TV's Next Generation

FOR many weeks we have heard the sounds of American industry and government preparing for battle with the Japanese over HDTV. HDTV - or High Definition Television - was developed in Japan. With a television image the shape and quality of a cinematic movie, HDTV is likely to dominate consumer electronics for years. Because HDTV makes extensive use of microprocessors, its position in the consumer market will also significantly affect the semiconductor industry.

Accordingly, American electronics companies have lobbied vigorously in Congress, the Executive Branch, and the press. They want to keep the Japanese-developed HDTV system out of the United States in favor of a yet-to-be determined American system. Their efforts have met considerable success.

There is a peculiar thing about this battle, however, that no one seems to have noticed. All the sound and fury comes from only one side of the field. The Japanese have not engaged in any US lobbying or public relations. They have made no US sales effort to speak of.

The reason for Japan's reticence can be discerned from a recent release by the well-connected Japanese press agency, Jiji. The Ministry of International Trade and Industry (MITI), the release notes, is concerned that HDTV will become another source of friction between Japan and the US. MITI wields enormous influence even over private business with respect to trade matters.

MITI's position almost certainly means Japan will not push export of HDTV to the US. Thus it appears that opponents of the Japanese system have won even before the battle has begun. But is this really a victory for the US? US electronics companies point to the VCR as an example of what could happen with HDTV. Yet the first home VCR was introduced by a US company, Ampex. Ampex dropped ``Instavideo'' two years later because the system was losing money. If the Japanese had not followed with their own version of the VCR, widespread distribution of the VCR in the US would have been delayed, or perhaps never achieved.

Japan's apparent withdrawal here could lead to precisely those results with respect to HDTV. The only remaining American manufacturer of television sets is Zenith. Every other manufacturer has either abandoned the market or been sold to foreign interests. The reasons cited in every case were low operating margins and the cost of R&D. Low margins and high R&D costs are, however, characteristic of the consumer electronics business. As long as American companies remain fixated by short-term profits they cannot be serious players in the consumer electronics game.

That is particularly true of HDTV. The Japanese are reputed to have spent $700 million developing HDTV. The American response? Zenith announced with much fanfare its proposal for a US standard HDTV system. It said, however, that it did not have money for the necessary R&D.

Recently, a consortium of giant American electronics companies including IBM and Digital Equipment Corp. was formed to look into HDTV. Each member contributed $5,000 for a business plan to be presented to venture capitalists. If that is the best IBM and DEC can do, the US will go nowhere with HDTV.

Delay or loss of HDTV would disadvantage the US. American consumers will be denied access to a vastly superior video technology, and US industry will suffer. Many Japanese televisions are actually manufactured in the US, including sets sold in Japan. Many components of those sets are made by US companies. Other US companies will lose huge potential markets.

The potential loss to the US is much deeper still. When Ampex gave up on the VCR, the US lost the opportunity to participate in further development of that product. If the US now attempts to develop its own HDTV system and that attempt fails, the HDTV equipment we ultimately use will again be all-Japanese or all-European. We will again have lost the opportunity to participate.

That opportunity does still exist. The Japanese HDTV system is a very good system, but like all new technologies it can be developed much further.

If we are serious about developing a new HDTV system, we are about to spend hundreds of millions of dollars merely to duplicate work already done in Japan. Why not instead propose to spend just part of that money in a joint effort with the Japanese to develop their system further? In return for Japanese access to our market, US companies would receive a fair opportunity to participate in HDTV manufacturing. This would be true of equipment sold in both countries, especially semiconductor components.

As MITI's actions reflect, the Japanese are sensitive to our trade concerns. Chances are they would welcome an opportunity to ease our trade problems, while also opening up our market for their HDTV products. We live in a global economy. Making HDTV a joint project with Japan would recognize that fundamental reality. It would also allow us to participate in HDTV in a meaningful way, an opportunity that may be lost if we persist in the direction we are now charting.

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