA Internet Streaming Media Alliance, is working thru mp4 incompatibilities. Will define mp4 subsets per application. DivX and Windows Media are not MPEG-4 compliant. She pretty much trashed the Microsoft presenter who claimed to be mp4 compliant.

Slide 5: need ISMA because MPEG-4 is a generic standard, but profiles need to be defined. Will specify a subset of mp4 and IETF streaming protocols for practical delivery of multimedia over IP networks.

Slide 6: contrary to MS guy, mp4 is a highly efficient compression algorithm. For TV screens and PC screens.

Slide 7: WebCine is a Philips product, mp4 player (see download link above)

Slide 10: DRM hooks are in mp4, but needs to be implemented for each specific application (again, contrary to what Microsoft said earlier).

Slide 3: video telephone not necessarily a 3G thing (3G = up to 384 kb/s) We run them @ 14.4 and 28.8kb/s

Slides 3,4: conventional wisdom is wrong

Slide 5: actual deployed application examples

Slide 6: we’re at 2.5G now, 3G in 2002

Slide 7: app design needs to take into account limitations of cellular bandwidth of GPRS

Slide 12: an implementation of scalability, using a feedback channel with RTP (RTP/RTCP protocol: Sender report/Receiver report, facilitated by mp4)

Slide 17: It’s going to be a rough road for a few years before 3G rollout is complete, but mp4 will flourish, as it’s scalable to low-bandwidth wireless.

Cinema application is not a MPEG profile yet, it’s in the review and development process currently. It’s an Ad Hoc Group. Slides 2 thru 5.

No need for streaming real-time cinema: it’d be downloaded into movie theatres.

Slide 7: Visually lossless (theatrical release) vs. mathematically lossless (archival copy)

Slide 10: definition of visually lossless

Slide 11: Audio Specs – 96kHz sample rate, 16 channel, 24 bit, audibly lossless.

Part of NAB MultiMedia World, this conference offers a multifaceted approach to keeping pace with new media technologies and applications such as the Internet, streaming media, DVD and other emerging platforms. Business sessions focus on making investments, creating alliances and protecting intellectual property. Creative sessions offer successful case studies enhanced with demonstrations. Convergence sessions address enhanced/interactive television, asset management for multi-platform use and the intertwining of traditional and new media. Branding and marketing of digital content is covered from a case study perspective.

Pushing the Boundaries of Intellectual Property Rights and Regulation

The only thing growing faster than the Internet is Las Vegas. Questions whether it’s appropriate to address investing in new media in a Las Vegas casino. She’s related to Harman Kardon (Industries). Her office is very techno-centric. She has a CTO.

How issues are approached: she recounted the story of English King Canute, who commanded the tides to stop. When they didn’t stop, he turned and told the crowd to observe how powerless is the commands of Kings. Likewise, the MPAA (Motion Picture Industry consortium) fought the VCR vigorously, but lost. Legislative regulators have the same problem. Her goal w/respect to new policy issues is to learn the lesson of the transition: you can help the economy transition.

She’s a pro-business, pro-trade, pro-choice democrat. Voted against Bush tax cut, because she believes in paying down the debt. Don’t count on surplus being there. Last year, for example, Calif. had a 4 billion dollar tax surplus, this years it’s all being sent to Texas for overpriced electricity.

Blue Dog Budget group: Fiscal responsibility.

Favors responsible gun control and woman’s right to choose, and campaign finance reform.

• Broadband access will be subject of hearings this week before her committee. Opposes the chairman on Baby Bells
• Digital TV: 187 stations in 67 markets now broadcast in digital. Need balance and compromise.
• Napster: Intellectual Property Rights. Most letters and emails from her constituents favor the Napster position. Encourage development of technology to protect IPR. Techno solutions to protect these, as well as nurture new technologies.
• Privacy
• Internet Taxation

Finding the right balance is hard. There’s a learning curve in Congress, as it’s an analog place with few digital members. Digital and Analog doesn’t split along party lines. Goal is to create more digital savvy members of Congress. You can help by encouraging your congressman to embrace techno-offices, websites, etc. Encourage idealism in people who serve in public offices, as well as people who work in your offices.

Q: lack of support for women in the VC world.

