[opendtv] Re: News: Reps. Barton, Stearns Offer Alternative DTV Bill

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Wed, 4 Feb 2009 10:28:12 -0500

At 1:42 PM -0500 2/3/09, Manfredi, Albert E wrote:

 > And predictably, the ATSC standard is now largely becoming

 irrelevant as is TV broadcasting in the U.S.


(It's very relevant to me. It's the only way I get TV, aside from
low-bandwidth, low-quality Internet TV.)


What I meant to say is that people like Bert are becoming irrelevant...

;-)

Sorry Bert, but it is so easy to pick on you!
Yesterday was a very bad day for the media conglomerates as Time Warner and Disny announced their results for the recently ended quarter and last fiscal year.
Time Warner took a $24.2 BILLION write down to reduce the carrying value of goodwill and intangible assets. Much of this write-down in value was related to AOL, but other divisions of Time Warner were over-valued (and most still are). Advertising revenues were down across the board, and the outlook for 2009 is flat when compared to 2008 earnings per share of about 60 cents. Personally i expect TW to take another big write off at the end of 2009.
Meanwhile Disney reported a 32% decline in quarterly profits, driven by downturns in almost every area of operations. Operating income in the Broadcasting sector decreased $205 million to $138 million for the quarter, as advertisers pulled back. 

Why did advertisers pull back?
For one thing the economy, and the financial woes of the automotive sector, which accounts for a big chunk of FTA TV advertising at the national, regional and local levels.
For another, the precipitous ratings declines that are being experience by ALL of the Media conglomerates.
And finally, the shift in viewing habits away from OTA/Multichannel to Internet.
Your problem Bert, is that the financial basis for FREE TV and Radio for that matter is based upon advertising revenues. For decades the industry had been able to push up the cost per thousand viewers even as the number of viewers declined. Now the air is coming out of that balloon, as advertisers shift their budgets into more efficient methods to reach consumers, including interactive web sites that provide vast amounts of information compared to a TV ad.
If the TV broadcasters were to lose retrans consent revenues, many would be forced to pull back dramatically and some would simply go away. IF the trend toward ala carte viewing/purchase of entertainment via the Internet continues, both Broadcast and multi-channel may topple under the weight of the "goodwill" that they have built into their books over the years. 


I doubt ATSC has much to do with this "relevance." I think the problem
is that even before talk about DTT started anywhere, i.e. even before
1991, the US was being cabled up for subscription TV. I don't think that
DTT usage is limited in the US *by* the ATSC standard. More like, people
are willing to spend the money for MVPD dependency. And MVPDs use other
(very similar) protocols in their walled gardens.
The ATSC was simply a convenient "Trojan Horse" for the long ride into the sunset for the broadcast TV service. Broadcasters COULD have elected to compete with cable and DBS, creating a standard that would allow them to deliver 30-40 high quality channels per market.
They chose POORLY, electing instead to place their bets on multi-channel and the revenues from retrans consent. They will ride into the sunset (or over the cliff) together, as consumers move to ala carte consumption of media downloaded from the Internet. 



I think where you come from is that ATSC might be preventing the TV
frequency bands from being grabbed by other, competing interests, that
have nothing to do with TV distribution.
Well it certainly started out that way. And no doubt, the recovered 700 MHz spectrum will be used to deliver entertainment services that compete with broadcasters and the multi-channel services.
But it is less clear that the remaining broadcast spectrum will bring comparable revenues to the politicians when it is recovered. Technology is making spectrum less of a scarcity - we are now able to exploit bands that were unusable a few decades ago, and we are beginning to use spectrum MUCH more efficiently through intelligent network design.
All this could change if there were a new wave of innovation in the TV business, however, there does not appear to be anyone ready to become the Pied Piper to lead broadcasters away from the cliff. IF and when someone does step up to this opportunity, the first thing to go will be the current high powered, big stick transmission model - a distributed transmission model with MUCH higher spectral efficiency (via spectral re-use) will be necessary to provide a new infrastructure that can leverage and become another lane of the Infomation Superhighway. 

Regards
Craig


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