Deeper Dive—Why Fox and NBC committing to ATSC 3.0 is such a big deal

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Fox and NBC both formally committed to ATSC 3.0 during NAB Show New York. (Getty Images/spyarm)

NEW YORK—ATSC 3.0, the still-nascent next-generation TV standards for broadcasters, had a fairly momentous Wednesday. Fox and NBC, two of the biggest broadcasters in the country, formally committed to launching the technology.

Fox and NBC were part of a group of broadcasters including Univision, Tegna and Nexstar Media that vowed to develop and deploy ATSC 3.0 features and functions nationwide for consumers by 2020. ATSC 3.0, which is an IP-based distribution technology over a managed broadcast network, can enable features such as interactivity.

Anne Schelle is managing director of Pearl TV, a consortium that includes Cox Media, E.W. Scripps, Graham Media, Hearst Television, Meredith Local Media and Raycom Media all working together on ATSC 3.0. Schelle said NBC and Fox both have terrific content that helps showcase the interactive elements that ATSC 3.0 can enable with broadcast television. Specifically, sports.

“They’ve been working with us in [the Phoenix ATSC 3.0 model market] for close to a year now, and they’re seeing a lot of the opportunities and benefits,” Schelle said on the sidelines of NAB Show New York.

Her comments about sports echo what a panel of ATSC 3.0 experts said earlier in the day. Live sports continue to be a huge draw for consumers to broadcast networks, so NBC and Fox, with their rights to marquee leagues like the NFL and MLB, need to be on board with ATSC 3.0.

From the sound of it, NBC is absolutely on board.

“ATSC 3.0 is something that as an industry we have to do. The new standard will transform the way we deliver content to our audiences—including viewers who are consuming information in multiple languages and screens. ATSC 3.0 will also help us to better connect advertisers with the audiences they want to reach on any platform,” said Valari Staab, president of NBCUniversal Owned Television Stations, in a statement.

Not only will sports make ATSC 3.0 features like enhanced video and audio quality along with interactive functions more valuable, those features could make sports even more valuable to broadcasters. Several broadcast rights for major sports leagues are expiring over the next few years, and Disney is in the process of offloading 22 regional sports networks as part of its bid to acquire much of 21st Century Fox. Those assets and leagues could be enticed to do deals with digital platforms like Amazon and Facebook, which have shown they can add interactive elements to sports productions. If broadcasters can offer similar features, it could open up new opportunities for both leagues and broadcasters.

“[ATSC 3.0] is an IP pipe. It’s interactive, so it allows for you to add overlays with more information. Think about sports gambling. It really makes the content become much more of an interactive environment for consumers, and that’s a great thing for sports,” Schelle said.

Of course, NBC and Fox are both holders of substantial amounts of broadcast spectrum as well, and ATSC 3.0 holds the promise of freeing up a lot of that spectrum for other use cases.

“One big challenge was whether the big owners of valuable spectrum could work together, commit resources, and stick to the game plan. Done, done and done," said Jack Abernethy, CEO at Fox Television Stations, in a statement.

At NAB Show New York, Sinclair President and CEO Chris Ripley said his company’s wireless spectrum is currently only used by 15% to 20% of the country, but with ATSC 3.0, Sinclair can build a platform with that spectrum the whole country can use.

Schelle said companies such as connected car manufacturers will be looking to use broadcast spectrum, and compared with 4G and 5G, in some instances, broadcast spectrum can deliver a huge economic advantage for delivery of data.

“We live in a world where massive amounts of data need to be moved. And that’s a place where we can play,” Schelle said.

Besides freeing up spectrum, there are other potential benefits to deploying ATSC 3.0. Ripley praised how the technology is designed with mobility in mind, how it will allow for targeted ads which increase CPMs to about two to three times that of linear and how it can be paywalled so broadcasters can offer subscription-based services.

Of course, for any of these ATSC 3.0 dreams to be realized, ATSC-enabled products need to be available to consumers. Ripley said that, through Sinclair’s partnership with Saankhya Labs, ATSC 3.0 chips for use in televisions, cellphones, tablets, dongles, gateways and automotive units will be ready in time for CES in January.

Ripley said Sinclair has yet to find any mobile carriers or OEMs interested in incorporating ATSC 3.0 chips, but major TV OEMs like LG and Sony cheered the new collaborative ATSC 3.0 development effort from Fox, NBC and others.

Still, Wall Street is wary of ATSC 3.0. Marci Ryvicker, managing director at Wolfe Research, said the talk on Wall Street currently is about what ATSC 3.0 actually is. She said investors and investment firms have not been able to identify the value of the technology.

John Hane, president of Spectrum Co., an ATSC 3.0 broadcast spectrum consortium founded by Sinclair, Nexstar and Univision, happened to be in the audience for a panel featuring Ryvicker. When he said that ATSC 3.0 will cover the country “very, very well” by 2021, Ryvicker said that will seem like a long wait for current broadcast investors. Hane then suggested there may be a new crop of investors that will be more patient with the technology.

“I agree with that. You need a longer-term investor to take a look,” Ryvicker said.

With both Fox and NBC now throwing their full weight behind ATSC 3.0, the technology will likely pique the interest of lots of new investors and cause current investors to reevaluate its potential.

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