A: more women coming out of MBA programs are going into Venture Capital businesses.

Q: Govt. in motion picture industry – studios owning theatres, there’s a current prohibition for this.

A: there’s a trend for consolidation and coalescence, so this needs to be looked at.

Q: General understanding in Congress – are they fearful, aware, shutting it out?

A: Do you remember when your parents got their first computer? Members of Congress are not comfortable with this new technology. In a converged industry, people who can barely even use a computer, can’t make the leap to digital understanding. They need to get out of Washington into tech communities so they can get it. Elect tech-savvy members of Congress.

Q: Internet access to members of Congress, thru distance learning

A: E-government initiatives are huge. It’s getting better, thru private and public efforts. Gray Davis set up a website in California to make it easier for citizens to access government services. Federal Govt. needs to work on this… converge the disparate things going on.

Q: Commerce chairman states that broadband bill does not circumvent telecom act.

A: Balanced approach to allow a variety of market entrants to flourish. It’s dangerous to tinker with this, because it could change the delicate market balance crafted in the Telecom Bill. She favors staying put, not changing the rules

Q: Joe Lieberman’s position on Hollywood censorship?

A: Friend, great leader, disagrees with him on his position on content – it’s troubling. The FTC has decided that the record industry has not done enough to clean up the content of recording. The Liebermann approach has the govt. doing something about. Record Companies on a self-imposed basis should address this, not government doing it. Runaway Productions approach has a huge impact on US jobs. Protectionism is a hard case to argue, she’s a pro-trade democrat. Govt. could be a partner to help fashion a solution, but it needs to be collaborative between private and public sectors. We need to work together to build a better world.

Creating websites is just a first-baby step. Co-location of TV and PCs combines the 6 foot and the 18 inch experience.

Moesha, 1997 Interactivity: enhancing re-runs, story-driven narratives

Judge Judy did weekly episodes. 86% of broadband viewing is happening from home. 3% clicked ads. Media companies are not looking to interactive TV, as they’re no longer looking for cost centers. iTV (European) survey showed only 5% liked or used interactive services, but 90% liked customized weather (which IS interactive TV). Maybe we should quit calling it Interactive TV, and just call it TV.

Content from a Cable Network perspective

Examples: enhanced TV TWC the weather channel. AT&T Digital Cable integrates web and TV.

• The real killer apps
• Distribution
• Pricing and packaging how do you get into the home? Give away the razor, sell the blades

Successful examples: in the beginning there was MUDD, now we have windows Media

• Mission Impossible, the web adventure 1996 a 6-week interactive non-linear adventure game.
• American Cybercast (EON-4) was the first company to take hi-quality TV programs to the web.

• A great story
• A compelling experience that uses its medium
• Great talent
• Cost-effective production
• Know your audience

• Talent is here
• Audience is here
• Broadband and wireless continue to expand the possibilities
• New forms of distribution are evolving

Soulgeek, a clip done by Industrial Street. Smoov Samantha’s World a web series

Content is probably the hardest thing to create. 90% of all new TV shows and magazines fail. Overwhelming majority of new media companies won’t be around in five years.

and 10:1 over-subscription. IP video @ 0.8mbps for MPEG-4, whereas Digital cable uses 3.4mbps for MPEG-2. IP video costs ¼ as much. Therefore, we believe IP will be everywhere.

• Current Broadband IP platform
• 4 mil home DSL and Cable Modems, 80% annual growth
• 8 mil college dorm rooms
• 10 mil office PC’s
• Multiple Device Connections
• IP settop box and DOCIS modem
• PC-TV wireless device
• Larger digital displays
• Home media server

• Entertainment distribution moves from a packaged good model to digital distribution
• $60 bil spent worldwide on entertainment at retail
• Broadband delivery w/intelligent buffers
• PC
• Web TV+, DCT 5000+
• Casio E 100, Palm PC’s, Clarion Auto PC

Every single entertainment company has made the decision that they want to be in the VOD business.

• Buy bandwidth in last mile
• Competition on QOS
• Higher Intertainer margins
• Qwest, Verizon, SBC, Bell South all moving to guaranteed 700KBPS

It’s not your grandfather’s TV or is it? As baby boomers retire, will they prefer a more personal, targeted form of programming that better meets their new interests? How will the viewing habits of the muti-tasking Generation X'ers change as they mature? Will the computer screen always be the natural and more comfortable format for entertainment and information of Generation Y...the children of the new era of television?

