At 3:03 PM -0400 7/28/08, Mark A. Aitken wrote:
So what if there were money to be made EXCLUDING new business? (not my words) 135 million cell phones and$2.0B annual total ($1.1 annual local market station take) based just on additional ad revenues. (not my numbers)Just thought I would point out this study...
Thanks for the pointer.The first question that the study raises is what about non-broadcast competitors? Does the study assume that the telcos approach - i.e. selling subscription TV services is a non starter?
Second, is there a cost associated with getting manufacturers to support the ATSC M/H standard on 130 million cell phones and 25 million portable M/H devices?
I raise this question since the radio industry is spending nearly a billion so far to promote HD radio.
Now a question for Mark.Let's assume that the study is correct, and that stations can expect $1.1 billion in new ad revenue.
Advertisers are already having problems justifying existing OTA TV ad rates. So an increase of 1.1 billion in ad spending must be justified with some real numbers. I would assume that this is based on the assumption that the M/H service will bring additional eyeballs to advertisers.
So the question is, how many new viewers will be needed, and how many hours per week will they need to watch, to justify the expenditure of $1.1 billion by advertisers?
The demos we saw were mostly existing syndicated programming. We have some fairly reliable data on the audiences that these programs now deliver. How will we know what percentage of viewers will simply use "device shifting" to keep up with their favorite shows. That is, is there any gain for advertisers if a viewer uses the new M/H service in place of the existing service for fixed receivers.
And all of this does not even take into consideration the possibility that there will be additional programming related costs to develop content for the M/H services. Or that content owners will expect additional compensation (or limit availability of their content) for the M/H service.
For example, I can easily imagine that viewing live sporting events via M/H will be a significant market. Will rights owners allow broadcasters to offer a sporting event that is carried on the main 8-VSB channel AND the new M/H service, when they are charging the telcos for the right to offer the same event via a subscription package?
Marketing research of this type is always a crap shoot. There are simply too many variables at work here to know what will happen with any degree of certainty.
My biggest concern is that broadcasters are not considering the true costs to develop the M/H service, or the cost and difficulty to get other industries to incorporate the M/H receiver technology into their devices.
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