It’s not new to read experts’ opinions about the challenge of finding the right “recipe” for local broadcast success in streaming. The questions around “Where does local broadcast fit?” or “How can local TV benefit the most from streaming?” keep popping up, whether in our industry publications or at the virtual events we’re all attending.
Some might throw their hands in the air and stick to what they know best – traditional pay-TV. But that would be a mistake. The opportunities in streaming, particularly for local broadcasters, are immense. The streaming wars are not just a head-to-head battle between the major content owners. There is now a huge underdog that has an opportunity to leave the others in the dust – and that’s local broadcast. Yes, you read that right.
Why, you ask? It’s largely due to the new ATSC 3.0 broadcast TV standard. The rationale for that claim is actually quite simple. It comes down to four important, timely benefits and value-adds of ATSC 3.0: the growth of over-the-air (OTA), under-utilized broadcast towers, hybrid pay-TV and skinny bundles.
Growth of OTA
Currently, on average, only 20% of broadcast TV consumption in the US is done over the air (OTA); most of the other 80% of consumption is through cable operators. Yet in some areas, the percentage of OTA consumption runs closer to 30%. Since 44% of broadcast TV antenna purchases have been made in the last three years, there is significant growth occurring in the direct-to-consumer base for broadcasters, with no end in sight.
Under-utilized broadcast towers
The advent of the ATSC 3.0 standard has suddenly made the network of local broadcast towers a tremendously under-utilized resource. ATSC 3.0 opens up doors for local broadcasters to become multi-screen bundle players and to deliver the highest signal quality via OTA.
Because ATSC 3.0 includes an IP broadband signal, this higher quality will also stand out, especially for large, live audiences, as via ATSC 3.0 it is delivered by a managed network and as multicast. There are no conventional content delivery networks (CDNs) that do this today. By tapping into these under-utilized broadcast towers, local broadcasters will be able to offer not only IP television and IP broadband, but they can do so without any lag between the two – otherwise known as program synchronous. Plus, where higher quality leads to maintaining or even boosting viewership, that naturally attracts more advertising dollars.
With ATSC 3.0, broadcast television has embraced new, advanced technologies that help to create a unique hybrid pay-TV environment. These technologies include security and digital rights management (DRM) to create premium tiers of service and pay-per-view (PPV) events delivered directly to consumers in their homes.
From a local broadcast perspective, the possibilities of true customization emerge. Think about viewers who are keen to have immersive audio and a theater-like experience at home for their Marvel movie viewing parties. Or think about content, such as having access to every match your Team USA hometown hero is scheduled for in Tokyo 2021. Or think about watching a professional sports program and having a choice of all the stadium cameras to view. The customization possibilities are nearly endless.
Skinny bundles have transformed the pay-TV industry. And with ATSC 3.0, streaming services can deliver high-quality local broadcast content. Between the highest quality signals, multi-screen services, and most importantly, direct-to-consumer delivery, local broadcasters can become the new skinny bundle providers.
A powerful component of ATSC 3.0 is that local broadcasters will be able to obtain true audience measurement via the standard’s hybrid use of the Internet. Combined with broadcast television, the coveted concept of linear addressable advertising becomes a reality. So, as the traditional $70 billion+ TV advertising revenue base erodes to digital and direct-to-consumer services, broadcast television now has the chance to not only regain that revenue source, but to surpass it. ATSC 3.0 enables the technology resources necessary for audience measurement and targetability of advertising, thus opening up a significant source of advertising revenue. In fact, since ATSC 3.0 makes for highly personalized experiences that maintain viewership, the targeted advertising experience becomes even more valuable to the advertiser.
David showed us how to prevail by bringing a rock to a Goliath-sized sword fight. For local broadcasters, ATSC 3.0 is one big, powerful rock as they enter the streaming wars. Stay tuned.