The Coming Convergence: TV Broadcasting + Internet Data

by Noriko Takezaki

The technology that Intel introduced to Japanese broadcasters, called Intercast, enables the transmission of HTML files simultaneously with television programs via the broadcast's vertical blanking interval (VBI) signal. Intel has been carrying out Intercast trials in the US since the 1996 Atlanta Olympic Games, through tie-ups with such broadcasters as NBC, CNN, and MTV. However, the results of those trials seem to have been far from a big success.

Made-in-Japan Web broadcasting technologies
Disappointed by Intel's eventual decision not to bring its technology to Japan, and fearful of falling behind in the new era of the convergence of communications and broadcasting, some Japanese broadcasters have decided to launch their own Web broadcasting services this fall by using made-in-Japan technologies. Unfortunately, there are two such technologies now on the Japanese market, a reality that is causing some confusion among broadcasters.

TV Asahi started data-multiplexed (combined TV and Web) broadcasting trials in April using a technology called ADAMS (TV-Asahi Data and Multimedia Service), which was developed by NTT, Matsushita Electric Industrial, and LSI Japan. TV Asahi expects to start full service of its data-multiplexed broadcasts in October. Tokyo Broadcasting System (TBS), meanwhile, was scheduled to start service trials of its own data-multiplexed broadcasting system in July, with full-fledged service also slated to start in October. TBS has adopted a technology called Bitcast, developed by Japanese venture company Infocity.

Both ADAMS and Bitcast can transmit HTML files along with television programs at about 40K-bps. Reception of those files with a normal PC requires an add-in board and specialized software, which will be priced in the JPY 20,000 to JPY 30,000 range.

The difference between the two systems lies in how viewers can access the received webpage information. ADAMS is an "on-demand" service; the HTML data it sends is automatically downloaded onto the hard disk drive of the PC, and the stored webpage information can thereafter be accessed by the viewer at any time. Bitcast, on the other hand, provides a "real-time" service, with a TV program and its related Web data transmitted simultaneously. Viewers can access the Web information associated with a TV program while they are watching the program.

"Data-multiplexed broadcasts are an attractive new service for us as a step towards digital broadcasting," observes Akira Fujii, a TBS deputy division president. "Recently, we have been concerned about the decrease in the number of TV viewers while the number of PC users increases. So, if we can capture the growing number of PC users among our target viewers, we can definitely expand our market. In this sense, we expect much of the data broadcast service."

TBS was not optimistic about this new service from the beginning. "There were many concerns about it within the company," Fujii admits. "But now, we think we can create TV programming suitable for the data-multiplexed broadcast service. For this purpose, we have been having intense discussions with information providers regarding content development."

The Intercast Consortium
Infocity, the developer of Bitcast, is well known among Japanese broadcasters because of its cooperation with Intel. Infocity was an original member of the Intercast Consortium in Japan, a group established by Intel to promote its Intercast technology. (Four PC manufacturers and two board manufacturers were also involved in the consortium.) Infocity was picked by Intel to be a member of the consortium based on its achievement in developing the broadcast tuner board for NEC's 98MULTi CanBe (a PC with built-in TV reception functionality). Infocity was expected to be responsible for modifying the Intercast technology to be suitable for the Japanese broadcasting system.

But quite aside from its participation in the Intercast Consortium, Infocity had been developing a data-multiplexed broadcast technology on its own (financed in part since 1994 by a subsidy from the MPT-affiliated Telecommunication Advancement Organization). With Intel's surprise pullout of Intercast from the Japanese market, Infocity grabbed the chance to offer its own technology as a replacement.

Regarding Intel's decision not to introduce its Intercast technology to Japan, a spokesman of Intel KK (the Japanese subsidiary of Intel) explains, "Our parent company's strategy was, and still is, to investigate the market demand for the data-multiplexed broadcast business first in the US, and then to decide whether Intel should promote the technology to other countries." The purpose of the Intercast consortium, he asserts, "was to study the technical feasibility of Intercast, and its business opportunities. The consortium was not established with the promise that Intel would definitely introduce Intercast in Japan."

Japan's broadcasters, however, did not see the consortium in the same way. Rather, they apparently believed that Intel would provide them with the Intercast technology. TV Asahi, in fact, had already established its plans for a data-multiplexed broadcast service based on the Intercast platform, to the extent of laying the groundwork for a service license application to the Ministry of Posts and Telecommunications (MPT).

Facing life without Intel
Faced with Intel's abrupt withdrawal of Intercast from the Japanese market, TV Asahi was forced to find another alternative quickly. "We thought about adopting Bitcast at once," says Kazuo Fujimoto, an executive of TV-Asahi Data, the subsidiary of TV Asahi in charge of ADAMS. "However, since Infocity said that the development of Bitcast would not be ready for the start of our trials in April, we decided not to adopt it."

"Also," Fujimoto adds, "we were concerned about whether Bitcast can really be an open system for broadcasters, one flexible enough to reflect broadcasters' opinions. A system controlled by a single developer is not likely to be completely open. So to ensure a truly open and flexible system suitable for broadcasting application, we decided to develop one by ourselves."

The development of Bitcast was long known among Japanese broadcasters, but it was not until this spring that the first of them, TBS, expressed an interest in adopting the technology. This was in part because, while a member of the consortium, Infocity was semi-controlled by Intel and could not aggressively promote its own Bitcast technology. But now, with the support of TBS, Bitcast will be launched in the Japanese data-multiplexed broadcast market.