No matter how viewers choose to use television, the key to success - the characteristic that connects all audience segments and delivery protocols - lies in good programming. Entertainment insiders - industry newsmakers who have spent their careers either developing, guiding or analyzing programming - will exchange their insights on how content developers will address these marketplace realities and produce cutting-edge programs that have realistic financial returns. Will the edge belong to Internet producers thought by many to be the digital age programming pioneers or the experienced and proven talent of traditional entertainment creators?

REALITY: With the programming edge comes increased revenue!

Moderator(s) Sam Donaldson, ABCNEWS, Washington, DC

Hosted the first regularly scheduled internet newscast (webcast).

Changing demographics and lifestyles: how has that changed your programming?

Talk about local markets: what do you say to them about what would work now that didn’t used to work?

How do you ensure that people get the info from them, not some other site elsewhere?

With so many channels, it’s become a very fragmented and fractured marketplace. Over the air broadcasting is not going to be a thing of the past. The biggest challenge in the past 7-10 years has been the cost-per-million – it has increased significantly. Broadcasting vs. narrowcasting have different futures: one is passive the other is active. Some will stay with traditional broadcasting, others will embrace the new media. Making money will be done by running a program more than once. TiVo has not had enough market penetration to determine yet if this’ll really change things. If all the networks are targeting 40 year-olds, then we (Fox) started targeting the mid-20s crowd. StarTrek died in the 70s because it wasn’t viable in a 3-network world. Now it’s viable in the multichannel, syndicated environment. We’re no longer limited by channel time available. The entire FCC model was based upon spectrum scarcity. Now, it’s only economics, as there’s virtually unlimited channel availability. When you move to a world of 10 or 20 million websites, there’s a lot of information that’s free, unfortunately porn is one of the few models that people are willing to pay for. Nudity on Sopranos is an example of broad media accommodating changing mores. If I were running a local station in this country, I’d focus on that which concerns my community. A network can’t really do that.

I’m a content provider, so for me, it’s all about the narrative. We don’t see the medium changing what we do that much, because the medium doesn’t change the fact that it’s all about the story, not the medium. The distinction between entertainment programming and factual based programming: there still needs to be a star. The role of the traditional programmer will change. Will start with special interest programs getting aggregated. It’ll start locally, with local broadcasters providing the content, sponsored by manufacturers and advertisers. NakedNews.com couldn’t make it on traditional broadcasts. How about naked baseball? Gets women interested in a predominately male dominated audience. Working class comedy is still our core business.

Streaming video is there now. Right now, the technology is not limiting us. Now there is no limit to what we can make available. The hurdle is to get the content providers to cross over to the new medium. It’ll change dramatically the way you can interact with your audience. Layering in a level of communication between the artist and the audience. It’ll become harder and harder to distinguish between what people do on their TVs vs. what they do on their computer. We’re going to see more people migrate over to the TV screen for news, as the internet migrates to TV. Traditional broadcasters will continue to provide quality content. We rely on the experts to continue to provide this. The internet will just convey it in ways it has never been conveyed before. Wonderful thing about distributing content over the web is that we can learn a lot about the user as they traverse the internet. Yahoo Broadcast rolled out a new product this morning which gives advertisers ability to target users.

As a talent agency, we can focus on who the various the talent is. We don’t have to choose based upon medium. As you move from broadcasting to narrowcasting, the business model becomes very important (i.e. profitability). More outlets are good for our clients, but do provide challenges. New media don’t cause traditional media to go away, they just change them. TV didn’t kill radio, the internet will not kill TV. We’re talking about small screen content from a presentation standpoint, but the content is still there. Lots of radio stations have stopped streaming their broadcasts because of payment issues in re-broadcast. There are formulas that provide for residual payments, and these’ll be adapted to the new medium. Make sure that requests from both sides are reasonable. This’ll prevent strikes (yeah, right). Oprah, Phil Donahue both started out locally. It’s an incredible laboratory for great programming. Experimentation with wonderful talent and ideas. Local TV is the building blocks of programming. Who wants to be a thousandaire (cheapskates).

