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In a growing world of over-the-top bundles and on-demand streaming alternatives ATSC 3.0 is aimed at keeping broadcasters competitive by providing IP data transmission and enhanced multicasting on excess broadcast spectrum. The improved compression standard of ATSC 3.0's 6 MHz spectrum adds a datacasting element that opens new opportunities in advertising, programming and multiplatform options.
In addition, ATSC 3.0 has numerous benefits that will allow TV broadcasters to compete with digital counterparts. Some of those benefits include: immersive/interactive audio, distribution on a point-to-multipoint basis, 4K (Ultra HD) resolution, increased bandwidth for additional multicasting, ability to do video-on-demand and targeted/interactive advertising opportunities.
One of the most important aspects of ATSC 3.0 will be to enable broadcasters to compete with digital in the ad revenue space. The IP-based delivery will give them the analytics that will fuel conversations with advertisers about targeting and effectiveness of their ad placements. Like digital, programmatic platforms will become a part of the new standard, improving the peripheral inventory sold and increasing the CPMs for broadcasters.
The FCC Spectrum auction had previously been viewed as a burden to the full implementation of ATSC 3.0 due to the unknown variables of the spectrum repacking process, but ATSC does not appear to be on hold for the FCC event. Broadcasters will not know for sure when the auction is expected to finish or if their tendered stations will be taken until the FCC incentive auction clearing target and final stage rule are met. Stage 2 of the reverse auction began on Sept. 13, and the forward auction for wireless bidders is expected to start in late September and run through early October.If Stage 2 of the forward auction fails to meet the clearing price in the reverse auction, the supply of spectrum will be reduced by the FCC and then will go into a Stage 3, which could delay the repacking process further. In an ideal scenario, channel repacking would coincide with the introduction of ATSC 3.0 on a voluntary, market-by-market basis.
There are 16 separate standards regarding ATSC 3.0 and more in the development stages that are expected to be presented to the FCC very soon. They include proposed and candidate standards for video and audio compression, high dynamic range, wide color gamut and immersive sound, closed captioning, advanced emergency alerting, security, companion devices, personalization, application and interactivity, watermarking and fingerprinting, and internet protocol delivery. All ATSC standards, candidate standards and recommended practices can be viewed at the ATSC website.
Sinclair Broadcast Group has been one of the biggest proponents of ATSC 3.0. The company outlined the economic growth for ATSC 3.0 projecting a 32x revenue growth multiple despite no time frame. Sinclair estimates the additional TV channels with future spectrum could generate $154 million a year and the wireless ability of future spectrum could generate up to $1.5 billion. The table above shows how they get to those numbers, by selling the additional spectrum gained from the new standard at a $0.0002 price per gigabyte, a discount to the wireless wholesale prices.
While the implementation of the new standard is moving quickly, there are a lot of chips that still need to fall in place for it to reach mass adoption. There's the issue of how broadcasters will upgrade the towers. Also, sharing transmission space while offloading the ATSC 1.0 signals to a different tower in the same market requires collaboration. The FCC spectrum auction and subsequent repacking process needs to happen before station owners can start to attack this process.
In addition to broadcasters, consumers are going to need to take action as well. For ATSC 3.0 to be received on mobile devices (without the need for a tuner), consumers need to either upgrade their TV sets, purchase a dongle or router equipped with an ATSC 3.0 tuner, or purchase a third-party set-top box with an upgraded tuner when such devices become available.
Mr. Leitzinger will be participating in a panel discussion called New Revenue Streams: Datacasting and Pay Broadcasting at the TV2020 conference during the NAB Show in New York, November 9-10, 2016.