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How Will ATSC 3.0 Impact Local Television?

February 12th, 2018   ||    by Charlene Weisler   ||    No Comments

ATSC 3.0 has been receiving a lot of buzz at industry shows like TV of Tomorrow and CES. Described as a game-changer, this new protocol promises advancements that will enable interactivity on-demand for over-the-air local television.

Experts from the field are often bullish but admit there will be a lot of disintermediation, disruption, and transformation that—at least for the short term—could create uncertainty. Here are some of the anticipated pros, cons, and in-betweens.

Further Consolidation

There could be additional local consolidation by companies like Tegna and Sinclair Broadcasting, which might “enable those companies to streamline content production, content delivery, programmatic buying, and ad delivery from a central location,” said Tracy Swedlow, co-founder and chief executive officer at TMRW Corporation.

This could work well for advertisers by creating cost efficiencies and new opportunities for monetization, but could remove the local feel by leaving office operations to be conducted outside the market.

How this might impact the actual behavior of local viewers remains to be seen. But there’s the possibility they may gravitate toward local news apps for up-to-the-minute content. Marketers should be careful of spoiling the local flavor of their brands.

A More Level Playing Field

Caroline Horner, co-founder of Spicy Tequila, sees ATSC leveling the playing field with multi-channel video programming distributors (MVPDs) regarding the services stations can provide and the data that can be harvested. But the SmartTV original equipment manufacturers (OEMs)—along with those of other devices and delivery streams—could become the ultimate gatekeepers of the consumer data and assert control over the screen.

Horner also noted the implementation of the new protocol will enable local broadcasters to attract a younger audience by “fitting in cost-effective, always available, on-demand content and live events.”

This is backed up by recent research by strategy and research company Magid, which found that the seamless interface possible with ATSC 3.0 is the top feature of interest to millennials, along with the ability to provide a pristine signal and high picture and sound quality for new 4K Ultra HDTV sets. Magid also found that millennials and “plurals,” the generation born after 1997, liked the ability to combine streaming video services into a single interface that allows viewers to seamlessly switch between streaming video services and live TV.

Different Competitive Advantages

The advancement of the new ATSC protocol in conjunction with the release of 5G may prove to be a perfect storm locally as providers experiment with different business models to maximize value and consumers grapple with a broader choice of content consumption options.

“Local TV and OEMs appear to be the big winners for ATSC 3.0, but the 5G and solutions for connectivity suggests the telcos and mobile devices could have as great of an impact on local TV,” said Horner, who added, “One doesn’t need a broadcast license to effectively reach a market.”

For Bill Hague, executive vice president at Magid, it’s the technological and data-driven applications that “will allow broadcasters and their partners to gather audience activity data and allow companion screens to host additional content related to what is shown on the primary screen.”

Where Programmatic Fits in

Scale has been a challenge for local programmatic companies, but the promise of one-to-one addressable advertising adds another arrow to local advertising’s quiver.

In Mediapost, Shereta Williams, president of Videa, noted the “Near-term [TV] spot isn’t going to be one-to-one. But programmatic can complement that one-to-one with branding and awareness. They’ll have the best of both worlds: broad reach, the ability to target, and go one-to-one.”

The introduction of ATSC 3.0 will offer added choice and enhanced services to viewers, greater opportunities to advertisers, and competitive advantages to local stations. The road to get to this perfect harmony requires careful coordination, the roll-out of new hardware, and the consolidation of new datasets. This is where local television stations can play a pivotal role.

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