New Year, New Gadgets, And Maybe New Rules

By Frank Ahrens
Washington Post Staff Writer
Saturday, January 1, 2005

In 2005, there's a good chance you or someone you know will buy a digital television set and a satellite radio and purchase a movie at home using a remote control or laptop. In the newspapers (strike that -- on the Internet), you'll read more about radio and television indecency and may very well see the Supreme Court take the first step toward tossing out the federal regulations that have kept NBC from looking more like HBO.

Where 2004 saw Comcast Corp.'s attempted takeover of the Walt Disney Co., the Big Music merger between Sony Music Entertainment Inc. and BMG Entertainment, Edgar Bronfman Jr.'s purchase of Warner Music Group and NBC's purchase of Vivendi Universal's movie and television properties, no big media mergers are on the horizon for the coming year, other than the eventual purchase of troubled cable company Adelphia Communications Corp., possibly by Time Warner Inc.

This year's action will take place in the living room and courtroom, said a group of more than two dozen media, entertainment and technology executives, policymakers, commentators, public interest advocates and consultants informally surveyed by The Washington Post. Among the top technology and policy issues for 2005:

• Digital television: By the end of 2004, there were almost 10 million digital television sets in use in U.S. households, most of them high-definition televisions (HDTV). Seven million more will be shipped by the end of 2005, predicts the Consumer Electronics Association (CEA), the trade group of electronics makers.

Digital televisions enable local television stations to add channels and improve the picture and sound quality of broadcasts.

"The tipping point has already occurred for HDTV," said Gary Shapiro, CEA president. "Every major network is broadcasting in HDTV, and everybody who has ever experienced HDTV wants it."

Congress or the Federal Communications Commission is expected to set a date for the end of the transition from analog to digital broadcasts -- a date by which all over-the-air analog signals must cease, policymakers said.

Cable companies such as Comcast also like the digital conversion because they hope 2005 is the year that video on demand (VOD) catches on. VOD lets cable subscribers buy movies and programs when they want and adds another revenue stream to the cable industry, which has stopped adding customers as more viewers are switching to satellite services.

"Most consumers lack the awareness of VOD's existence," said Shari Anne Brill, a media buyer with Carat USA. "VOD will get a bigger push from cable systems."

More consumers will listen to digital radio in 2005, as well.

Pay satellite radio services offered by XM Satellite Radio Inc. and Sirius Satellite Radio Inc. passed the 3 million and 1 million subscription marks at the end of 2004, respectively, and both will angle for more talent along the lines of Howard Stern and Bob Edwards in 2005.

Regular broadcast radio will try to fight back by, like television, converting its signals from analog to digital, improving the sound quality of radio shows, adding channels and adding text to programming for consumers who buy new digital radios. The technology will enable stations to offer niche programming -- similar to WTOP's new Federal News Radio -- and charge for premium content.

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