To work with the Bitcast system, both NEC and Fujitsu have been developing PCs with VBIta broadcast functionality, while NEC and I/O Data Devices have been developing add-in boards. For the ADAMS system, add-in boards have been developed by several manufacturers, and a PC incorporating such a board is scheduled to be released soon by Matsushita Electric Industrial.

Market questions
Unlike in other business fields, TV broadcasters are concerned about whether other broadcasters will follow their lead when starting a new service. The broadcast business requires licensing from the MPT, and the ministry generally expects broadcasters to keep a service going once they start it. Therefore, broadcasters typically prefer to wait until another company launches a new service, so that they can follow.

In the case of TBS, a spokesman admits that the company expected other broadcasters to quickly follow the TBS lead and adopt the Bitcast technology. Contrary to TBS's expectations, however, Nippon Television (NTV) and Fuji Television have not yet made up their minds.

"We haven't got a clear picture of the prospects of data-multiplexed broadcasts yet," cautions Masaru Maeda, advisory manager of the media planning and corporate development division of NTV, which was expected to adopt Bitcast almost at the same time as TBS. "In order to start a new service, we have to make sure it will be marketable and profitable for our company, " says Maeda. "Unless we can have a clear view of the new business prospects, we cannot simply snatch up a new technology, blindly believing the sweet words of the manufacturers."

Maeda acknowledges that NTV was very interested in Intel's Intercast technology when it was first introduced to Japanese broadcasters. But since Intercast has been withdrawn, and the prospects of the data-multiplexed broadcasting market are not yet clear, NTV plans to review the situation. As NTV joining either camp will create a 2-to-1 majority, both the Bitcast and ADAMS camps are aggressively wooing NTV. The camp that captures NTV is likely to prove the winner of the data-multiplexed broadcast competition in Japan, and will be able to more easily win over other broadcasters.

Microsoft's strategy
Meanwhile, the other half of the Wintel powerhouse, Microsoft, has started making plans to enter Japan's data-multiplexed broadcasting market. In the US, Microsoft and Intel have announced their strategy for convergence of the PC and the TV through their PC98 platform. [Note: This has nothing to do with NEC's PC98 Japanese computers.-Ed.] Through this PC98 platform plan, they intend to mandate the incorporation of a TV tuner into all new PCs shipped beginning in 1998. By the year 2000, they expect some 40 million PCs with built-in TV tuners to be in use throughout the world.

As part of its PC/TV plan, Microsoft KK (Microsoft Japan) has been setting its eyes on data-multiplexed broadcasting services in Japan. Microsoft Japan intends to make either Bitcast or ADAMS, or both, available on the upcoming versions of Windows (code-named "Memphis") and Windows NT (version 5.0). The company will enter the content side of the data-multiplexed broadcasting business by, among other things, offering an Internet-based guide of TV program information. To this end, Microsoft Japan has been negotiating with both the Bitcast and ADAMS camps regarding possible tie-ups.

"We don't intend to 'eat up' the made-in-Japan technologies. Rather, we're talking to companies about the successful development of data-multiplexed broadcast technology, a technology in which Japan is ahead of the world," says Susumu Furukawa, chairman and CEO of Microsoft Japan. "These companies have developed superior driver technology that complies with the unique requirements of the Japanese broadcasting system in accordance with the Broadcast Law in Japan. If they try to stick to system development by themselves, and develop their own applications, however, they will limit their business possibilities."

"What I'm telling them," Furukawa says, "is that it would be beneficial for both of us to have some form of tie-up. In return for allowing us to use their driver technology, we can provide them with support, such as through content development for the "push-type" service and through business promotion of the service. Also, we can introduce their technologies to the world [through the Microsoft channel]."

Microsoft Japan's efforts for the convergence of computing and broadcasting have also been extended to making a commitment to government and related industries. Since last year, Furukawa has been participating in MPT study group meetings relating to technological convergence, particularly new digital broadcasting. Also, the company has held trials of the possibilities of technological convergence (by using an existing NTT emergency communications satellite), thereby proving that the possibility definitely exists in Japan. "Not only for the convergence of computer, telecommunications, and broadcast technologies - I would like to help stimulate the Japanese government and industry for healthy growth of new business models in the global society," proclaims Furukawa.

Whether data-multiplexed broadcasting can succeed as a future business model will ultimately depend on how those in the relevant industries perceive the future of the technological convergence. Many believe the service has great potential for further expansion and innovation. Furthermore, depending on the manner in which the technologies are developed, data-multiplexed broadcasting could well have broader implications and affect the types of business opportunities available in the next century.

The difference between the two systems lies in how viewers can access the received webpage formation. ADAMS is an "on-demand" service [while] Bitcast provides a "real-time" service.

TV Tokyo started services using the IT Vision method last year. Viewers of the IT Vision data (which so far includes supplementary information for sport programs and questionnaires for market research) can send their feedback to the broadcaster by using an NTT line through the IT Vision architecture TV's built-in modem.

Toshiba and NTT have invested in Wink. "We aren't concerned about either Bitcast or ADAMS; they will fail sooner or later," predicts Kensuke Adachi, general manager at Toshiba's advanced imaging technology division. "Basically, we don't think the Internet and broadcasting can be well combined at this moment; the target users are quite different. TV targets couch potatoes, while the Internet targets people who sit in front of a computer. Therefore, we are skeptical about whether people will pay extra to buy such TV/PC products - as has been proved by poor sales of Internet TVs. Our IT Vision system, on the contrary, can effectively combine broadcasting and telecommunications at very low cost."

So far, Toshiba is the only company with products for the IT Vision service. Matsushita Electric Industrial, which helped develop the ADAMS system, however, is also planning to release a TV set with IT Vision architecture.