TV Broadcasters struggle to remain relevant. Probably too little, too late.

Traditional, over-the-air TV broadcasters are pretty screwed. Time and technology are rapidly shooting past and only now are they collectively looking for ways to recapture a lost audience. Only now are they, as a majority and as part of a coordinated effort, actively promoting the DTV transition, by way of shutting off the analog transmitters under the government’s plan, that is scheduled to occur February 17th, 2009.

Ashamedly, even though they have had digital transmitters operational for several years because of the government digital transition mandate, most broadcasters have flat out refused to promote that fact to their viewers outside of the addition of the new call letters on an hourly legal ID. Many broadcasters were hoping for and using the NAB to lobby for yet another delay in the analog shutoff.
In much the same way the Emperor felt superior in his new clothes, broadcasters felt secure in their lobbying arm, the NAB, and their sizable ad revenue which they wore like a protective cloak of invulnerability. If it were not for the SHVIA act, retransmission consent, must-carry and syndicated exclusivity laws that essentially force local market broadcasters onto a regional cable head-end’s television set, it is extremely likely that television broadcasters would now be a much leaner business – as radio has become. As it stands, even these legal protections are unable to completely stem the hemorrhaging of viewers to alternative entertainment outlets.

As viewers increasingly leave TV behind to view content on the Internet, home movies, cable V.O.D. or just general web surfing the broadcaster is getting desperate to hold on to those eyeballs and are examining potential services such as mobile video or multiple encrypted pay channels (similar to the now defunct USDTV business) or datacasting business models (similar to the long dead Geocast service).

Currently there is a consortium of broadcasters that have formed the Open Mobile Video Coalition to evaluate several mobile video technologies from vendors LG, Samsung and Harris in an effort to determine the best-of-breed for delivering a robust viewing experience to portable devices – vehicular and handheld. OMVION is focused on competing in the space that the wireless carriers currently dominate by trying to develop a delivery system that can be incorporated into existing and future devices so that broadcast content can live somewhere other than the living room TV set.

Samsung A-VSB Video Phone

On another front, some broadcasters are also working with a new start-up called Building-B which is a form of USDTV resurrected with additional features, most notably a bookshelf speaker-sized ‘smart’ antenna to establish not only the primary over-the-air download path, but a WiMAX or cellular data return path (and emergency download path) to make the channel and data delivery service more interactive. This service also attempts to be predictive about your interests and viewing habits not just to throw targeted ads at you, but also to cache the programs and data you are likely to view on its internal hard drive.

There are multiple pitfalls with either non-traditional broadcast option. The first and foremost sacrifice the broadcaster will face is going to be in their available bits. Since each digital channel only has a maximum of 19.39Mb to allocate for their services it doesn’t take long to use it all up just in normal “broadcasting”. Many broadcasters currently provide an HD channel along with one or more SD channels, NBC’s WeatherPlus for example, and if the broadcaster is using the 1080i format for HD then it becomes even more difficult to incorporate additional service streams without crippling the HD quality.

In order to make their bits more efficient the broadcaster will need to employ the use of a video noise reduction system prior to encoding their content streams so that the MPEG-2 encoder is not wasting time and data encoding meaningless video information. By now, everyone should be using some form of statistical multiplexer in addition to the NR box which will allow for a more efficient use of the bits by allocating them between streams for portions of the programming that need all the bits they can get, such as action scenes or sporting event programming. Once those two pieces of gear are in place the broadcaster has a fighting chance to incorporate additional services.

So, now our hypothetical broadcaster has their transport stream ready and they decide to pass 5 to 8Mbps over to either the mobile video service or the datacasting service. How do they monetize the venture?

  • In the mobile video plan, the broadcaster buys and installs the gear, then it is up to the broadcaster to develop a business model to create some form of ad revenue much like their current broadcast business model and/or charge other networks/content providers carriage in their streams. This is actually more plausible as it may be possible for the sales force to push on to advertisers and additional nominal charge for “inclusion” into the mobile service as well as the normal broadcast ad package.
  • In the Building-B example it would be a “revenue sharing” plan where a portion of the subscription fees that each viewer pays to Building-B to unlock the video streams and data in their home appliance is divided up between the participating broadcasters (I’d love to see the math on this one).

Each plan is also plagued by numerous technical challenges that are likely impossible to get around completely.

For the mobile video plan I see the following that stands in the way:

  • Mobile video service already exists via the Qualcomm/MediaFLO service that uses channel 55 DTV service to make its way into certain enabled phones. Verizon calls it their V-CastVideo service. Broadcasters don’t have a set format standard yet, meanwhile competition marches on.
  • Broadcasters have their DTV service on UHF channels 14 through 51 and (unbelievably) on VHF channels 2 through 13. The chipset in each mobile device would have to be able to tune to any of those given frequencies depending on where in the country it happened to be at the time.
  • As I mentioned above, broadcasters are using the VHF channels. Surely you know how enormous the antenna would need to be in order to be effective at those low frequencies? A half-wavelength antenna for channel 2 would be 9.1 feet long and channel 13 would be 2.3 feet long. Ridiculous.

Remember these?

  • If the CE industry somehow manages to floods the market with the chipsets needed to make all this magic (above) happen, will it be broadcast in the clear for everyone to see or will each device need to be activated after a fee is paid (like satellite radio) to each broadcaster for their collection of channels?

For the Building-B service I have serious doubts:

  • First off, this has been tried before (albeit without some of the newer features) by USDTV and failed in less than three years. How is it more compelling, affordable or value oriented over basic cable and a TIVO? Pricing is still a guess at this point.
  • People hate antennas. There, I said it. I have a nice one mounted on my chimney for my free HDTV, but I would much rather do without it. I like the convenience of cable TV. I’ll even tolerate a DBS dish because hundreds of channels are coming in through that one dish instead of just a dozen (or so) on my over-the-air antenna. Having a “smart” antenna in the living room somewhere is even worse than being outside.

My SquareShooter outdoor antenna for DTV.

  • Why would someone want to find a place for yet another set-top box? It doesn’t replace anything that is currently in use by the average TV viewer. It is yet another device that must be shoehorned into the home entertainment system.
  • The issues that every customer will have in reception based on their address and antenna placement in a home or apartment seem too hit-or-miss. Even outdoor antennas are not a sure thing. A “smart” antenna still can’t make up for a broadcast signal that just isn’t there.

Even if broadcasters could throw a switch tomorrow and put one of these services on the air, who would buy them? TV broadcasters will face an uphill battle against established service providers in both niches and will be forced to convince their current viewers and non-viewers that this is essential, better than the others and worthy of their money.

Good luck with that…