CBS says it will be getting a billion dollars in retrans and reverse comp from TV station negotiations. Station revenue has been climbing out of the hole the economy dug for most everybody. And TV stations are still the top destination for local news by various measures.
So it would seem broadcasters have a lot to live for, as National Association of Broadcasters President Gordon Smith argued in these pages not long ago.
The forces marshaled against that broadcasting future are just as adamant that all of that is old news, essentially about the migratory pattern of dinosaurs headed for the tar pits.
Cell phone companies and consumer products manufacturers say the airwaves are essentially wasted in the hands of broadcasters, an aging technology that needs to make way to allow thousands of apps to bloom.
Even cable operators and phone companies are ganging up on over-the-air TV. One study introduced to the FCC two weeks ago as part of its review of retransmission consent rules took off the gloves and delivered some tough shots.
The FCC will likely get the authority to pay broadcasters to exit, since that authority will also allow the government to pay for and build an interoperable broadband safety communications network in the shadow of the tenth anniversary of 9/11, which is a big political motivator for action on that issue.
Some broadcasters will want to cash out, particularly venture capital ! rms looking to " ip and move on. But others have vowed to stay. CBS, for one, has declared it is not interested in selling out.
As broadcasters gather in D.C. this week for their annual Service to America gala saluting the best of broadcasting, here are some of the reasons broadcasters should want to stick around, and their audience should be rooting for them.
POTS: As in plain old television service, or in this case, not so plain, not so old television service. Broadcasters ! nally have the digital service, including bandwidth-hungry HDTV, they worked for more than a quarter century to get into TV homes less than two years ago. That’s when broadcasters switched to digital and the government wrapped up a billion dollar-plus effort to ensure broadcast service for the elderly and minority and lower- income folks who are disproportionately consumers of over-the-air TV. The same arguments the government made for taking care of those viewers would still apply today. Not everyone can afford pay TV, and that number appears to be growing in a down economy. Cord-cutters and “cord-nevers,” people who never subscribed to a TV service, are on the rise. That may be partly due to migration to over-the-top rather than over-the-air video, but even if 90% of viewers don’t get their TV over the air, millions still do.
The Exploding Hispanic Population: According to the census, the fastestgrowing population in the country is the Hispanic market. As Univision pointed out in defending its broadcast life to the FCC, a big chunk of those viewers are over-the-air only. In Los Angeles, that figure is 30%. In Houston, it’s 44%; Dallas, 50%. “The most rapidly growing segment of the U.S. population relies heavily on over-the-air television,” says Univision.
Local News: TV stations continue to be the go-to destination for local news, even with the countless Web-based news operations (and local cable news outlets) that have sprung up to populate the vaunted broadband space. A Pew Research Center Study last fall found that 50% of the news audience watches local TV news regularly, topping all other sources. The FCC’s own future of media guru Steve Waldman said recently that local TV news is “more important than ever.”
Broadband: Yes, broadcasters can be players in the broadband delivery business by using their spectrum to handle cell traffic at peak times, that is if the FCC would clear them to make those deals directly. Sinclair, for one, and Capitol Broadcasting for another have argued that the FCC should not hand cellular phone companies the keys to the spectrum Lexus that is the broadcast band, particularly when that means handing it to a “handful of extremely large national providers that are consolidating,” as Sinclair told the FCC. Instead, they argue, broadcasting is the only way to meet the demand for mobile video, something they say the wireless carriers themselves concede. “Since a broadcast architecture will be required to meet demand, there is no public policy rationale to take spectrum already allocated for broadcasting and assign it to wireless providers who will develop their own broadcast capability.”
Emergency Communications: This is not just playing off the recent horrific tornadoes. And we know the NAB is always touting broadcasting as a lifeline service that remains vital in times of emergency. But that’s because it is. While an interoperable broadband emergency communications network is still likely years away, broadcasters have been supplying life-saving information for decades. Turn on CNN during the recent tornadoes, and often what you were watching was footage from local TV stations with rain boots on the ground tracking storms and warning residents to take cover.
Mobile DTV: Broadcasters have started rolling out mobile service using some of that 6 MHZ of digital spectrum. They will need to be able to deliver their local programming to mobile devices to remain a competitive video service, and they will need spectrum to do that.
Multicasting: Broadcasters are delivering news and weather and minoritytargeted programming and adding network affiliates in smaller markets. Bounce TV and ABC’s Live Well Network are just two examples of leveraging digital spectrum into multiplatform offerings; both services have been gaining station channel deals in recent weeks. The more relevant multicast channels they can muster, the stronger their case.
3D TV Anyone: OK, at the moment the DTV transmission standard does not support broadcast delivery of 3D, but one in the works does, and it will take spectrum to deliver. At B&C’s recent Connected TV and 3D conference, one executive pointed to an anticipated five-fold increase in the number of 3D sets sold this year. And who knows, if the ! lm industry’s growing 3D pro! ts are any indication, maybe 3D could be the next HD (yeah, we don’t really think so, either)—which takes spectrum, too, as we may have mentioned.
ROI: TV stations spent hundreds of millions to remake their business for the digital switch, and under the assumption that they would be able to recover those costs through continued operations like multicasting and mobile DTV. There has been some suggestion from Capitol Hill that broadcasters may not get “full value” for their spectrum when they give it up for wireless.
To Spite Their Foes: OK, this one is a visceral reaction to the harshness with which some of broadcasting’s critics slam them. Broadcasters should stick around because it seems to stick in the craw of those looking to take them behind the barn and put them out of their misery. The Consumer Electronics Association has branded them “squatters,” while veteran spectrum reclaimer Tom Hazlett, in an essay commissioned by cable operators and phone companies and satellite operators and others trying to lower broadcasters’ growing retrans take, dismissed them as “a needless expense, propped up not by customer demand, technical efficiency, or business necessity, but legacy regulation generations outdated.” That is an “ouch” that broadcasters can turn into a “touché” by sticking around and showing them that, like Mark Twain’s observation of the premature publication of his obituary, “reports of my death have been greatly exaggerated.”
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