NextGen Rollout Challenged By Spectrum Constraints
The “NextGen TV” rollout has gone fairly quickly in the roughly five years since the ATSC 3.0 next-generation broadcast standard was formally approved by the FCC. Fifty-six markets are on-air with NextGenTV signals and 15 more are slated to launch by the end of the year including top 10 DMA Boston. And four major consumer electronics manufacturers — Sony, Samsung, LG and Hisense — are now making NextGen TV sets, with more than 100 models available and some 4.5 million sets projected to be sold this year, according to the Consumer Technology Assocation (CTA).
But over the same time period streaming video has exploded for broadcasters in the form of free advertiser-supported streaming TV (FAST) channels, first with national offerings from major networks and more recently with regional and local services being launched by station groups. And the early consumer experience of NextGen TV has been hampered by government regulations that make it hard to differentiate the new services from the legacy ATSC 1.0 programming already delivered over-the-air, according to broadcasters speaking yesterday at TVNewsCheck’s TV2025 conference in New York.
Broadcasters’ biggest bone of contention is the FCC requirement for stations launching 3.0 to not only simulcast their primary programming stream in 1.0 but for the programming to be “substantially similar” through July 2023, even though they haven’t received any new spectrum for 3.0. So to launch 3.0 in a market, broadcasters are reaching channel-sharing agreements that cram multiple 3.0 program streams onto one (or two) “lighthouse” stations. The deals also find new homes for the lighthouse station’s displaced 1.0 programming, including multiple diginets, on “host” stations in the market.
“Even in markets that are lit up, about 75% of the bandwidth is actually on 1.0, because there are only one or two lighthouses in the market that actually get to do 3.0,” noted ATSC President Madeleine Noland, who spoke on the panel “NextGen TV, Streaming and the Future of Local Media” moderated by this reporter.
Capacity is tight for both the 3.0 and 1.0 broadcasts, and broadcasters are aggressively using video compression to make it all work. That means that they can’t increase the data rate of the 3.0 streams to offer dramatically improved pictures, such as 4K HDR, or even make the signal significantly easier to receive through more robust modulation schemes. The end result is the same programming in 1080p HDR that may not look very different from the 720p or 1080i content customers are already getting in 1.0, said Kerry Oslund, VP of strategy and business development for E.W. Scripps.
Oslund asked the audience how many people had NextGen TV sets currently receiving 3.0 signals, and a smattering of hands went up [New York is one of several big markets where 3.0 is not yet on-air].
“That’s one of the things we’re really concerned about,” Oslund said. “Right now, you know if you turn on your 3.0 TV set you get generally the same thing as if you were watching 1.0. And that’s not how you differentiate the experience. That bothers us and it makes us nervous. Because when a 3.0 customer goes to watch 3.0 television, we want them to see a differentiated experience beyond just better pictures and better sound, which it will have. But in a lot of ways that’s like a steering wheel and brakes on a car — you expect that.”
Oslund said that Scripps and other broadcasters would like to offer different programming in 3.0, perhaps with interactive enhancements, to make buying a new set a more compelling proposition.
Anne Schelle, managing director of the Pearl TV consortium of which Scripps is a member, also would like to see the “substantially similar” rule lift.
“I do understand the reasoning behind that, but we do feel like we need to be able to showcase content to get consumers excited to come over to NextGen,” Schelle said.
Another way the FCC could help the 3.0 rollout, she said, is to expedite a proceeding on the rules for how multicast [diginet] channels could be carried in 1.0 and 3.0, a rulemaking process that started back in November 2020. That would make it easier for broadcasters to juggle the multitude of program streams in large markets, a task at which she said they’ve done an “amazing” job so far.
“We’ve preserved every diginet and every main channel out there, and we’ve worked closely with the cable companies,” said Schelle. “In fact, they participate in every transition we do. That’s all to ensure that the consumer already watching ATSC 1.0 is not impacted at all — that’s our bread and butter.
“But by the same token, we need help,” she continued. “We need help in terms of some of these tougher markets, to have more flexibility in how we move around the diginets and the mains. That’s number one. That proceeding has been sitting there for a long time and it would be great if they could move that along.”
Oslund also addressed concerns about privacy and data collection via 3.0 sets that were raised in a speech earlier this week by FCC Commissioner Geoffrey Starks. Speaking at Penn Law on Tuesday, Starks touted 3.0’s various benefits but also said “we must set proper guardrails” when it came to data collection for targeted advertising, particularly geographic location information.
Oslund countered that geographic location data could provide great benefit to the public during emergencies, such as when Hurricane Ian lashed Fort Myers, Fla., earlier this month.
“We want to have enough data so that NextGen TV and enhanced emergency alerting services can help a consumer with a customized evacuation route from their home, their street, their neighborhood, to where they need to go to be safe,” Oslund said. “Some people talk about that same data and they think about it from an advertising perspective only. I can promise you this company is built on 140 years of trust and we’re not going to throw it away by abusing that trust by somehow reaching too far into the data quagmire. But we do want to have enough so we can enhance our emergency alerting and our community service aspects of what we do.”
Francesco Moretti, deputy CEO and CEO of international offices for Fincons Group, has already been working for the past 10 years with European broadcasters to pursue advanced advertising on connected TVs using the HbbTV broadcast standard. He said that privacy concerns there are addressed by consumers opting in to receive additional premium features from their providers in exchange for sharing data. He expects a similar model in the U.S.
Fincons helped Italian broadcaster Mediaset launch its first interactive advertising back in 2017, with a publishing overlay of targeted advertising for connected TVs. A year later Mediaset started dynamic ad replacement. For more than four years they’ve been able to get feedback from audiences on their preferences, behavior and expectations, Moretti said, which has helped them “transform and evolve the business model of advertising” combined with attribution.
Mediaset recently linked connected TVs with smartphones to create an attribution system that tracks the effectiveness of dynamic advertising insertion. During one week of an automotive campaign the linked TV/mobile system showed an increase of 18% in visits to dealers and an average visit of over an hour, a clear indication that consumers were spurred by the TV spots to go shopping.
“It’s a sort of win-win for both the broadcaster and the audience,” Moretti said. “Mediaset can create profiles of behavior and experience and track and understand exposure of the audience to a different campaign. And with the geolocation of the mobile it is able to understand during the week of the campaign how much the traffic to the store is increasing.”
Schelle said that such a dynamic advertising and attribution system could be supported in the U.S. today with NextGen TV, as the digital revenue models that broadcasters are currently using on their OTT or FAST channels are easily transferable. The “RUN3TV” WebTV application platform that Pearl TV has developed to run on NextGen TV sets uses the same server-side ad insertion (SSAI) model with client-side reporting prevalent in many existing IP content distribution scenarios. It will allow dynamic ads to be placed against interactive content such as VOD clips or localized newscasts that consumers can quickly access through the sets’ broadband connection.
“It’s really just bringing those models over in this Web environment,” Schelle said. “Everything you can do there, you can do on the live linear broadcast in the application environment.”
Pearl TV also announced at NAB New York that it has created a “FastTrack” program to speed the development and retail availability of low-cost upgrade accessory receivers for 3.0, such as HDMI peripherals for legacy TV sets and USB dongles for smartphones. Those devices would be in addition to the roughly 55 million NextGen-capable sets that CTA projects could be in U.S. households by 2024.
“You take the projection of over-the-air households at 18%, and you have a 10 million [set] base audience that you can reach, which gets very meaningful for advertisers,” Schelle said. “Right now, what’s important is to enable the Web features.”
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