For decades, free-to-air broadcasting dominated the landscape of television. The NAB was considered to be the most powerful lobby in the nation's capitol. Today, the NAB's annual conference and exhibition continues to grow, even as the broadcasters it represents have fallen into a long, slow decline.
At NAB, broadcasting is now a sideshow. It's the world's largest digital media marketplace that feeds the NAB's coffers in much the same way that TV broadcasters now look to millions of cable subscribers to pay a monthly subscription fee for free TV.
The TV world has exploded with multiple choices. For decades, this largely meant more program choices than the limited number of analog channels offered by TV broadcasters to deliver one program at a time.
Broadcasters who went to NAB2006 may have come home understanding a new meaning for multiple choice: Consumers want more choice, not just in terms of content, but also in the venues for which digital media content can be optimized and delivered to them — anywhere, anytime on virtually any device.
Broadcasters are learning that they made a poor choice with respect to their standard for DTV broadcasting — that they are being left behind as the content conglomerates begin to exploit new channels of distribution in pursuit of new revenue streams. The short-lived era of free TV is over, at least here in the United States.
I still remember a conversation that took place in the early '90s with a close friend who has enjoyed a successful career as a broadcast engineer. At the time, I was participating in the Advisory Committee on Advanced Television Services (ACATS), which ultimately recommended to the FCC the adoption of the ATSC digital television standard. That standard was being optimized for only one thing: the delivery of a single, high-definition television program via a 6MHz RF channel.
I was advocating a less rigid approach to DTV broadcasting, one that would allow the ability to broadcast all kinds of bits to all kinds of devices. This could include HDTV programs delivered alongside multiple channels of SDTV and new services capable of delivering TV and other forms of content to mobile and portable devices. My friend proceeded to lecture me about the basics of the broadcast TV business model.
“We are in the business of delivering the largest number of eyeballs possible at any moment in time to our advertisers,” he said. And he was quite adamant that multicasting would further fragment the broadcast TV audience, while driving up programming and operating costs. It seems that most broadcasters still believe in the viability of this legacy business model; unless, of course, the FCC would grant them multicast must-carry/retransmission consent.
The topic of multicasting continues to rear its head from time to time. Somehow, it managed to slip in the backdoor of the ATSC standard at the last moment. Back in 1997, it nearly caused some heads to roll when ABC floated the idea that the network would fill the new DTV service with multicasts rather than a single HDTV program.
At the time, Sinclair Broadcasting president David Smith was a big fan of multicasting. In a 1997 interview, he talked about his controversial decision to reject HDTV and use his new digital channels for multicasting. Smith told The Baltimore Sun that the costs inherent in converting to HDTV would have been staggering, and, besides, “I'm not going to get any more money from the car dealer on the corner because I have a prettier picture.” (See “Web links” on page 20.)
By 2004, after the company tried unsuccessfully to get the FCC to allow alternatives to the ATSC standard, Sinclair was singing a different tune. When USA Today published a story in which it noted that 213 stations were delivering multicasts via their DTV signals, Sinclair's Smith was skeptical, “I'm not holding my breath that anyone's going to get rich putting weather up.”
Recently, Sinclair announced two new multicast initiatives. WBFF-TV, the broadcaster's Baltimore Fox affiliate, has launched a multicast channel carrying syndicated and local programming. WBFF-DT-45.2 can be accessed over-the-air and on the Comcast and Millennium digital cable systems (and on Verizon's FiOS-TV service when it's launched in Baltimore). The new digital channel broadcasts 24/7.
In March, The Tube Music Network announced a distribution agreement with Sinclair. Revealed just two weeks after a similar agreement with Tribune Broadcasting was announced, The Tube Music Network is also available on 13 stations in Raycom Media markets.
Multicasting in the United States does not get much respect. Broadcasters firmly believe that the only way it can work is if cable systems are forced to carry these extra channels. This not withstanding the fact that Sinclair and other broadcast groups have managed to gain carriage of both primary HD channels and additional multicast channels via voluntary negotiations.
