Well, it isn’t going away.

According to the recent Consumer Electronics Association summit in Washington, DC, this year marks the tipping point in television’s transition from analog to digital.

In 2002, the dollar volume of consumer spending on digital TV technology in the U.S. surpassed analog sales. Overall, consumers south of the border are on track to hit US$10 billion in digital TV spending for the 1999-2003 period.

Here in Canada, we’re probably 18 to 36 months behind the American market. Strategically, the fact that we’re not on the bleeding edge of this mammoth transition should help us – but only if we pay acute attention what’s happening in the U.S.

There’s no doubt about it: the prognosis for analog technology is terminal. Some U.S. broadcasters, in fact, have been reduced to buying replacement analog components on eBay. However, there remain a lot of lingering questions around digital TV.

Copyright is one of the biggest. The Federal Communications Commission in the U.S. is now wrestling with Hollywood’s proposed ‘Broadcast Flag,’ a measure designed to prevent the digital stealing of movies and television shows.

According to the Motion Picture Association of America, consumers are downloading and file-swapping as many as 600,000 films on the Internet for free every day. Needless to say, this drives MPAA chairman Jack Valenti and his colleagues buggy. And their concerns could slow the adoption of digital TV.

It also remains to be seen how digital TV technology will jibe with current programming trends. Reality shows are not considered compatible with the world of high-definition television, because they hold little syndication value. And yet some 35 to 40 new programs in this genre will be aimed at primetime viewers in the fall.

All that said, a total of 2.7 million digital units were sold to consumers in the U.S. last year, and projections now run to 9.7 million by 2006. Of U.S. digital TV sales in 2002, 85% involved HDTV technology. And pricing is on the way down, from an average of US$3,147 in 1998, to a predicted US$1,295 for the coming 2003/04 winter sales season.

Happily, the HDTV standards battles appear to be over. Nobody any longer gives a pinch whether it’s 1080i or 720p technology. Consumers just want better pictures and better sound. According to the CEA, roughly half of Americans are committed to their next TV set purchase being HDTV. Best Buy, which owns Canada’s Future Shop chain, is among the retailers pushing the technology at consumers.

In the U.S., the CEA and the National Cable & Telecommunications Association signed off on a ‘plug and play’ accord in December 2002, easing buyer anxieties about compatibility and use. In the wake of this deal, ESPN HD announced the launch of a 24-hour HDTV sports channel.

What remains to be seen is the true passion of broadcasters for embracing digital technology. Few promote HD as they did color a few decades ago, when the NBC peacock was a matter of pride. Indeed, CBS has said it will cease all HD programming if there is no resolution of the Broadcast Flag issue. But network enthusiasm may grow as the HD market swells.

The implications for Canada are familiar. What will happen to simultaneous substitution rules? How will we deal with identical signal requirements? Or with video-on-demand replacing pay per view? Will HD precipitate a shift away from the existing regulatory regime?

While CHUM has become the first Canadian broadcaster to bite the HD bullet, others may remain reluctant. But the consumer transition is clearly well underway in the U.S. – a marketplace, one should note, that comprises some 800 digital terrestrial channels in 150 cable markets. It would be poor judgment for Canada to risk becoming an analog archipelago in an American digital ocean.

Still, it won’t be easy to chart a course.

Canada has successfully launched its first new crop of diginets, and Canadian Digital Television is taking on the advocacy role in the transition. But we still need to take a hard look at some key issues. If the great leap forward in HD is powered by sports and movies (and possibly ‘appointment series’), what will that mean for our lower-budgeted films and television programs, for Canadian documentaries – and especially for this country’s not-for-profit, public or public service channels? Can they jump the digital hurdle?

Perhaps it’s time to think some bold ‘mixed economy’ funding thoughts, to help those broadcasters that deliver uniquely Canadian programming in their efforts to cope with the transition. Perhaps a portion of the GST collected on the sales of digital equipment, for example, could be earmarked to fund the transition of public and public-service channels to the digital realm.

Clearly, it’s important for Canada to be part of the digital marketplace of tomorrow. But isn’t it important also to create and sustain distinctive Canadian fare, to tell uniquely Canadian stories and to address particularly Canadian social concerns? Can’t we be consumers and citizens too?

-www.visiontv.ca