Q: Oxygen billed itself as ‘breaking the mold’ Why?

A: Karyn – first analog converged show. Trackers is another example used by young girls. 35% of viewers of Oxygen are online to the site at the same time.

Q: what happened to cinema 40 years ago resulted in fewer, but bigger films being made. What will the internet do along these lines?

A: Tenzer – Narrowcasting will change the business models, good product made less expensively. People who want to communicate will find good ways to do it.

Q: VOD, as it becomes more popular, what about advertising. I’ve had one for 6 mos now, and it’s been that long since I’ve seen a TV commercial.

A: Tenzer – we represent TiVo, but VCRs gave the same ability. TiVo and its competitors are just doing the same thing more efficiently. Quantity and Quality of the eyeballs isn’t the same as it was 20 years ago. But technology advances is what it’s all about. Smart ad people are trying to make their ads more effective.

Caryn – Hallmark Hall of Fame is an example of adaptation of advertisers. Advertisers will figure out how to get the CPMs some other way.

David M. TiVO causes people to watch more TV, many subscription based.

Garth – it scares me to death, the idea that people are going to skip commercials.

Sam – why can’t advertiser’s agencies just make better ads? You can learn more about american culture in a McDonald’s ad than anywhere else.

Q: How does one submit a proposal for a new show?

A: usually get an agent or attorney. Produce a pilot is a good idea.

Q: Mr. Donnelson, I’m a huge fan of yours…please take your clothes off now (nakednews.com)

A: Sam – Yikes! Even when I was young you’d have been aghast.

John Marino introduced Lou Dobbs: not only understanding of convergence, but he lives it thru CNN and space.com. He’s won nearly every award for TV journalism.

Content, no matter what you hear, is the driving force of our industry, irrespective of how you distribute it. AOL-Time Warner is perfectly positioned to take advantage of convergence (gratuitous plug). When we began space.com 2 years ago, after I’d left CNN, Ted Turner had me out to the ranch. Ted said it’s weird having you here as a pal and not an employee. Lou said I outrank you now. I’m CEO of space.com. Ted said I’m the CEO of a Ted Turner non-profit organization. When Lou pointed out that’s a non-profit, Ted observed that so was space.com.

The perspective required for convergence is overwhelming. Everything we are relying on now requires perspective. The pace of change is astounding. In terms of the communications industry, it’s amazing to consider the last 5 years of change. The marketplace will change even more radically in the months ahead. Who will prevail, and how. Which models will emerge as successful. Reality set in in the form of the capital markets, reminded us that business moves in cycles. A moment of silence for technology investments. Remarkably, the consumer stayed in the economy. Now, we’re trying to innovate in a sagging economy. Nevertheless, I’m optimistic about the future. I’m an unabashed optimist. The current economic weakness is imposing a level of discipline on us, which will strengthen us for the future. Diversification is key – multiple revenue streams. The need to differentiate and attract customers is vital. BtoC, BtoB… PtoP is most important: path to profitability. Focus on the bottomline. Startups and standalones work, and they are working. I applaud all of you who are out there on the front lines. The media industry is undergoing a vast transformation. Consolidation. But bigger isn’t always better. There’s a growing debate about its effect on news. How we view our audiences, and how they view us. The days of passive audiences are gone forever. We cannot be technology driven – we must be customer driven. Media companies will have to work twice as hard to retain customers. The media industry bills $600 billion dollars.

Three keys to business success:

1. Diversification
2. Differentiation
3. Discipline

The digerati came up with a new metric judge of a company: EBE earnings before expenses

Companies now need to address the Bottom line and the Horizon line.

The big idea of convergence isn’t about TV on the web. Web users are not frequent TV viewers. That audience is more likely to make online purchases.

I’m a true believer in the web and its possibilities. There’s never been a more effective means of distribution in our history. The web will continue to play a pivotal role in TV. But what will change is how traditional TV views the web. John Kenneth Galbraith, my professor, said "There are those who don’t know, and those who don’t know that they don’t know."

• More websites will attempt the subscription model in months ahead
• Advertising runs in cycles, and will rebound in second half of this year
• As more consumers demand interactive services, media companies will position themselves to deliver interactive services. I’m a huge believer in broadband. Progress is being made in spite of the sluggish economy.
• Broadband will increase steadily over the next few years. Any company not planning for this is making a huge strategic mistake. I’m a bull on the markets and the economy.