The last time the subject of multicast must-carry came up at the FCC, it was rejected, with a dissenting opinion from Commissioner Kevin Martin. At NAB2006, Martin, who is now FCC Chairman, suggested that this was “a missed opportunity for the commission.” Martin noted that a wider choice of channels could provide the incentive for many of the homes that now depend exclusively on the NTSC service to buy DTV receivers. He stated that if the majority were willing to look at the multicast must-carry issue, it would be an important opportunity to address the issue before the return of analog channels, now slated for 2009.
Congress did not address the multicast must-carry issue when it set the new deadline for the return of the analog spectrum. And it is not likely that this issue will be addressed in any telecommunications legislation during this session of Congress.
The most visible attempt to use the DTV spectrum for multicast services is by USDTV, which now operates a multichannel subscription TV service in four U.S. markets: Albuquerque, NM; Dallas-Ft. Worth; Las Vegas; and Salt Lake City. In these markets, broadcasters share spectrum with USDTV, which delivers a package of 12 TV channels in addition to the primary program channels of all local DTV broadcasters.
At NAB, USDTV announced that it is migrating its portion of the service to the more efficient H.264/AVC compression technology, which is also being used by DIRECTV and Dish Networks. The increased channel capacity will allow USDTV to offer additional paid programming packages. Existing subscribers will be able to get an AVC-to-MPEG-2 transcoder module that plugs into a USB port on current set-top boxes. The company also announced that a new AVC-enabled set-top box with a DVR would be available by the end of the year.
U.S. broadcasters (and USDTV) are still struggling to find a viable business model for digital broadcasting. They need look no farther than the UK for a real world case study.
As was the case with most European countries, the UK rejected the notion of moving immediately to HDTV, choosing instead to offer a wider choice of SD multicast channels. The original business model included free-to-air equivalents of existing analog channels and a subscription service called On Digital. With the subscription service, a home could receive about 30 channels for a monthly fee below that of cable and DBS.
On Digital languished and ultimately failed due to financial problems related to bidding too much for exclusive television rights to a football (read: soccer) league. The system was reborn as Freeview, which offers about the same number of channels with no subscription fee. Viewers need only purchase a digital set-top box to receive the multicast package.
The response has been excellent, with more than 10 million receivers in 6.4 million homes. Freeview is expected to pass DBS service BSkyB in total subscribers this year. Even more important, UK broadcasters have recently bid millions of dollars to gain channel slots on the free service. (See “Web links.”)
U.S. broadcasters may be wondering how this is possible. How can a company make money delivering advertiser-supported television content without the help of the cable and DBS subscriber fees (which now account for nearly half of the typical monthly bill for multichannel TV services in the United States)?
Clearly, the only way to make money with multicasting in the United States is to mandate cable and DBS carriage so that these additional programs can be seen. There are just not enough homes with free-to-air DTV receivers in this country to attract enough eyeballs to make any money. It's as if U.S. broadcasters are saying, “Why worry about DTV when we can get the multichannel services to collect a fee from every viewer for using ‘their’ networks? Who cares about reaching TVs with antennas anyway?”
Apparently, there is a growing group that believes that we want to watch TV on cell phones, video iPods, BlackBerries, notebook computers and those screens that keep popping up in cars. You can count the NAB among those organizations that think TV broadcasters should be able to serve the growing market for mobile and portable video.
It is not surprising that the media conglomerates are less than keen on this idea. The content oligopoly is desperately trying to monetize the delivery of video through multiple distribution channels. The wireless phone companies and Qualcomm's (COFDM-based) MediaFlo network charge subscribers for the video content they deliver. And the media moguls are learning how to use the Internet to download content — for a fee.
For now, unfortunately, U.S. broadcasters are watching from the sidelines as a world of digital media, with new opportunities, takes form without them.
Craig Birkmaier is a technology consultant at Pcube Labs, and he hosts and moderates the OpenDTV forum.
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1997 Sinclair statement on multicasting
2004 USA Today story on multicasting
The Tube Music Network
2006 FCC Chairman Martin's statement on revisiting must-carry ruling
ITV wins Freeview channel auction