Ryvicker, Amy, Sook All Gung Ho For 3.0

The proposed next-gen TV standard is endorsed by Wells Fargo securities analyst Marci Ryvicker and her S&P Global panelists: Sinclair's David Amy and Nexstar's Perry Sook. Said Ryvicker: "For me, I only see it as a good thing. I can't put a cash flow on it. I can't put a multiple on it. I just know it's better than staying at 1.0."  Amy: "It will forever change the way viewers consume our product." Sook said he was especially interested in the potential for datacasting.

Wells Fargo securities analyst Marci Ryvicker, who closely tracks the financial fortunes of the publicly traded station groups, says they have no choice but to implement the new ATSC 3.0 broadcast standard

“To stay at 1.0 is not good,” she said at the S&P Global TV & Radio Finance Summit in New York. “That puts you at a complete disadvantage.”

Once the 3.0 transmitter is up and running, she said, “you have to put your faith in the management teams to figure out what the best business proposition is.

“For me, I only see it as a good thing. I can’t figure out what the absolute opportunity is. I can’t put a cash flow on it. I can’t put a multiple on it. I just know it’s better than staying at 1.0.”

ATSC 1.0 is the current broadcast standard.

Ryvicker’s remarks came at the end of an hour-long session she moderated featuring three top broadcast executives — David Amy, EVP-COO of Sinclair Broadcast Group; Perry Sook, CEO of Nexstar Broadcasting Group; and Kevin Latek, EVP, business affairs of Gray Television.

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While her 3.0 advocacy was forceful, it was hardly needed. Sinclair has been the leader in advancing 3.0 and Nexstar has also been a strong proponent.

The opportunities are “fantastic,” Amy said. It “will forever change the way viewers consume our product.”

It enables 4K picture resolution, targeted advertising, pay TV, interactive TV and data distribution, he said.

“Then, we will have the benefit by being able to provide a robust and reliable mobile service to every mobile device out there — something we simply cannot do today.”

Targeted advertising will allow broadcasters to drive CPM pricing, he said. “It will be a significant increase, not just a few percentages. It will be three or four times, potentially.”

During the transition, broadcasters plan to simulcast a 1.0 signal along with the 3.0 signal. “That’s very important to us because of the retrans revenue we receive from it. We are not going to shoot ourselves in the foot and destroy that income.”

Amy said he expected the FCC to approve use of 3.0 on a voluntary basis late this year or early next. “So you will start to see us putting our business plans together and how we are going to take advantage of the spectrum sometime beginning next year.”

Sook said that he wasn’t enthusiastic about 4K until he saw a demo at the Masters in April. It’s obviously a better picture, he said. “Our job is to always make the experience better for the viewer.”

And he said he was especially interested in datacasting. Several broadcast groups could get together, create a national footprint and offer a national data delivery service. “That’s a revenue stream that doesn’t exist today that could dwarf some of our other revenue streams.”

Sook said broadcasters are just beginning to focus on 3.0 and that momentum should build after the incentive auction. Many broadcasters will enjoy a windfall from selling spectrum, and with that money, “we can talk about how to fund the transition [to 3.0] and move forward.”

The session touched on broadband distribution of broadcast signals, but neither Sook nor Amy were particularly enthusiastic about it.

Sook said he has a year’s experience with CBS All Access, a pay service comprising the local CBS station and on-demand CBS programming, past and present. CBS affiliates get a small share of the $5.99 a month CBS charges for the service.

True, Sook said, subscribership and revenue have grown, but not to a level where it is making a material difference to Nexstar.  “We believe it is additive and incremental. We also believe that the quarterly check [from CBS] might buy everybody in the room lunch as long as we didn’t order a good bottle of wine.”

Amy seconded Sook’s comments. The service generates a little revenue and it does no harm, he said. “We think they are capturing, generally, viewers who are not cable or satellite subs so we would not be getting paid retrans anyway from those folks. They are new customers in that regard.”

In an earlier appearance at the conference, NAB President Gordon Smith said that 3.0 enjoys the support of a powerful coalition — the NAB, public TV, the public safety community and the consumer electronics industry.

He said that the FCC should approve 3.0 because it fits with its policy goals. For FCC Chairman Tom Wheeler, it’s all about “competition, competition, competition,” he said. “One of the ways to foster competition is to keep broadcasting strong.”

What’s more, broadcasting benefits all by handling the delivery of television and freeing up wireless spectrum for other uses, he said. “If more and more television is done through streaming, there will be a traffic jam out there that is unsolvable under the laws of physics.”


Comments (16)

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Amneris Vargas says:

June 16, 2016 at 7:00 am

Nexstar, SInclair and Gray as TV’s new spokesmodels. Welcome to the new normal.

    Linda Stewart says:

    June 16, 2016 at 10:26 am

    Who would you prefer to speak for stations? Iger, Moonves and Burke?

