Next week, the National Association of Broadcasters meets in Las Vegas for its annual show. Not surprisingly, there have been two announcements about ATSC 3.0 in the last day.
First, Sinclair Broadcast Group and others will be holding a trial of single-frequency network (SFN) technology in Dallas. SFN is a technology which will let multiple HD content streams coexist on the same broadcast signal. It’s very exciting for companies like Sinclair who own more than one station in the same market, and potentially means millions of dollars saved in broadcasting.
Also, Phoenix will be the site of 4K testing. LG will provide the TV tuners and will be testing not only the improved picture quality of 4K but the ability to serve targeted ads by combining broadcast TV with broadband internet.
I expect Sinclair Broadcast Group to announce other ATSC 3.0 news next week at the show.
Our take on this
The move to ATSC 3.0 is a deliberately slow one, but there is a lot of motivation for broadcasters to move as quickly as possible. While most people think of ATSC 3.0 as a way to deliver 4K over the air, that’s really only a small part of what this new system does and it’s really not the part that most broadcasters are focused on. You can see that in the things they’re testing. They basically know how to broadcast 4K, because it’s not terribly hard. One digital signal is not too different from another and thanks to Google and others, there are some very practical compression standards that will allow a 4K signal to fit in the same space as today’s HD signals. (We have yet to see what the quality will be, but it’s pretty likely to be worse than streaming 4K at this point.)
The two other technologies being tested really show you why broadcasters are hot for ATSC 3.0. Unfortunately they have nothing to do with bringing value to you, the consumer.
Here’s what they are really testing
Large broadcast companies are pushing SFN, hard. In the last 30 years, large companies have arisen to own a huge chunk of the TV broadcast world. Remember that in the 1980s the rules were that no company could operate two channels in the same market and the largest station ownership group was about 20 stations. Megacompanies like Sinclair own hundreds of stations. In some cities could control ten different broadcast streams including subchannels. These companies pay for one transmitter for each HD station they put out there and that’s a lot of money. Imagine if you had to pay the electricity bill for a 500,000 watt light bulb — that’s what they’re doing.
If SFN technology works, you could see every HD station in a market on just two or three broadcast channels. First of all this frees up a lot of space in the broadcast spectrum. Cell companies could use this space and that would make everyone happy. The cost savings for an operator like Sinclair could be huge. Every broadcaster in a market could benefit — by sharing signals everyone could save money.
As for “addressable advertising,” this is one of those schemes that broadcasters think is going to save them. TV stations still get a lot of their revenue from local advertising, but those dollars are drying up. Cable and satellite companies can deliver uniquely targeted ads to each consumer and local over-the-air antenna broadcasters can’t. This technology would download targeted ads to your TV and play them in place of the broadcasted commercial breaks. It’s essentially what most cable companies are already doing.
Broadcasters think addressable advertising will bring back the dollars they used to rake in back in the days before internet. Here, I disagree, but it probably will work better than the “same commercial for everyone” model they are currently using.
So don’t count on 4K very soon
It really seems like 4K over-the-air isn’t the real focus of ATSC 3.0. I’ve actually said that before, but it’s very clear that the real focus is on money. Broadcasters want to save it, and they want more of it. Of course I am very pro-business and so I understand all of that. It does make me a little sad because broadcasting is a very special kind of business. It’s a business that is chartered by the US Government to serve the people. I’m not sure how much more the people would be served by 4K, but are they really being served by getting more personalized ads?