Stations Should Plan ATSC 3.0 Strategy Now

Financial executives and other television company personnel are intensely focused on addressing technical issues related to the repacking of broadcast television spectrum after the spectrum auction. From what I’m hearing, their planning bandwidth is just about tapped out. But it could be well worth the added effort to incorporate an upgrade to the new ATSC 3.0 standard into those plans.

As Paul A. Cicelski, an attorney with Lerman Senter, points out: “This new technical advancement will pay dividends for those that take the time to understand it, and its potential new uses and applications. Now is the time for broadcasters and their investors to diligently consider new business models and transition plans for migration to the new standard.”

Cicelski provided an overview of those potential dividends in an article entitled “Television’s New Rocket Fuel” appearing in the current issue of MFM’s The Financial Manager (TFM) magazine. Echoing a recent commentary by TVNewsCheck Editor Harry Jessell, Cicelski says: “The great thing about 3.0 is that it opens up all kinds of new business opportunities for broadcasters.”

Thoughtful scrutiny of these options now is what’s required. Cicelski notes, “They (broadcasters) cannot pursue them all because the spectrum that fuels them is limited and will become more so after the incentive auction.”

TV’s Counterpart To NextRadio

ATSC 3.0 appears to offer TV some of the same advantages that the radio industry enjoys with the NextRadio app for smartphones. NextRadio provides users with an experience that hearkens back to the days of pocket-size transistor radios but with much greater quality, the opportunity to stream additional content on demand, and it uses less than 20% of the data required for streaming radio via the Internet. Listeners can also opt for a data-free experience via the app’s Tuner Only Mode.

When it comes to watching broadcast television via a smartphone, Cicelski asks readers to imagine what would happen if the majority of residents in a market wanted to stream a live event such as the Super Bowl. While 3.0 would allow users to access the same ubiquitous broadcast signal that reaches TV set antennas, having millions of viewers in the same market simultaneously stream the live event to their mobile devices via the Internet would cripple the wireless network, not to mention the buffering delays and data costs.

NextRadio’s rollout required, and continues to require, collaboration with the consumer electronics industry and wireless carriers. It took a while, but the service is now available on more than 67 smartphone models that come with a built-in tuner. Unfortunately, a number of the wireless carriers that profit from the data usage of streaming media have not taken steps to activate the FM chip in the smartphones they sell. It’s probably safe to assume that 3.0’s rollout will follow a similar path.

Examining The Potential

Of course, the chance to view broadcast television on a portable media device is not the “wow” factor for 3.0. If viewing on a tiny screen were optimal, we wouldn’t have abandoned our Sony Watchmans.

 Cicelski’s article lists the following advantages:

• It will deliver 4K ultra-high-definition (UHD) TV signals, with crisp “3D” audio tracks and an assortment of programs customized to the individual tastes of consumers. (Strategy Analytics predicts 11 million North American homes will already have UHDs by the end of this year growing to one-third of HHs by 2020.)

• The new ATSC 3.0 standard will allow more HD channels to fit into the same spectrum. In addition to Harry Jessell’s reminder that this capacity could be used for more robust “wireless cable” offerings, the added capacity will support channel-sharing with UHF broadcasters displaced by the spectrum repack.

• Because it’s IP-based, the standard can support two-way IP communications between broadcasters and consumers, including the conditional access and DRM systems required for delivering premium content.

• Broadcasters can also use part of the 3.0 spectrum for wholesaling data capacity to wireless providers, allowing them to offload Internet and mobile video traffic from already congested cellular networks.

• ATSC 3.0’s SFN (single frequency network) capability can strengthen a station’s market coverage by sending the same signal to multiple transmitters.

• With 3.0, broadcasters can participate in the automotive connectivity market by offering newer and cheaper services to vehicle manufacturers.

• The new standard would allow stations to offer advertising targeted to specific viewers, based on demographics, economic classifications, and behavioral traits.

• It will also allow advertisers to transmit customized messages to specific geographic locations within a station’s market.

• Broadcasters will be able to transmit content in multiple languages and provide enhanced closed captioning and other services for the visually and hearing impaired using the same signal.

• ATSC 3.0 can provide highly advanced emergency alerting, such as Advanced Warning and Response Network, and other public service capabilities.

• In addition, 3.0 signals can deliver critical information in rich media formats — including video, still photos, radar images and plume models — and can even cause a powered off device to “wake up” during emergencies.

The Groundwork Is Set

As this year’s NAB Show attendees can attest, the technical requirements for upgrading to 3.0 are falling into place. Field tests conducted by Sinclair, One Media and other partners have included operating a 3.0 single frequency network between TV stations in Washington and Baltimore. The test successfully demonstrated that the full range of next-generation capabilities of 3.0 can function in a real-world environment.

The goal of making 3.0 a universal standard is also progressing. Equipment manufacturers in South Korea have successfully demonstrated end-to-end transmission and reception of 4K UHD television and HD mobile television signals simultaneously in a single 6 MHz channel.

With the 2018 Winter Olympics occurring in Pyeongchang, Cicelski says Korean equipment manufacturers want to move ATSC 3.0 rapidly from the “candidate standard” to the “final standard” in order to take advantage of its superior video quality and interactive components.

He also believes the likelihood of commercial product deployment in time for the Winter Olympics in Korea will “provide added incentive for the Federal Communications Commission to adopt the ATSC 3.0 standard here in the U.S.”

While she didn’t reference watching the Olympic games in UHD, FCC Commissioner Mignon Clyburn told attendees at last week’s Media Finance Focus 2016 conference that she will evaluate the new standard from her “community, community, community” guidepost for public policy. Given this perspective casts a favorable light on innovations that help to ensure greater and easier access to a rich diversity of programming, there’s a lot for her to like about 3.0.

The standard was also a hot topic during a number of the conference’s advertising sessions. Scott Stansfield, whose company Centriply assists advertisers in reaching targeted consumers through cable and DBS, says they can’t wait to tap into 3.0’s geo-targeting and interactive marketing capabilities.   

In summing up 3.0’s revenue potential, Cicelski cited a recent study by the Pearl TV broadcast consortium that concluded the TV industry could generate an additional $12 billion to $20 billion annually by implementing the new standard.

“There’s no doubt about it: with the enhanced television 4K viewing experience and IP-based capabilities of the ATSC 3.0 standard, broadcast television will not only improve its signal quality and services, but become a more profitable business competitor for years to come.”

If you’d like to read more of Cicelski’s thought on how 3.0 will fuel broadcasting’s future, a digital copy of the May-June issue of TFM is available on the MFM website. We’ll also be discussing how 3.0 fits into the digital media advertising landscape in the recap of key learnings from the Media Finance Focus 2016 conference appearing in the July-August issue of our magazine.

In the meantime, we would welcome your thoughts about how MFM can help with your financial questions concerning the transition to ATSC 3.0. As Lerman Senter’s Paul Cicelski noted: now is the time.

Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.