In February, this column examined a hot new topic in the broadcast industry: digital workflow. That column touched upon the history behind the development of standards to manage digital assets — not just the essence media (audio and video streams) that we broadcast today, but the metadata that is produced from the moment a program is conceived to the moment that a version of the final program is aired.
We also touched on the development of network operations centers for the large multichannel “broadcasters” of today: companies such as Turner Broadcasting, Discovery Networks, ESPN and a host of other cable networks, many of which are now owned and operated by the media conglomerates that operate the six largest broadcast television networks.
We noted that this could be the year of MXF (Material Exchange Format) at NAB, as traditional video equipment manufacturers announce plans to use MXF to manage metadata from acquisition to emission.
It seems only fitting that we segue from this examination of what the large media conglomerates are doing to prepare for the future of digital television, to an examination of the implications their actions may have with respect to the future of free-to-air local broadcasting. Many industry leaders and pundits now believe this future will involve the delivery of multiple channels in each broadcaster's digital multiplex.
Multiple channels and still nothing to watch
Just weeks ago, when the decision was made to link the subjects of digital asset management with multichannel broadcasting through these columns, the task looked manageable. Then the dominos started falling.
It was expected that the FCC would release its Further Notice of Proposed Rulemaking on Cable Carriage of DTV broadcasts by the end of January. The original order only requires cable companies to carry the primary video from a broadcaster. The cable industry is drooling over the prospect of challenging any FCC order that would require them to carry multicasts. This would provide an opportunity to mount a new challenge to existing must-carry and retransmission consent regulations; regulations that were nearly overturned by the Supreme Court when they were challenged in the mid-90s.
Broadcasters continue to push for carriage of the entire digital multiplex, and have been telling the FCC and Congress that they would develop new channels to fill these multiplexes. Proposals include weather channels, news channels and maybe even a few slots for public affairs.
What is not clear is who is going to watch these channels, and how broadcasters can turn a profit programming them. The OTA audience is too small to make this strategy viable; cable carriage is critical. But the multichannel services already offer many similar channels; they see no legitimate reason to give broadcasters more real estate on their systems. What broadcasters would like is to carry the channels now carried by cable, but this opens a huge can of worms in terms of who has the right to carry what and the right to insert local commercials into these channels.
For the moment it appears that the FCC has tabled any action on this subject, lacking a consensus on how to move forward.
Local broadcast affiliates have little leverage in their attempts to balance their power against the media conglomerates, other than their traditional role as the local gatekeepers.
Where would broadcasters be if the broadcast networks decided to take their content directly to cable and DBS? You may find out sooner than you would like …
As this is being written, Comcast has announced its intention to merge with Disney. If approved, this deal would create the world's largest media company and deliver one of the four major broadcast networks into the hands of the largest multichannel cable television provider in the United States. This just after the government approved the merger of Newscorp with DirecTV, combining the FOX programming empire with the largest provider of multichannel DBS services, not just in the United States, but also in Europe, South America, Asia and Australia.
The handwriting is on the wall. The media conglomerates do not need local affiliates; what they want are the revenues that local broadcasters control today. If they cannot get there by squeezing affiliates and pressuring the politicians to raise the ownership caps, they can just take their content to cable and DBS and …
Local broadcasters certainly do not want to go there. But can they convince the politicians to prevent this from happening?
Meanwhile, developments in multichannel broadcasting in Great Britain and Germany have attracted the attention of politicians here in the United States. Analog broadcasts in the region surrounding Berlin have been shut down. In their place, the public can buy an inexpensive DVB set-top box that can receive about 30 advertiser-supported channels in the clear. In the UK, Freeview now has more than two million “subscribers,” again with about 30 channels delivered in the clear. The annual TV receiver license fee in the UK helps to pay for this service now that the BBC is one of its main stakeholders.
Some of our representatives are curious as to how all of this is possible, and if any of the things happening in Europe could be adapted here to get the DTV transition moving.
They may have an opportunity to learn firsthand why the U.S. DTV system is ill-equipped to provide a competitive multichannel service. Late last year, USDTV announced the availability of a multichannel subscription package in Salt Lake City. The service will offer about 20 channels, including all local digital broadcasts and a number of cable networks. The capacity to deliver the cable networks is being provided by several broadcasters in Salt Lake City. The service will cost $19.95 per month.
A receiver will cost $95 with a one-year service agreement; an additional receiver will cost $49.95 and will add another $4.95 per month in subscription fees. The HD-capable ATSC receivers are being sold at several retail locations in Salt Lake City, including Wal-Mart. Hisense Company of China has invested $75 million in USDTV to subsidize the $150 cost of the HD capable set-top boxes it will build for USDTV. The cable channels will be encrypted so that they can only be viewed on authorized USDTV receivers.
Could this be a viable business model for broadcasters in the United States?
The original On Digital service in the UK required a similar monthly subscription fee for a similar number of channels. It could not compete effectively against BskyB, the Newscorp DBS service for the UK.
Then there is the issue of service reliability. USDTV has carefully chosen its test markets. Las Vegas and Phoenix are on their list of cities to serve next. All of these markets have virtually ideal transmission characteristics for the ATSC standard; all of the transmitters used for the service are co-located on mountains above the city. Multipath issues should not be a major factor in these markets.
