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Digital Commencement

We are nearing an auspicious occasion in all of our lives today.

Just as our college seniors around the country line up, preparing to walk across the stage to accept their diplomas, filled with pride, excitement and perhaps a wee bit of trepidation, we all line up too — virtually, digitally.  For we, America, are about to cross the stage of history on June 12, transitioning from the analog era to the digital age — turning our “dials” as the graduates turn the tassel on their graduation cap — and we should be just as proud as those college grads who spent the last four (or seven?) years working toward this day.

To some, the “digital transition” may have seemed daunting, like the world beyond college. But the reality is that the majority of people are already in great shape for this transition whether they know it or not.  If you still have a TV that is square with an antenna (rabbit ears or on your roof), and you do not have a new “converter box,” on top of your TV, then you need to go to a store to ask what to do.  The rest of you, who have rectangular TVs and/or set-top boxes or service from a cable, satellite or telco provider, need not worry.  For the most part, it’s that simple because service providers have been slowly transitioning you from analog to digital for awhile now.

Because of that slow transition, many people, like students who start working in their last semester of school, will not notice any difference on June 12 when they officially receive their diploma.  But that does not mean we should take the graduation date (and especially the event) lightly. This switchover is an amazing feat — a government-industry, private-public partnership that represents one of the greatest accomplishments in modern times and opens the door for new experiences and applications that we can only begin to imagine.

The digital transition represents a shift toward all consumers — not just the technically and financially elite — expecting more choice and better quality from their TVs.

First, and most obviously, the shift to digital transmission allows broadcasters to deliver more channels in the same amount of space. When the analog spectrum is freed up, they will be able to deliver several new channels (standard quality or high definition) of digital programming in the same space that was required for one analog channel. But the subtle repercussions of this changeover may be even more profound.

Let’s bring our metaphor and reality together in one example: Bill, a student graduating from college.  Bill was happy to have only his computer, no TV, when he was in college.  But he doesn’t want his computer to be his home entertainment center in his new apartment. Bill certainly is not going to want to buy some old TV that can’t receive a digital signal without a converter.  In fact, the one thing that is really going to make him want to switch from PC to TV is the dramatic difference between a regular TV signal and a HD signal. So Bill will buy an HDTV regardless of where he plans to get his entertainment.  Bill is not alone — last year, Frank N. Magid Associates found that the pending digital transition was causing an increasing number of young people (21 to 34 years old) to buy HDTV sets, even if they had no short-term plan to purchase HD service.  The same researchers found that of those who bought a HDTV in 2008, 41 percent hadn’t signed up for a subscription HD service. These people are buying with a plan for the future, knowing that the choices they have in terms of what to watch on that HDTV are expanding all the time.

Cable, satellite and telco service choices are getting better. The free choices are growing simultaneously.  Bill may be most pleased with the expansive choices through his service provider, including HD sports, while his girlfriend may choose to watch “30 Rock” for free on her PC while eating dinner, but then settle in for a night of high-def video games or “The Dark Knight” on Blu-ray HD on the big LCD screen.

In fact, recent Blu-ray sales data bears this out.  In the first quarter of 2009, stand-alone Blu-ray player sales saw an increase of 72 percent over the first quarter of 2008. Analysts predict that Blu-ray disc sales will double this year over last year. Even hardened Time Magazine film critic Richard Corliss said this year of Blu-ray: “It’s as though you had never seen a movie before.”  This experience is only made possible because of the digital transition — the shift to HD.

There are also an increasing number of TVs that connect directly to the Internet to receive streaming content, and set-top boxes and game platforms that make the TV again a central focus in the home — this time in high definition — bringing people together to be entertained. The combination of high-quality entertainment and high-speed networks will change our society in a dramatic fashion, and the digital transition, June 12, will be the date that the historians mark in history as the time that we left the old world behind.

So, on June 12, please join me in congratulating Bill on his graduation, and all of us on ours, and raise a glass to the digital transition for, at last, coming to pass and for opening up a world of high-definition possibilities we only glimpse today.

David Wertheimer is the CEO and executive director of the Entertainment Technology Center at USC.  The [email protected] looks at how entertainment technology creates new opportunities for consumers and brings companies together to enable change.