Now that the ATSC 3.0 standard is finalized and South Korean broadcasters gave the next-generation system its inaugural run at the recently concluded 2018 Winter Olympic Games in PyeongChang, what’s next?
Now, planning and testing in the U.S. is underway, with select broadcasters and industry participants refining their strategies for technical, structural and business plans. Some trials—in Phoenix, Arizona and Dallas, Texas—are being readied for just that. The last time U.S. broadcasters transitioned from an old to a new system, conditions were vastly different and this time there is no government mandate or organizing body for a wholesale switchover.
Individual broadcast companies are in control this time, and they must work within long-standing decentralized infrastructure and transmission systems in a given market. The individual parties in these markets are typically fierce business competitors—cooperation may not be in their DNA. Most agree, however, that a transition must feature a high level of U.S. broadcaster cooperation for a successful switch to a next-generation TV system.
With the new standard, however, U.S. broadcasters get modulation tools that enable centralized transmissions. In fact, this is how European digital terrestrial TV (DTT) broadcasting is done. They create Single Frequency Networks (SFN) that are constructed and managed by a single entity. This method makes more efficient use of spectrum, can expand overall coverage and can reduce operation costs.
And this is what many in the U.S. broadcast business plan to do. Centralizing transmissions by banding together multiple TV stations in a single market with SFNs will enable more and different video services to keep up with all the video service newcomers. Under these conditions, the technical learning curve and the network building might end up being the easy part.
The hard part, of course, will be banding together perhaps thousands of willing TV stations into multiple centralized networks. An impossible task? It won’t be easy, but there is currently a set of circumstances that might make this seemingly intractable ecosystem governable.
Although impossible to quantify, the new competitive video services landscape cannot be underestimated as a motivating factor for broadcasters to cooperate with each other—especially if that cooperation introduces technical efficiencies that can enable additional revenue streams, reduce ongoing operating costs, and create a platform by which a single market can transition from the old to the new system. DTT broadcasters know they have a high hill to climb and that they must upgrade their networks to see the other side.
Industry consolidation will play a role. Today (and soon, i.e., pending acquisition of Tribune by Sinclair), more stations in fewer corporate hands obviously creates harmonization. Less formal and binding than acquisitions are the formation of broadcasting group consortia to test, promote and build out ATSC 3.0 services and networks. The prime examples include the consortium led by Sinclair Broadcasting Group (SBG) and its One Media subsidiary that includes group-station owners like Nexstar and Univision. Pearl TV, with an established group of station owners that includes Cox Media Group, Raycom Media and Hearst Television, is another example of industry collaboration. Both of these groups recognize cooperation is essential and are proponents of adopting the next-generation system.
Let’s assume that broadcasters have the will to cooperate, and the enabling mechanisms are in place to restructure how U.S. broadcasters get their terrestrial signals to viewers. Still, there may be an essential missing ingredient: a single trusted unifying entity that can corral individual market competitors into centralized transmission agreements. Multiplex operators are those entities in DVB-T and DVB-T2 territories (mainly in Europe).
Would U.S. DTV broadcasters adopt a multiplex operator model? It is a viable option. The business and regulatory conditions between the two regions are different enough that a replication of the multiplex operator business model may not be the answer. But there are undoubtedly other ways to structure deals to create centralized DTT networks in the U.S. There is a first time for everything and we expect that time may be now.