‘Mechanisms’ Exist in ATSC 3.0 to Draw Viewer Data From Receivers, Says Sinclair
Through ATSC 3.0 receiver technology that Sinclair and One Media are developing, TV stations will be able to “capture significant and meaningful information relating to the consumer’s actual viewing and consumption behaviors,” saving broadcasters the cost of “expensive third party measurement services” that yield “questionable results,” Sinclair said in a Monday announcement. The addressable ATSC 3.0 receiver designs will use “the same bits that flow across the internet,” and that's what makes the initiative “so universally attractive,” Mark Aitken, Sinclair vice president-advanced technology, told us.
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Properly enabled ATSC 3.0 receivers will give TV broadcasters “the ability to understand where viewers are coming from, how long they’re staying, where they’re going to,” Aitken said. “That on a real-time basis allows you to steer the nature of the services that you offer,” and give advertisers the ability to test addressable marketing options, he said. Viewer data collection will be done “in an anonymized sort of way” to avoid breaching privacy concerns, he said: “No one’s breaking privacy over any of this.”
Sinclair is paying “tens of millions of dollars for somebody to tell us what they think people are watching,” Aitken said of Nielsen. “If nobody else is taking on this effort, we’ll take it on because it’s worth real money to us,” he said of an ATSC 3.0-enabled viewer data collection capability. “When you have a deployment of 3.0 beginning in the next year and a half to two years, we want to ensure that the devices that end up in the hands of consumers are capable and functional and offer a quality of service that has been lacking in the past.” A Nielsen spokesman declined comment Wednesday.
It’s “clearly the case” that the DTV standard “we’re going to move away from has been a less than ideal carrier of broadcast content,” Aitken said of ATSC 1.0. “We have to define the nature of the receivers of the future.” The “RF environment” for ATSC 3.0 receivers “is going to be more harsh than ever” because of factors like the spectrum repack and the “adjacencies” of LTE and “the spectrum right next door,” he said. “We want to make sure that in those environments, there is an ability to accredit, if you will, the viewing numbers that can be drawn off of those devices.”
The “mechanisms” already are “specified” in the ATSC 3.0 suite of standards “to draw the data out of the devices,” Aitken said. “But how it is implemented” isn't part of ATSC 3.0, he said. “The funny thing about standards is they tell you functionally what something must do, but they don’t tell you how to do it. In a real-world, real-market situation, that’s a good thing, because what it means is that innovation goes on, that product gets better as markets grow.”
Sinclair and One Media have “laboratory activity that’s underway” to soon do field trials of addressable ATSC 3.0 receiver designs, Aitken said. “We’ve assembled a capable team of top-notch receiver designers that are investigating the best way in today’s reality of designing a receiver” that can function reliably in “multiple environments,” he said. “We intend on having a specification, which we’ll bring to the broadcast community. We’ll come to consensus. And rather than just hoping that people will build devices that work, we’re going to specify the nature of the devices that are going to work on our networks. And we’re going to seize control.”
Though Sinclair has worked with Samsung on an ATSC 3.0 memorandum of understanding for the past 15 months (see 1506170046), “we’re not being exclusionary” to choose CE partners for “plowing forward” on receiver design, Aitkin said. “We’ve got a good working relationship with LG. We’re working with everybody. This is too big of an issue.”
ATSC 3.0 as a standard won’t have “a bow around it” and be “totally complete” until year-end, said Sinclair Chief Financial Officer Christopher Ripley in Q&A on the company’s Wednesday earnings call. After that, “patent pools and negotiations will start in terms of what the economics around the IP are,” he said in reply to a question about how soon Sinclair expects to start seeing ATSC 3.0 revenue flow in. “Our stake in that process is driven by patents, the first of which are starting to get granted,” said Ripley, who will become CEO Jan. 1 (see 1611020002). “I expect most of that patent activity to be weighted” in late 2017 and into 2018, he said.
Ripley said “you know how long these things take to figure out,” and he doesn’t expect ATSC 3.0 revenue to have “a material impact” on Sinclair earnings in 2018. “Progress within ATSC 3.0 has been very encouraging.” Korean broadcasters and CE manufacturers plan to start rolling out ATSC 3.0 services and products in February, he said. The pricing of ATSC 3.0 products in Korea and “our stake” in the Korean launch “has not been figured out,” he said. “There is essentially accrued income, if you will, starting to happen in 2017, that will be owed to IP holders, including us, at some point in the future when the economics are figured out.”