If there were any doubts that streaming TV has finally hit its stride in 2024, NBC was ready to knock them down this month.

Although the network didn’t break out the share of 2024 Olympics viewing split between its three platforms—Peacock streaming, broadcast TV (NBC, Telemundo) and its cable channels (such as USA Network, E! and NBCSports)—the company’s enthusiasm about Peacock’s performance from Paris underscored the growing perceived value of streaming video in the media mix. NBC crowed that the 23.5 billion minutes of Paris Olympics coverage streamed via Peacock during the games, July 19-Aug. 11, was up “40% from all prior Summer and Winter Olympics combined.”

(Read: Peacock Signed-Up 2.8M Subs During Olympics)

NBCUniversal Media Group Chairman Mark Lazarus said the streaming usage “marked a groundbreaking moment for Peacock, which delivered …cutting-edge innovation while shattering all-time Olympics streaming records.”

The Olympics streaming victory lap surfaced amidst a marathon of other developments that illustrate the hurdles and leaps that face the industry. Days after NBC’s declaration of streaming success, a Federal court in New York issued a preliminary injunction to stop Venu Sports, the joint venture streaming service from Disney, Fox and Warner Bros. Discovery, which had planned to launch in time for the NFL season.

‘Wait and See’
These developments emerged just after Nielsen’s latest “The Gauge” report, which calculated that 40.3% of TV viewing is now watched on streaming platforms, followed by cable (27.2.1%) and over-the-air broadcast (25.5%). The streaming share was up from 37.7% a year earlier in Nielsen’s analysis of how Americans watch TV across platforms.

Collectively, this summer’s avalanche of streaming exuberance (and stumbles) mirrors the ways that the buzzy business of video streaming is taking off in countless directions. At the same time, dozens of challenges are becoming apparent in this latest competitor to (or collaborator with?) broadcast TV. They encompass technology, economics, legal/regulatory issues and consumer preferences for ad-supported programming vs. paid content.

The emergence of Venu, the proposed $42.99/month bundle of streaming content has been a major source of enthusiasm. Its program package is intended to include ABC, Fox, ESPN, TNT, TBS programs and by extension a slew of major football, baseball, basketball and hockey league games. Analysts are waiting to see how it will fare against alternatives such as the Xfinity StreamSaver bundle that Comcast is assembling by bringing Peacock, Netflix and Apple TV+ into one $15 per month package.

Rick Ducey, managing director of BIA Advisory Services, who analyzes the migration of media platforms, characterizes the current situation as “a very complicated environment for everyone to navigate.” He cites “nearly 2,000 streaming services available to consumers configured, bundled and sold across various platforms, publishers, and content aggregators.”

Ducey observed that industry providers and consumers are evaluating the very different business models that are available.

Other analysts offer similar perceptions of the cloudy near-term outlook. “This environment makes it challenging for consumers to keep track of what they are spending, which causes a great deal of frustration,” says Adriana Waterston, executive vice president and insights and strategy lead at the Horowitz Research Division of M/A/R/C Research. “This is why churn has been such a big issue.” She points to data showing that “consumers navigate these costs by timing which services they pay for when.”

Waterston sees the decision-making process about streaming tied to viewers’ “increased expectation for content that reflects [their] identities and views on the world,” and said she expects an even “bigger impact” if and when Venu debuts as “sports fans get a sense of the breadth of content this service could offer.”

In her firm’s recent research, 42% of sports fans said they would subscribe [to Venu], and among those who were likely to sign up, 38% said they would likely make a change to the other services they get because of it.

NBC, in its post-Olympics victory lap, pointed to streaming video’s ability to give viewers what they want to see. Peacock’s “Gold Zone,” a compendium of whip-around coverage of each day’s Olympic highlights, consistently ranked among Peacock’s top five most-watched Olympics segments and nearly quadrupled its viewership during the two weeks in Paris, according to NBC’s analysis.

One in five Olympics viewers tuned into “Gold Zone” and more than a quarter of Olympics viewers on Peacock watched via “Multiview,” with half of their time spent on featured live events, and half watching the “quad box” view of multiple events.

Churn Concerns
Yet in the deluge of viewer research, an unsettling picture emerges. In Xperi’s latest TiVo Video Trends Report, 20% of consumers said they believed “they have too many services.” The study found that at the end of 2023, the average home used 11.1 services (down slightly from 11.5 a year earlier)—but that the number of free services increased while paid services declined year over year.

Parks Associates also identified a 30% decline in spending on streaming services since 2021. Current spending is about $64 per month compared to $90 monthly three years ago, according to Sarah Lee, a Parks research analyst. “Consumers are spending less, but rather than go without, many are using ad-based alternatives to save on costs,” Lee said. “A service needs to provide unique and ongoing value if it is to charge a premium.”

Separate research by LG Ads indicates that 80% of viewers watch Free Ad-supported Streaming TV (FAST) channels and 63% prefer this format to other on-demand formats.

And that leads to questions about what viewers want to see on streaming channels.

