The television of the future

Tim Webb looks at the breakthroughs in picture and sound quality that have got the TV companies on the edge of their seats

We have been promised a revolution in television viewing before, but the reality has never quite lived up to the hype.

The idea of 3D TV was great, but having to wear those glasses with red and green lenses was a bit of a turn-off. Surround sound sounded wonderful, but the practicalities of having speakers and trailing wires all over the living room put many people off. And interactive TV was OK in principle, but users sometimes found they had time to make a cup of tea after pressing the red button on their remote control before they got any of the services requested.

However, two new developments in British television - HDTV and IPTV - could change all that.

High-definition television marks a step forward in picture and sound quality (see the box below), and the industry is right behind it. Cable operator Telewest will be the first UK company to offer programmes in this format, with the launch of an HDTV personal video recorder later this year. The satellite giant BSkyB, headed by James Murdoch, will wade in early next year with plans to offer a diet of films, sport, documentaries and drama in the new format, for an anticipated extra monthly fee of £10 to £15. NTL is expected to launch HDTV within two years.

BSkyB is predictably bullish about the technology's pros- pects. It believes the format will give it a big boost in meeting its target of 10 million subscribers by 2010, partly because the free-to-air broadcaster Freeview is unable to offer HDTV.

Brian Sullivan, BSkyB's director of new product development and sales, says: "HDTV will blow you out of the room. This sounds like hyperbole, but if you watch sport on HDTV then it'll feel like you are actually there in the stadium."

You wouldn't expect BSkyB, which reports its full-year results on Wednesday, to say anything less. But independent analysts also predict big things. "Television moved from black and white to colour, to digital. HDTV is the next step," says Paul O'Donovan, an analyst at research firm Gartner.

Already the BBC is filming some programmes in HDTV. This is partly to sell into the US, where the technology is already established. But HDTV also offers new possibilities for programme makers. For example, the BBC is currently filming the natural history series Planet Earth, to be screened in February. A BBC source says that because HDTV cameras can film in dark conditions, the Planet Earth crew are able for the first time to record Birds of Paradise in the rainforest.

HDTV will create a divide among the broadcasters. Freeview, because of limits on its bandwidth, will be unable to transmit in HDTV, at least for the time being. And others, such as ITV, have no immediate plans for the technology. Mr O'Donovan at Gartner says: "There are significant costs involved in upgrading production equipment to support HDTV. The ITV guys are much further behind. As HDTV grows then viewers will notice a degradation in quality from one broadcaster to another."

The new format also requires a big investment on the part of the consumer. A typical HDTV-compatible flat-screen TV will cost at least £1,000. And there is some disagreement over the type of HDTV set that consumers should buy.

Mr O'Donovan says that for viewers to notice a significant difference in quality, they will need to spend over £2,000 on a TV with at least a 42in screen.

Rob Shaw, product manager at Samsung Electronics, says: "HDTV will be better on large screens. But even on a 32-inch TV, you will be able to see the difference."

However, Mr Sullivan at BSkyB insists that HDTV will work on more modest sets. "Two years ago it may have been the case that you needed a 42in TV, but the quality of screens has improved dramatically. As a general rule, you will need a 26in set or larger."

In the future, many consumers will be connecting their HDTV sets to the internet though the second major development in television: IPTV.

Internet protocol television (see the box below) is a way of broadcasting programmes over a broadband connection, and where HDTV plays into the hands of BSkyB, IPTV poses a threat to the company as it does not have a broadband product.

The IPTV market is expected to take off next summer when BT launches a service that will be available to all homes with access to broadband. BT, headed by Ben Verwaayen, is thought to be in discussions with programme makers, including the BBC, to secure the content for its service.

Wanadoo, the internet service provider owned by France Telecom, is also considering launching IPTV later this year, while Homechoice already offers video on demand via broadband in parts of London and the Home Counties.

ITV and the BBC are both monitoring developments, but have not announced plans to launch their own services. The BBC, which has an obligation to make its content available to as many licence fee payers as possible, could form a joint venture similar to the consortium behind Freeview. ITV is also looking at new ways of selling its content.

Meanwhile, NTL and Tele- west are considering whether to launch IPTV to complement their cable services.

As a result, Ofcom, the media and telecoms regulator, says that by 2010, the number of households able to view TV over broadband will probably exceed those that receive an analogue terrestrial signal.

There are three big attractions in IPTV. The first is reach: Ofcom predicts that 99.6 per cent of homes will be connected to a broadband-enabled telephone exchange by the end of the year. This offers a huge and instant customer base for the IPTV providers.

Second, it will offer interactivity. Viewers will be able to respond to advertisements instantly, for example, by clicking for information or even placing direct orders via their remote controls. This interactivity will go beyond Sky's clunky "red button" service.

As a result, IPTV companies will potentially be able to charge advertisers a higher premium.

Finally, IPTV will offer a way of delivering video-on-demand services, where customers can gain access to programmes from a central database and watch them whenever they want. This could reduce "churn" - the rate at which viewers do not renew their subscription. However, video on demand will not be exclusive to IPTV and already the competition is hotting up, principally between BSkyB, NTL and Telewest.

One way in which BSkyB might get round its lack of broadband access is by using the Sky Plus video recorder to "dump" programmes, via digital satellite, on to the box's hard drive to provide another video-on-demand service.

But the amount of content is limited compared to video-on-demand via IPTV or cable, which will use central servers that can store far more programmes.

Laurie Patten, a manager at technology consultancy Spectrum, says it is unlikely that BSkyB would want to launch its own broadband service. "It is more likely to seek to leverage its brand and content through partnerships or content deals with broadband operators."

Gidon Katz, commercial director of NTL, argues that competition for video on demand is good for the industry. "The more people throw money at it, the more it reinforces our position," he says.

So, with the investment in new television services such as video on demand coming on stream, and with HDTV and IPTV just around the corner, the long-promised TV revolution could finally become a reality.

TOMORROW'S TV

What is HDTV?

High-definition television offers enhanced picture quality and sound. HDTV has four times more pixels than a standard television broadcast and people who have seen trials of the system report that images appear to be in three dimensions.

Already available in the US, Australia and Japan, BSkyB will launch HDTV in Britain early next year.

HDTV will work on flat-screen plasma televisions, but analysts believe that consumers will need a very large TV set to fully appreciate the benefits.

What is IPTV?

Internet protocol television is a way of watching programmes via a broadband internet connection.

Both BT and Wanadoo are planning to launch IPTV services within the next 12 months on the back of the recent growth in broadband.

IPTV could offer true interactive services, allowing viewers to gain more information on particular programmes and adverts.