Compression: key element for future television.

Digital video compression is now all the rage. A technology that existed for over a decade, and was used in teleconferencing to save transponders time, turned out to be the locomotive spearheading a communication superhighway.

To be effective, though, video compression had to be married to digital technology. The result, not totally unexpected, is a TV revolution.

American networks, such as CBS, are heavily involved with research in these fields. But NBC has recently suspended its 10-year study program on digital technology to concentrate on developments that can bring "profits in a two-year period."

Conversely, Canadian cable TV companies are expected to invest $7 billion in digital compression alone by the year 2000.

Digital television will open many new forms of video services, but it is video compression that will allow the practical use of addressability (interactive TV), HDTV, video on demand and the creation of new ancillary markets (i.e. virtual reality games). These are in addition to long-distance video phones. Indeed, in Britan, cable companies and phone utilities have joined to provide TV services. Digital compression will allow a 60-channel cable system to carry 300 video programs without the help of optical fibers. Plus, it will make DTH (satellite) TV service more competitive with cable and it is bringing HDTV tape recorders into the homes.

The question is how digital compressed video will enter the consumer's home and in which form. The logical answer seems to be through the use of a "black box" at the viewer's end. This, however, will take place in the second phase of a two-phase program. In its initial phase, video compression will stop at the cable's head-end. Cable TV systems will convert the programmers' multiple signals into analog video information and pipe it into available channels. During the second phase, when costs of video compression decoders are low, they will be sold or rented to cable or satellite subscribers.

At that stage, cable systems, satellite TV operators and conventional over-the-air TV stations will be able to provide, if not the famous 500-channel universe, at least a total of 300 programs.

"There's just no future in conventional television," Mario Bertrand, chairman of Canada's Tele-Metropole, is quoted as saying. Indeed, many over-the-air broadcast TV stations, like Tele-Metropole, are now looking at interactive television and video compression. And all this is imminent. When Times Warner, in the words of its CEO Jerry Levin, put out bids for the development of an electronic highway, some 80 companies responded.

It seems that another group of seven sisters is going to dominate global communications - studios, TV networks, cable companies, Telcos, computer companies, consumer electronic companies and publishers - or it could well be that all these companies will develop a form of compression of their own a la Time Warner.