Sinclair CEO: Broadcasting isn’t a growth business, but ATSC 3.0 can change that

From left to right: Jack Abernethy, Fox Television; Perry Sook, Nexstar; David Smith, Sinclair; Pat LaPlatney, Raycom; Harry Jessell, TVNewsCheck.

NEW YORK—Sinclair Broadcast Group President and CEO David Smith sees the switch to ATSC 3.0 as vital to the survival of the broadcasting industry.

At a well-attended panel today at NAB Show New York, Smith along with Fox Television CEO Jack Abernethy, Nexstar CEO Perry Sook and Raycom CEO Pat LaPlatney sat down to discuss the path toward capitalizing on ATSC 3.0. The discussion was heated, with Abernethy playing the skeptic and Smith and Sook playing the passionate defenders of the incoming standard set.

“We’re not a growth business, in case you hadn’t noticed,” Smith said, adding that it is essential for ATSC 3.0 to reach the marketplace as fast as possible in order for the broadcast industry to survive.

Smith also pointed out that 70 percent of all advertising will be mobile and said it’s crucial that TV broadcasters be able to play in that space as well. “We’re not in that business. If you want to compete, you need to be in that business,” Smith said.

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Besides the advantages of increasing mobile capabilities, Smith praised the technology’s potential to open up more bandwidth in the pipe, which he likened to real estate that could be developed into many different business opportunities. For example, he said that bandwidth could give broadcasters the chance to compete with satellite radio broadcasters like Sirius.

Smith said he expects ATSC 3.0 and all the “real estate” it makes available will easily drive 4 to 5 percent annual growth for broadcasters.

Abernethy, meanwhile, remained cautious about the business case while praising the technology within ATSC 3.0. He said that for the last couple of years, anyone who spoke out against 3.0 was looked at like a Trump voter but insisted there are serious concerns to address.

For one, Abernethy wasn’t completely convinced that transitioning to ATSC 3.0 wouldn’t eat into the lucrative retransmission consent aspect of broadcasters’ business. With the range and quality of the TV signals that will be available over-the-air once ATSC 3.0 is in place, Abernethy said cord cutting could potentially escalate.

But Abernethy was enthusiastic about what a new audience measurement system could mean for the broadcast industry, which currently relies on data from third-party providers like Nielsen and Rentrak. He went so far as to call audience measurement the “most valuable” aspect of ATSC 3.0.

RELATED: Sinclair VP: ATSC 3.0 will allow us to ditch Nielsen, save millions

As for the cost to convert to ATSC 3.0, Sook said it’s not as bad as many people think. In terms of Nexstar, Sook estimated the cost of upgrading 170 stations would be less than one year’s run rate capex for Nexstar. And he stressed that broadcasters can take their time with the transition and not feel obliged to jump to a full single frequency network (SFN) build out right off the bat.

“It’s a crawl walk run kind of a build,” Sook said.

To that point though, Smith said that SFNs will help broadcasters match the phone companies’ quality of service, calling telcos “our competition.”

“We got rolled 15 years ago and we’re not going to get rolled again,” Smith said, adding that the costs of the transition are “immaterial,” compared to what even the initial ATSC 3.0 builds will accomplish even if they put off SFN deployment.

For now, Smith told the audience to focus on getting ATSC 3.0 up, cover a 40 mile radius, and get the data, which will allow broadcasters to sell targeted ads which will help drive multiple-point growth for the industry.