Paul Gluckman

Sony this month will launch a massive ad, promotional and consumer education campaign to run through the Feb. Super Bowl selling season, aimed at easing rampant DTV confusion among consumers, senior Sony executives told our affiliate Consumer Electronics Daily. The effort will begin in print and on TV but expand broadly to media such as online ads and point of sale materials, Greg Gudorf, vp-mktg. in Sony’s Home Products Div., told us. Gudorf said “there’s a ton of confusion out there as to what digital TV is all about.” The campaign will offer practical advice on the best kind of equipment to buy, including the dos and don’ts of antennas and set-top boxes -- “all those questions that consumers have,” Gudorf said. Sony executives discussed the consumer education campaign with FCC Comr. Adelstein in a meeting last Thurs. It was disclosed in an ex parte filing at the Commission. A main purpose of the visit with Adelstein was to attest to the FCC that Sony was in “100% compliance” with the July 1 DTV tuner deadline on sets 36” and larger, said Sony Exec. Vp & Gen. Counsel Michael Williams, who led the Sony delegation. In the meeting, Sony also affirmed that by July 1 50% of the 25-36” sets it was shipping had DTV tuners built in, as required, Williams told us. “Our message was that Sony’s doing its part” to comply with the DTV tuner mandate, and that “we hope others will do it as well,” Williams said. Gudorf said Sony is “accelerating the development” of new “midsized” TV models “even faster than we had planned” because of the FCC’s recent decision to advance to March 2006 from July the deadline for all new 25-36” sets to have DTV tuners built in. “We feel very confident we're on target for the 100% in March,” he said.

Sirius has no independent knowledge of rumors that Howard Stern will be “taken off the air” in late Sept. by Infinity Bcstg., Sirius CEO Mel Karmazin told analysts Tues. in the company’s 2nd-quarter conference call. The comment was in response to analysts’ latest questions -- asked repeatedly of Sirius over the last year -- whether there was any prospect Stern would join Sirius sooner than his announced Jan. 2006 debut when his Infinity contract expires.

Broadcasters, in comments filed last week at the FCC, overwhelmingly hailed an FCC bid to move up the July 1, 2007, DTV tuner deadline to Dec. 31, 2006 at the latest. But CE interests said it’s too late in the product cycle to plan for a 2006 deadline, and the earlier date would disrupt 2006 holiday sales of DTV sets, not help as broadcasters claim.

Chipmaker ATI Technologies, in comments at the FCC on the Commission’s bid to speed the DTV tuner mandate deadlines to Dec. 31, 2006, didn’t comment specifically on the proposal. But ATI said components such as its Xilleon 240 DTV “reference design” chip should help reduce the retail price of DTV converter boxes to about $50 by fall 2006 “if substantial demand for such devices materializes through steps taken by the Commission or other means.” The Xilleon 240 incorporates all the functions of a DTV converter box in a single chip, ATI said. Assuming “historical price reductions and anticipated manufacturing volumes,” ATI said, the production cost of adding DTV functionality to a TV set will be less than $40 by fall 2006. Other chip producers such as Motorola and Zoran have offered similar cost projections. In considering an earlier deadline for the tuner mandate, the FCC also should study the time and cost burdens of CE makers’ redesigning existing engineering and manufacturing plans, “as well as the logistical, distribution and marketing hurdles that an earlier deadline would create,” ATI urged. But the company said it believes “all affected industries will address these issues in the most appropriate manner to ensure full compliance with the Commission’s mandate.”

TiVo urged the FCC Wed. to keep July 1, 2007, as the DTV tuner mandate deadline for all remaining sets. In comments on an FCC bid to move the deadline to Dec. 31, 2006, TiVo said it “fully supports the Commission’s efforts to expedite the DTV transition” and agrees on the need for a date certain by which all TV sets are capable of receiving over-the- air DTV signals. However, advancing the deadline 6 months “will have unintended consequences of significantly disrupting the market and causing economic hardships” to TiVo and other CE makers, the company said. Making Dec. 31, 2006, the new deadline will “exponentially compound the hardships” posed by a speedier deadline because it falls at the end of the holiday selling season, TiVo said. Typifying others in the CE industry, TiVo said it “experiences a significant increase in sales during the holiday season and therefore needs to ramp up its manufacturing output to ensure that a sufficient quantity of the product is available to meet the public demand.” During the holiday season, “the sales channel is full of TiVo’s products” as a result, it said. A Dec. 31, 2006, deadline “would throw a wrench” into TiVo’s manufacturing and shipping plans, it said. “It would require TiVo not only to cope with the unpredictable and increased holiday season demand, but at the same time attempt to coordinate the timing of sales of non-DTV tuner products and DTV tuner products during these busiest consumer buying months,” the company said. To avoid being saddled with non-DTV tuner inventory that can’t be sold after the deadline, TiVo would need to ship such products well before the deadline, “which is not feasible from a practical and business standpoint,” it told the Commission. More woes would result with substantial numbers of product returns historically made after the holiday season, TiVo said. Last year, about 25% of TiVo PVRs bought by consumers during the holiday season were returned after Dec. 31, the company said. With a Dec. 31, 2006, deadline, “TiVo would be prohibited from reselling the non-DTV tuner merchandise returned post-holidays and it would be forced to take a massive loss,” it said.

“Contrary to what you may have heard otherwise,” the role of U.S. companies in the development and production of DTV products “is quite significant,” CEA Pres. Gary Shapiro told the Senate Commerce Committee in a letter Fri.

Ahead of a Dec. 1 FCC deadline for a cable progress report on deployment of downloadable security for set-top boxes, Comcast told the Commission in an ex parte filing progress is being made in development of downloadable conditional access. Comcast, Motorola, Nagravision and Scientific-Atlanta representatives met July 15 with officials from the FCC’s Media Bureau and Office of Engineering & Technology, the filing said. “These companies all successfully demonstrated their ability to download their respective conditional access systems over a cable system to set-top boxes” not equipped with embedded security, the filing said. In the demonstrations, each used its own “differentiated” headend equipment to download “entitlement management messages” allowing customers access to “individually authorized” levels of service, Comcast said. “Additional work is in progress to enable conditional access systems to be downloaded to a variety of set-top boxes and to consumer electronics products in this manner,” it said. Under a March 17 Commission order, cable’s progress report must discuss the feasibility of downloadable security and a proposed “timeline for deployment.” If the report finds downloadable security feasible, cable must commit to deploy it in its own set-tops and those to be sold at retail, the order says. The report must determine whether such security can be realized by July 1, 2007, and if not, propose a new deadline.

Sen. Sununu (R-N.H.), at last week’s Senate Commerce Committee hearing on the DTV transition (CD July 13 p1), was among members urging industries to avoid using “the specter of consumer confusion” on a hard analog cutoff to push political and commercial agendas.

DTV converter set-top boxes have been “a real problem child,” plagued by “phenomenal” retail return rates, a key Funai executive told Consumer Electronics Daily. The executive, Bob Cannistraro, sales engineer at Funai’s U.S. subsidiary, blamed the problem on “a total lack of knowledge out there” about what DTV set-tops and antennas “are and aren’t supposed to do.”

Contrary to what many believe, the FCC does have “an enforcement plan in place” for compliance with the DTV tuner mandate, Alan Stillwell, assoc. chief of the Commission’s Office of Engineering & Technology, told our associated publication Consumer Electronics Daily. With Commission rejection of a CE industry petition to scrap the 50% compliance deadline on 25-36” sets, “we're going to continue that same plan -- probably a little more aggressively,” Stillwell said.