BIA/Kelsey: 3.0 Will Drive Station Revenue

A new BIA/Kelsey report examines the conversion to the ATSC 3.0 standard from a business perspective, with emphasis on the effect on advertising revenue, television viewership and digital competition.  

An in-depth review of the commercial television broadcasting business by BIA/Kelsey indicates that the investment large and medium market stations are considering making in the ATSC 3.0 standard would be recouped within three years. 

The new report, The Business Case for ATSC 3.0, examines 3.0 from a business perspective by exploring the advantages this new standard will bring to the industry, in particular as it relates to ad revenue, television viewership and managing digital competition.

“ATSC 3.0 will change the business of broadcasting into a next generation wireless communications business,” said Mark Fratrik, chief economist and SVP, BIA/Kelsey. “This new technology will give Broadcasters the ability to pursue multiple new business models which will significantly diversify their current revenue mix.”

At the core of broadcasters’ 3.0 expectations is the ability to offer a new internet protocol (IP) platform to better satisfy the changing needs of consumers and advertisers. The paper examines the business objectives for the television broadcasting industry and its members around the ATSC 3.0 migration, which include:

• Maintaining or increasing viewership by offering superior service to their viewing audience, including the delivery of a higher quality experience, more programming options, and ongoing innovation to accommodate expected (and unexpected) abrupt and hard-to-predict changing viewing patterns.
• Raising advertising revenue through increased viewership, better ad targeting, dramatically expanded and more accurate viewership tracking, and a capability to better integrate multiplatform campaigns.
• Growing non-advertising revenue through the development of new IP-based broadcasting and non-broadcasting business models. As the business of television broadcasting morphs into a broader content distribution service, many new service offerings will evolve.

The report also covers concerns related to the 3.0 conversion, which include overall capital cost, providing uninterrupted service to their existing audience and determining the relevant time frame for transition.

“The biggest opportunities around the implementation of ATSC 3.0 are that it will give broadcasters a new opportunity to grow and address their major concerns like reversing recent local television station viewing trends,” Fratrik said.  “In our report, we present the business model for implementing ATSC 3.0 based upon our assumptions of the speed of introduction and acceptance by consumers, advertisers and other players in the media ecosystem and overall it’s quite positive for the vast majority of local television stations.”