Play the cards
Mar 1, 2004 12:00 PM, Brad Dick editorial director
You've heard the crying. Boo hoo, it's tough out there. We're not making any money (or not as much as we used to). Those mean 'ol cable and satellite guys are taking our audience. They don't even pay us for our programming. Blah blah blah.
While I've talked as much as anyone about the problems broadcasters face, I recently had my spirits lifted while attending the fourth Digital TV conference co-sponsored by Broadcast Engineering magazine.
The conference focused on ways stations can become competitive using some of the new digital technology that's available. During a breakfast seminar, three new companies, all targeting the digital delivery of content and data, presented some interesting new thoughts on how stations can survive and prosper — i.e., make money with DTV spectrum. However, to take advantage of these solutions, stations have to re-examine their business model.
All those of us old enough to remember the days of black-and-white television have ever known is the broadcast model where stations use their one channel assignment to transmit one program. Pretty boring if you think about it, especially in light of what digital can do.
What if broadcasters gave up on the one-channel-one-program model, and instead implemented a wideband digital transmission model saying, “Here's my bit bucket, what do you want to transmit?” Now, instead of each station attempting to fill all that bit bucket, why not lease whatever bit-space isn't needed by the station to someone else? Let them fill it with something that generates revenue and pay the station for that access.
This service could offer regular broadcast TV, including the local station's SD and HD signals, plus 20 to 30 channels of cable and pay-per-view, subscription programming and even Internet service. Assume this new service was less expensive than cable or satellite. The local station wouldn't have to be involved in program acquisition, rights, installation or subscriber billing. All you'd have to do is become a digital pipe and collect the checks. Interested?
It may sound too easy, but there's already a service on the air doing just this. It's called US Digital TV and it's based in Salt Lake City.
For less than $20 per month, subscribers get broadcast SD and HD plus 25 other channels. The key to getting this service off the ground was for the local stations to cooperate by allowing a third party to use their excess spectrum.
Does it work? You bet it works. And it's only one of the three business models proposed at the DTV conference. Other proposals for similar digital broadcast-friendly ventures were presented by All TV Connect and Cache Networks.
These are only three of the new venture ideas floating around out there. Many more are just getting off the ground. Broadcasters have been dealt a winning hand of digital cards. All we have to do is play them.
Send comments to: • editor@primediabusiness.com • www.broadcastengineering.com
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