The transition to the ATSC 3.0 television broadcast standard could result in big money for large- and medium-market TV stations, come 2020.
That’s the key takeaway from a new BIA/Kelsey report set for release this week.
“The Business Case for ATSC 3.0” offers an in-depth review of the commercial TV broadcasting business. Based on BIA/Kelsey’s numbers-crunching, the investment large- and medium-market stations are considering to make for adopting the ATSC 3.0 standard would be recouped within three years.
As BIA/Kelsey SVP and Chief Economist Dr. Mark Fratrik notes, ATSC 3.0 brings particular business advantages, with respect to ad revenue, viewership and keeping digital competitors in check.
“ATSC 3.0 will change the business of broadcasting into a next-generation wireless communications business,” Fratrik said. “This new technology will give broadcasters the ability to pursue multiple new business models that will significantly diversify their current revenue mix.”
At the core of broadcasters’ ATSC 3.0 expectations is the ability to offer a new internet protocol (IP) platform to better satisfy the changing needs of consumers and advertisers.
In the report, certain business objectives for the television broadcasting industry and its members surrounding the ATSC 3.0 migration are highlighted. These include the maintaining or increasing of viewership through “superior service” to the viewing audience, more programming options, and “ongoing innovation to accommodate expected (and unexpected) abrupt and hard-to-predict changing viewing patterns.”
ATSC 3.0 can also bring out better ad targeting, Fratrik says, as well as “dramatically expanded and more accurate viewership tracking, and a capability to better integrate multi-platform campaigns.” Included in the report is BIA/Kelsey’s forecast for incremental ad revenue from ATSC 3.0 from 2017 through 2023.
Also discussed is the growth of non-advertising revenue through the development of new IP-based broadcasting and non-broadcasting business models.
The report also covers concerns related to the ATSC 3.0 conversion, which include overall capital cost, providing uninterrupted service to their existing audience and determining the relevant time frame for transition.
“The biggest opportunities around the implementation of ATSC 3.0 are that it will give broadcasters a new opportunity to grow and address their major concerns like reversing recent local television station viewing trends,” Fratrik said. “In our report, we present the business model for implementing ATSC 3.0 based upon our assumptions of the speed of introduction and acceptance by consumers, advertisers and other players in the media ecosystem and overall it’s quite positive for the vast majority of local television stations.”