USDTV woes: Bad sign for digital broadcasting?
July 12th, 2006I’ve doubted the business prospects of USDTV, a digital pay-TV service delivered over the air in four cities, and news of their Chapter 7 bankruptcy filing isn’t much of a shock. The over-the-air reception challenges of American digital TV placed a huge question mark over their business model. Last month, in arguing against the likelihood that the U.S. will see a huge expansion of broadcast channels on the order of Britain, I mentioned USDTV:
If their product succeeds, it may bode well for free multicast channels.
The people who wrote the book on product success stories usually leave out that seventh chapter.
My other beef about USDTV was that broadcasters were leasing out the public airwaves to a pay TV service.
From what I’ve read, though, some talented people at USDTV were really focused on the technologies used to deliver their product. Their customer service folks even answered support questions from people who bought USDTV receivers simply to receive broadcast channels, without ever intending to subscribe to their service.
As an organization, they probably have some valuable knowledge about ATSC broadcast reception—perhaps the FCC or broadcast companies should hire them as consultants.
Earlier:
USDTV to release new set-top boxes
• Link: Broadcasting & Cable
Andrew Cotlar says:
August 3rd, 2006 at 5:46 pm
The real problem with USDTV is that it didn’t try to replicate the free-to-air model of the widely successful Freeview in the United Kingdom. By starting out as a subscription service, it in fact emulated the ITV model, which crashed and burned in Britain. I think there is still a good opportunity for somebody to offer a free multichannel video service with a suite of channels more than one gets over the air but less than the pay services. Then the organization could upsell its viewers to various subscription packages in a model that would emulate a la carte. Freeview is doing just this through its “TopUp” program and is doing well. American entrepreneurs would do well to look overseas for some inspiration. But, alas, the myth of American exceptionalism seems to interfere with this.
Andrew Cotlar
Steven Sande says:
August 4th, 2006 at 6:41 am
I still suspect part of the issue is the reception capabilities of ATSC (the U.S. digital TV standard, which uses a different—some would say less robust—modulation technology than Britain’s). Maybe we’d have a Freeview-like alternative if investors were more confident about ATSC and sure that most households will get decent signals without having to install rooftop antennas. If the switchover in 2009 goes smoothly and over-the-air viewers are happy, perhaps more stations will offer multicast channels that could eventually compete with pay TV.