    Wagner Pereira says:

    June 16, 2016 at 10:29 am

    If the Industry had listened to Sinclair 15 years ago, we would not have this crappy 8VSB issue with ATSC 1.0. The Industry should listen to Sinclair on these issues – as they have proven themselves (and put their money where their mouth is).

    Amneris Vargas says:

    June 16, 2016 at 11:58 am

    Not at all. It just feels different than Tegna, Hearst, Media General. And, I am in 100% agreement with Grayclairstar’s opinons on 3 and OTT scraps.

    John Avellino says:

    June 16, 2016 at 1:04 pm

    SInclair is pushing 3.0 to save Face -and to stay relevant because thats all they got. Stinkbak that made the Awful CBS all access app missed the mark by a long shot and from the words of Sook is pretty much irrelevant. – If these TV Neutrality Alliance guys can move the needle on the OVD – to MVPD ruling then all these station groups will get a brand new revenue stream. This could essentially be deployed manana….Or we wait and we wait and when the device manufacturers don’t get on board the ATSC 3.0 train then its dead on arrival fellas.

    Ellen Samrock says:

    June 16, 2016 at 3:38 pm

    And, of course, some of Sinclair’s technology is going into 3.0. A nice, fat royalty stream will ensue once the standard is adopted and in place.

    Wagner Pereira says:

    June 16, 2016 at 9:00 pm

    And since they put time and money into it, seems only right. Of course, they also purchased an Antenna Company which was a God send. But then again, they do operate FOR PROFIT.

    VEON MYNATT says:

    June 17, 2016 at 4:37 pm

    touche’

Tony Alexander says:

June 16, 2016 at 12:02 pm

Wheee!!! It’s like 1999-2001 all over again!!!!
Harry: you should do a story on the success of voluntary technical standards for TV broadcasting, like: Color, teletext, MTS. I think if you check, you’ll find that it took about 10 years for color to happen, teletext died completely, MTS took about 8 years or so.
Even with a government standard, ATSC 1.0 was established as a standard in 1996 and broadcasters not “forced” to convert until 2009.
Biggest benefits of ATSC 1.0: better picture quality and the creation of “diginets”…more channels of video.
Biggest benefits of ATSC 3.0: better picture quality (4K) and better reception.
By comparison (in cellular), AMPS started in about 1983, D-AMPS (TDMA) started in about 1993, and then to 3G, 4G, 4G LTE and soon 5G basically in the time span of getting ATSC 1.0 up and running. Broadcasting standards are far more difficult to implement and certainly more difficult to do in a short period of time.
It is just amazing to me that a broadcast executive in 2016 thinks that ATSC 3.0 is going to magically create a datacasting business for broadcasters. It’s not about the technology, it’s about the business. In 1999 broadband was a scarce resource; today it is a commodity.
There’s far more money to be made by broadcasters in using data for programmatic ad sales and placement than trying to compete with telecom/cable companies on data delivery.

    John Avellino says:

    June 16, 2016 at 1:10 pm

    FINALLY – somebody who just gets it around here. Nice Post BB. You need to check out the TV Neutrality Alliance FCC filing as well. I think it solves a lot of problems for everybody. I Guess nothing relevant was said by Kevin Latek from Gray I don’t see a quote from him in the article but I guess with this panel he would of been pretty underwhelming, not sure why he was even on this panel with the executives of this caliber.

    Linda Stewart says:

    June 16, 2016 at 2:30 pm

    And let’s not forget AM stereo. Good suggestion.

    Ellen Samrock says:

    June 16, 2016 at 7:11 pm

    These are false equivalencies. ATSC 3.0 is not an enhancement to an existing system like color, stereo or captioning was to NTSC. And to minimize it by just saying that it provides 4K and better reception is to miss the point. 3.0 represents a totally new set of extensible technologies for broadcasting that carries with it the potential for a totally new business model–one beyond just streaming entertainment and selling advertising. It’s not, of itself, a business plan or an out-of-the-box solution for a new business. It’s basically a new set of tools that can open up new possibilities for broadcast television. What those possibilities will be we’ll have to wait to find out.

r small says:

June 16, 2016 at 1:27 pm

Oh, please. Let’s not discuss COFDM vs 8VSB again.

Don Thompson says:

June 16, 2016 at 7:54 pm

ATSC 3.0 — that’s @nabtweets shorthand for “fleecing of U.S. taxpayers” just a few years away. Please follow me on Twitter: @TedatACA

    Wagner Pereira says:

    June 16, 2016 at 9:02 pm

    Keep pounding the BS. Only fleecing to be done is when Wireless Data Companies start charging you for the same Frequencies you use to receive for free.

Greg Johnson says:

June 16, 2016 at 8:17 pm

Once the 3.0 transmitter is up and running, she said, “you have to put your faith in the management teams to figure out what the best business proposition is. There is no track record of developing scalable programming from any of these groups. Broadcasting once again forgets what the customers want. By the time this conversation is concluded, Facebook will have a 50 share of local news in Baltimore. Distribution isn’t the problem. Perry will be watching 8K at the Masters before you know it. omg!


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