From here, it looks like the USDTV offering may be overpriced for what is offered, and the need to put up antennas may be a significant barrier to consumer adoption.
What broadcasters need is a reliable system to deliver a basic cable/DBS equivalent. A limited channel offering could work if it is free, but a monthly fee will be difficult to justify unless the service offers a competitive channel lineup.
In order to compete, broadcasters will need to develop a new business model; create a reliable delivery infrastructure that is easy to receive — preferably by both fixed and mobile/portable receivers; create a customer-support infrastructure to handle installations, service and billing; and figure out how to negotiate with the media conglomerates to carry the same channels as the services they are competing with.
Needless to say, this is a daunting task, one that would require fundamental changes in the existing regulatory infrastructure and laws regarding terrestrial broadcasting.
And there is one more thing. Broadcasters will need a viable platform to support the service: a platform that equals or leapfrogs those now being deployed by cable and DBS. This means advanced features such as a PVR for local caching; the ability to tie to another network for a backchannel (preferably the Internet); the ability to integrate multiple media for on-screen navigation and new services; and a real security system — no broadcast flag waving here.
It looks like broadcasters have a lot to look forward to at this year's NAB. In addition to looking at the latest and greatest in broadcast gear, it might be a good idea to look at the business model for digital TV, with an eye for reinvigorating the broadcast business.
As noted last month, MXF is going to be a big buzz word at NAB. The Pro MPEG Forum will be hosting MXF University sessions during NAB, and digital workflow will be the buzz on the show floor. Take a look at MXF and all of the technology bubbling up from the Internet. This is where the innovations that can save local broadcasting are being developed.
Open your mind to new possibilities. Managing your digital assets properly is the gateway to survival in the emerging digital world. Chances are good that the broadcast station of the future will look more like a multichannel network operations center than today's facilities. And this is just the beginning — the next step will be to localize and personalize media experiences for the viewers in your market.
There are two keys to unlocking the potential of digital broadcasting:
Local caching — think of this as a server that you can control when the viewer is tuned to your content. You can instruct that server to insert an ad that has been downloaded — perhaps during off-peak hours — just as you instruct a server in the station to insert your ads today.
Local media composition — think of this as your master control switcher in the receiver. This is not a revolutionary idea. Web pages are composed from media objects on PCs today; objects that can include audio and video streams, text, graphics, still images, etc. MPEG-4 provides a complete architecture to deliver media objects and composite them in the receiver.
The revolution in nonlinear video editing tools has also barely begun. Almost all of them still produce a linear program output. In the future this is likely to change in two important ways:
These systems will begin to take advantage of the ability to access all media files randomly to create branching and interactive programs; programs that will use metadata extensively to enhance the viewing experience.
- In time, the output of these systems will be metadata wrapped around the objects (files) that are used in the final composition. The actual composition process may take place in the network operations center using a metadata recipe to create each different version of the program or, the objects and the metadata will be delivered to the point of consumption, where they can be filtered to create a version that is localized to a sub-market and rendered to take full advantage of the capabilities and resolution of the receiver/display.
Broadcasters think in terms of delivering a linear program stream with the same ads for everyone in the market. Multichannel broadcasts are merely an extension of this model. The broadcasters who survive the digital transition will be the ones who change the model. They'll think in terms of uploading targeted ads to a viewer's local cache, with instructions on when they can be inserted into the program streams that the station is broadcasting.
They will think in terms of zoned advertising — broadcasting several different ads simultaneously and having the receiver select the ad that is targeted to the zone where that receiver is located.
They will think in terms of delivering programs to local cache, and giving viewersthe option of viewing the program with the commercials as aired (if the viewer does not skip the ads), or without ads, after the viewer watches a few targeted ads from local advertisers who are willing to sponsor the show. Instead of 12 to 15 minutes per hour of ads, the viewer might only see one to two minutes. The cost of these targeted ads could generate far more revenue than the untargeted advertisements.
They will think in terms of delivering navigable experiences to local cache. For example, a documentary that can be consumed in a nonlinear fashion, complete with ads that you can navigate through voluntarily.
They will think in terms of clicking through from a broadcast to get more information from another network, such as the Internet. The viewer will expect that the linear broadcast will continue to be cached, so that they can pick up where they left off, before they decided to get more information because of an advertisement.
These broadcasters will think in terms of delivering bits instead of paper. For example, a navigable newspaper that may include video clips to support the story. A directory service that is constantly updated, not printed once each year; directories that are cached locally so that they can be accessed from any TV or computer in the home.
And they will look at all of these services as incremental revenue streams.
It is growing increasingly obvious that multichannel programming will be one component of the next business model for digital terrestrial broadcasting in the United States. Before this can happen, however, broadcasters must consider what it will take to compete in the competitive multichannel television business, and to overhaul the archaic regulatory infrastructure of broadcasting.
Craig Birkmaier is a technology consultant at Pcube Labs, and he hosts and moderates the OpenDTV Forum.
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USDTV multichannel subscription service
Webware: Content Management 101
PDF versions of related DTV articles and papers by the author: “Limited Vision: The Techno-Political War to Control the Future of Digital Mass Media,” ACM Networker - June 1997 and “A Visual Compositing Syntax for Ancillary Data Broadcasting,” paper presented at the 31st SMPTE Advanced Motion Imaging Conference, February 1997