Classic and traditional definitions no longer apply. There’s abject confusion in the market today about what company’s earnings are. There’s confusion and speculation in the marketplace

Fed cut interest rates for the fourth time this year. This is a Fed on a mission. This boosts investor and consumer confidence. In my opinion, tax cuts, interest rate cuts and productivity increases will fuel growth in the stock markets. Everything works in cycles, when you step back and view the last five years, we’re in an amazing period. CNN, 6:30pm eastern time on May 14^th, tune in. Looking ahead, we have a remarkable future.

"The future is not what it once was."

"The future ain’t what it was" Yogi Bera

Q: considering tradl. broadcasters and broadband’s growth, where’s it going?

A: it’s complimentary, it adds to the pie, especially considering simultaneous TV PC usage

Q: what’s your opinion of international changes?

A: one of the hallmark’s of change will be that foreign users will dominate the web, just as the US has dominated technology up to this point. Wireless continues to dominate in Europe and Asia, the US continues to lag. I’m excited about wireless, but I question revenue models.

Mads: The most influential communications exec in the U.S.

John: 2 yrs. ago, it seemed like every idea somebody came up with would work. Now, it seems that nothing will work. Dot coms have collapsed, so have traditional companies. But there are going to be phenomenal opportunities. For 100 years, the communications industry was the most boring there was – you know, telcos, etc. Not now. The center core of the revolution is still very solid, and it’s just beginning.

• Commerce one, priceline, drugstore, eToys have tanked
• Ameritrade, eBap, Juniper, Amazon, Broadcom, Exodus have done better, but they’re still down.
• Still huge growth for 2 years
• Internet basket total market cap since 1996: from 98 to 2000, market cap grew 4x (not counting the last year)

• Internet growth continues
• A few in each space will succeed

• Capital access
• Credibility
• Speed to market
• A real business model

• Radio = 38 yrs.
• TV = 13 yrs.
• Cable TV = 10 yrs.
• Internet = 5 yrs.

The Growing Internet: Whatever chart you put up, there’s a huge exponential curve up: networks, hosts connected to the net, etc. Before the advent of browsers, only tech-types used the net. Now, everybody’s an expert. There’s never been a technology in history who’s infrastructure has grown 1000% every year.

• Wireless and internet explosions
• International deregulation, and
• Capital access eased making large new players feasible

• Broadband brings more internet: video explosion
• Wireless data and devices grow: gadgets proliferate like crazy; internet glasses with voice recognition technology, gps, maps scroll up (unfortunately they weigh 8 pounds). Cars now equipped with internet to communicate with dealer. Coke machines that tell distributor to come fill it up.
• Voice: (this is the biggest change) voice-browsers, recognition, activation The internet is still way to difficult to use for most people. But if you could pick a phone and bark out commands, this would be huge. Right on the horizon. If you had a device the size of a PDA or cellphone, you wore it all the time, and it had voice recognition and a speaker phone, so you talk to it all day long, and in the background it has a voice browser which is really intelligent, because it knows everything about you (cause you told it). It knows you’re going to Chicago today from Las Vegas, and it knows a truck overturned 2 miles ahead and re-routes you, but knows you probably won’t make it to the airport, so it calls ahead and gets you a later flight, and it notifies your Chicago appointment that you’re going to be late. Example: isyourhouseonfile.com

• Fiber
• copper-DSL
• CATV
• Fixed wireless radio
• satellites, blimps and flying objects

• provides faster downloads, reduce frustration
• "always on" feature provides more natural interaction – currently, ‘regular users’ of the internet is defined as those connecting 4 times a month – "always-on" will change that.

• video conferencing
• multimedia applications
• telecommuting
• distance learning
• telemedicine

e-Commerce: are you really ready? Web accounts for less than 5% of orders now.

but by 2004, 65% of all orders will be done over the web

Savings for Web Enabled: the cost per sales interaction is dramatically more efficient (cheaper).

This is why big companies are rushing to the net for supply chain and sales.

By doing these things over the internet, customer service is more efficient and satisfying, no waiting on hold, etc. No one is going to give up on ecommerce.

