Digital Television and Breakthrough Innovation
Authors: Dias dos Reis Samira 
Published: May 2011

As new technologies continue to emerge, firms in diverse industries increasingly must respond. Future economic rents and competitive advantage rests on the organizational ability to assimilate new technologies in the right manner. Broadcasters, content and service providers, packaging providers, and many other firms have been affected by the advent of digital technologies in the digital television (DTV) industry. All these firms have considered the adoption of digital technologies. Digital television is a new television service representing the most significant development in television technology since the advent of color television in the 1950s (Kruger, 2005). DTV can provide several benefits: sharper pictures, a wider screen, CD-quality sound, better color rendition, integration with Web technologies, increased programming options, easy integration between broadcasting networks and broadband telecommunication networks (e.g., B-ISDN—Integrated Services Digital Network), and other new services currently being developed. The nationwide deployment of digital television is a complex and multifaceted enterprise though. It has a profound impact on the entire TV system: from the offer typologies to the consumption manners. Therefore, a successful deployment requires the development by content providers of compelling digital programming; the delivery of digital signals to consumers by broadcast television stations, as well as cable and satellite television systems; and the widespread purchase and adoption by consumers of digital television equipment (Kruger, 2005). In sum, the advent of the digital television has caused an actual breakthrough innovation on almost all levels of the value chain. Although the adoption of breakthrough innovations is highly risky to pursue, research has shown that firms always follow them (Charitou & Markides, 2003; Ketchen, Snow, & Hoover, 2004). In the case of the television industry, the adoption also happens because the government and the telecommunication regulatory agencies in many countries have foreseen deadlines for the complete transition from analog to digital technologies in this industry. Despite lingering standardization issues, digital transmission is replacing analog transmission in the three major delivery platforms (terrestrial, cable, and direct broadcast satellite [DBS]) (Galperin & Bar, 2002). Therefore, in the future we expect that all firms in this industry will have adopted these digital technologies. Furthermore, this adoption will vary according to both the firm’s activities and the type of breakthrough innovation. This research will present some theoretical arguments to describe the adoption of the digital technology by two different activities in the digital TV industry: TV channels and content providers. These two different types of firms were chosen because the emergence of the digital TV has meant the adoption of different types of breakthrough innovation for each one of them. The next section defines these different types of breakthrough innovation. The two following sections describe the two cases of the adoption of DTV: by TV channel and by content provider. Finally, the last section presents the conclusion and implications of this research.