Is the time right for telcos to focus on 3DTV?

Three-dimensional TV technology had one of its highest-profile tests this weekend as Comcast (and other cable TV providers working with Comcast’s feed) offered a live 3D broadcast for portions of The Masters golf tournament.

It’s not yet clear how many people actually watched the 3D broadcast, and most of the glowing reviews thus far are coming from people who watched the event at media viewing parties hosted by Comcast or the PGA. Still, coverage of golf’s premiere event likely will only enhance and further extend 3DTV’s now three-month-old grip on consumer awareness.

Since January’s 2010 Consumer Electronics Show in Las Vegas in January, and helped by an ongoing string of 3D theater movies including James Cameron’s Avatar, the potential for 3DTV to succeed HD as TV’s next premium viewing experience has stirred service providers into action. Comcast’s Masters coverage is just one example. U.K. satellite TV giant BSkyB has started supporting 3DTV, and U.S. satellite firm DirecTV has committed to launch 3DTV content this summer. Verizon Communications said on its Verizon at Home blog that it is working on a plan to make 3DTV available by the end of this year, and AT&T reportedly has been looking at 3DTV in a lab setting.

Already this week at the 2010 National Association of Broadcasters show in Las Vegas, the activity is increasing: Level 3 Communications partnered with Microsoft to demonstrate 3DTV over Level 3’s content delivery network to PCs and TVs via Microsoft Silverlight playback. Also, Motorola announced 3DTV processing capability for its DCX line of cable TV set-top boxes which lessens the requirement for consumers to manually adjust TV settings to “turn on” 3D.

Verizon’s recent 3D news came off as a reflex response to and a swipe at Comcast’s well-publicized Masters broadcast, though 3DTV was on the mind of Verizon Communications CTO Mark Wegleitner at least three years ago. In any case, it’s still early for service providers to be staking claims on consumer mindshare, said Vince Vittore, principal analyst for enabling technologies at The Yankee Group. “I don't think there is much pressure at this point [on service providers],” he said. “We've just gone through a five-year cycle of consumers replacing their traditional TVs with HDTV so we're not anticipating a mass rush for consumers to want to upgrade to 3DTV.”

Jonathan Hurd, director at Altman, Vilandrie & Co., added service providers should not feel the need to conduct high-profile Masters-like showings of the new technology either. “As the year goes on consumer awareness of 3DTV will explode,” he said. “All of the major display manufacturers are rolling out 3DTVs to the public and spending millions on marketing and on channel sponsorships. Although content will come slowly, ESPN, Discovery, Disney, SONY, and others have announced 3D channels.”

Zpryme Research and Consulting collected data on the Internet buzz about 3DTV as it surged around and after CES, and Mark Ishac, managing director of Zpryme, agreed that TV manufacturers and programmers are doing more initial promotional legwork than service providers, and will lead the way. “Somebody has to set the tone and lead the market, and I think you have seen that from companies like LG and CBS [the TV maker underwrote CBS’s 3D broadcast of last week’s so-called instant classic NCAA Championship game to 55 movie theaters around the country],” Ishac said. “That’s aggressive behavior for a market still in its infancy, but that behavior will drive 3DTV sales.” Ishac also noted that ESPN is among programmers that have conducted 3DTV focus groups seeking consumer feedback on the technology.

The recent proximity of the HD transition, mentioned by Vittore, as well as 3DTV prices—around $3,000 for some new sets—and concerns about the quality of 3D glasses, have been among the lingering concerns that could vex the 3DTV evolution in the early going. However, according to Zpryme’s own research, perceptions may be changing fast. “From the onset, we saw people saying, ‘I’d never want to wear those glasses,’ but that has changed now to, ‘I know the glasses aren’t perfect, but they’re good enough, and I know the technology will evolve,” Ishac said. “On pricing, people first said they wouldn’t pay 10 percent to 20 percent more for a 3DTV, but now we’re seeing more comments that suggest they won’t mind.”

Ultimately, those are not the issues service providers need to worry about so much as just having their networks ready to support 3D streams. Questions about the viability of 3DTV have puzzled AV&Co.’s Hurd recently, and while he doesn’t think service providers should worry about priming consumer awareness, he said it’s still a good idea to start working on network support plans.

“It’s important for service providers to meet the needs of early adopters of new video technologies like HD and 3D,” he said. “Those consumers spend more per month on video and broadband services, and in some cases can represent two-to-three-times the economic value of average customers. 3D is an opportunity for a service provider to attract and retain those valuable customers. A service provider without 3D will risk losing those most valuable customers to one who does.”

Analyst opinions vary about the bandwidth consumption of 3DTV on the network, and depending on the compression used, it could be equal to that of an HD channel (up to around 8 Mbps), or somewhat more than that. Service providers can offer 3DTV via MPEG-2 or MPEG-4, and if they use current 2D Plus Depth, the bandwidth consumption is likely to be very close to current HD, but if Multi-View Coding is used to achieve higher video quality, the bandwidth consumption could be higher.

“It’s important to do the experiment, but don’t approach it as an experiment to decide whether to do 3D or not,” Hurd said. “It’s an experiment to make sure you know what you have to fix in order to launch the service.”