Half of all B2B transactions will be conducted digitally

Internet Improves communication and speeds things up: But it’s not magic, not every idea works

It’s still business: products, sales and service, distribution. The internet just makes all this more efficient

Why go slow? Risks: channel conflict, cannibalization, etc. But,

History has been cruel to those afraid to change and ‘cannibalize’ AT&T, MCI Sears, IBM

Brick and Mortar reacts

Channel conflicts and all these other issues are here. You can’t just

Would you stop breathing? You’ve got to feel the internet..

• Motorized transportation era: 1910-1925
• Internet communications era: 1995-2010

Q & A:

Bill Gates says bandwidth should be free. Well, we think software should be free.

Local broadband access will be a huge driver. Today, a very small percentage of internet access is broadband. Computer to Computer applications will drive bandwidth demand like nothing else. Enormous bursts get sent.

Other companies owned: BMG, Arvato, Direct Group

RTL Group: 22 TV and 18 radios stations in 11 countries, world’s second largest producer of TV movies, Europe’s leading sports network

We’re forming broadband alliances: ISPs/Portals – content – telecoms

Current content distribution networks are inundated with choke points router, backbone and ISP level. We move the server out to the edge of the network. iBlast technology lets local TV stations broadcast tradl. programming, hi def digital TV. We offer content providers more affordable access to media-hungry consumers. While incremental usage can be expensive for tradl. distrib, it has no effect on iBlast costs. Great model for delivering content directly to consumers. Storage needs at the home are growing twice as fast as processor speed.

iBlast uses satellite delivery to local TV stations, where it’s blended w/digital terrestrial signal, then broadcast directly into the home.

Consumers say they want: choice, convenience, control

• size of distribution
• availability of content the user’s experience
• value of technology utility it brings as a quotient of cost

• security is a result of channel control, not sophistication of technology
• broad choice of premium content required
• piracy stems from artificial barriers of cost and distribution

• ends ‘best effort’ delivery and unspecified bit rates
• creates service offering demanding guaranteed bit rates and quality of service
• encourages last mile competition based on quality of service and true broadband access

• delivers personal content mix to the consumer
• encourages repeat usage of our channel to replicate quality content experience
• protects the channel insuring revenue capture and maximizes monetization

In 1995 we sold the first download internet music on the net. Now we’re trying to save movies from a fate worse than Napster.

• clueless phase: you’re going to be delivering your product with TCP/IP, customers said "we don’t know what you’re talking about, but if you’re right, then we’re going to have to have you killed"
• crowded phase: lots of comers
• huberous phase: when all the big companies presume that because they’re big they’ll be able to figure it out for themselves.

Download of feature films is our business model. Saving money and making money. He downloads to theatres.

Darcy Lawrence, Global Crossing

Goals:

1. metro networks
2. building fiber to our customers
3. ?

creation, storage, mgmt, delivery of content to Broadcast, Digital Asset Mgmt, Production

We link: Prodn. houses, design studios, publishers, animation creators

connected to: studios, broadcasters, ad agencies, special efx

We’re in LA, San Francisco, Vancouver, Chicago, Toronto, NYC, and key European media creating centers.

Q&A:

Q: how close are we to truly usable wireless video?

A: iBlast: deployable today, but only to settop boxes. We do HD beamed to settops

Digital Dailys is doing it. It’s there, it’s just a matter of getting it out into the business world.

Q: Bertelsman’s agreement with Napster, why’d you do it?

A: It’s about protecting the artists and copyright holders.

Q: Global Crossing: shift from being a network company to being a content provider?

A: DRM is what we’re building into our network

18 yrs. old. Artists, marketing execs, market research. Steve Wozniak got involved 10 yrs. ago.

ABCs of broadband

1. Audience: used to be headcount. Multitasking changes measurement
2. Adoption rate: devil in the details
3. Appreciating packet-physics: technology architecture, costs, quality of service
4. Artist recognition: am I getting credit and recognized?
5. Aware and informed legislature: lots of elected members don’t have technology liasons they used to have. They’re looking for us to come in and tell them what our dreams are
6. Always on: key element of broadband. Sony just announced that every piece of gear, of any kind, they make from now on, will have its own IP address (yik