MoffettNathanson media analyst Michael Nathanson, in a mid-summer evaluation, examined a shift away from original content, which had established Netflix in its early years. Now, Nathanson said that Netflix, along with Paramount+ and Warner Bros. Discovery’s (WBD) Max, are showing streaming gains even “as they released less content.”

“The market has shifted to allow the company to drive an increasingly large share of its viewership with its competitors’ content,” Nathanson said. “This is reflected in acquired titles’ (and especially nonexclusive acquired titles) rapidly increasing share of the list of top streamed titles.” He pointed out that only two of the top 20 most-streamed shows on Netflix in Spring were originals.

Seth Skolnik, chief operating officer of Vivid Labs, draws on his experiences at Paramount, Technicolor and new media start-ups to conclude that the bubble has burst. “We already see a significant decline in new show production, smaller deals, and only with established showrunners and stars,” he said. Buckle your pants, we are all going on a diet.”

BIA’s Ducey is also trying to interpret how streaming customers’ viewing preferences will affect future production and distribution. “Content investment strategy has shifted towards more focused content offerings such as TV shows and films in genres like action, medical or police dramas, international series and films, live sports [and]… science fiction,” he said. “The total investment in content and number of titles produced may have reached a limit for now as streaming businesses rationalize” growth and profitability metrics.

“Cross-platform (linear TV plus streaming) campaign planning, activation, optimization and improved measurement and ROI using relevant Key Performance Indicators will provide a lot of lift to streaming’s role in the local media ecosystem,” he added.

Caution: Lawyers at Work
As the content and marketing landscape takes shape, streaming is already facing increased legal scrutiny. Congressional forces are urging the Justice Department and the Federal Communications Commission to probe the Venu alliance with an emphasis on a potential antitrust violation in pooling sports league contracts of the several networks.

In the current legal challenge to Venu, plaintiff streamer Fubo claims it is being forced to carry dozens of channels in order to get licensing rights to the sports events.

“The FCC hasn’t regulated streaming services to date, other than in very discrete areas such as closed captioning,” explains Ari Meltzer, a communications attorney at the Wiley Rein law firm in Washington. He points out that there are already disputes about whether the FCC has authority over streaming video­—an issue that is being bruited around quietly on Capitol Hill. For now, oversight comes under other legal umbrellas, such as antitrust, contracts, copyright, and unfair and deceptive trade practices, Meltzer adds.

“There are tradeoffs: while streaming services don’t have to comply with the same regulations as broadcast and cable/satellite, they also aren’t entitled to certain benefits, such as statutory copyrights,” he added. “Most streaming services seem content trading the need to obtain copyrights for less regulation.”

Last week’s ruling on Venu from the U.S. District Court, Southern District of New York, has changed the momentum. There is no indication about how long the court’s temporary restraining order will stay in effect. Fubo, a nine-year old streaming service that concentrates on live sports (including NFL, MLB, NBA, NHL, MLS and international football), filed the lawsuit in February, claiming that Venu would control up to 80% of live broadcast sports content.

Venu’s owners said they plan to appeal the Court ruling.

Fubu co-founder/CEO David Gandler welcomed the ruling, saying “We seek equal treatment from these media giants, and a level playing field in our industry.” He cited the network and league that “monopolize the market, stifle competition and cheat consumers from deserved choice.”

Determining the Venu legal status “introduces a bit of a wild card” to the landscape, Ducey added. “If Venu does move forward and survives these threats, it certainly could [prove] how to bring some collaborative innovation to the market by trying to offer a ‘best-in-class’ sports experience to streaming viewers.” But he acknowledged that the high-value sports licensing rights could “challenge the viability” of Venu.

“Something has to give. Consolidation may help share costs but then partners stand to lose some competitive differentiation with their other direct-to-consumer and distribution platform strategies,” Ducey added. “It’s not clear how this nets out at this point.”

Meanwhile, Advertisers are Standing By
Central to many streaming providers’ programming and pricing decisions is the flavor of streaming video that appeals to viewers.

Among the options:

• AVOD (Ad-Supported Video on Demand)
• FAST (Free Ad-Supported Streaming TV)
• SVOD with ad-supported discount tiers
• TVOD (Transactional VOD, i.e., one-time rentals of a movie or show from Prime Video)
• PVOD (Premium VOD, additional fee for access to exclusive content such as major event or early-access viewing)

Add to that acronym jumble the emerging options for commercial operations, such as:

• CSAI (client-side ad insertion): ads aimed direct to customers
• SSAI (server-side ad insertion): ads put into video streams

Advertisers are evaluating the comparative values of CSAI, which enables more individual personalization to viewers vs. SSAI, which are less prone to disruptions or latency issues.

In its latest survey of viewer acceptance of ad-supported streaming, Hub Entertainment Research found that “an increasing number of TV viewers are accepting advertising in streaming video and they are readily able to discern the differences in how various services deliver the ad experience.” Hub said that “two-thirds of TV viewers would prefer watching ads if it saves on subscription costs” and the level of total ad intolerance has dropped from 17% in 2021 to 12% in June 2024.

Along with the ad-structure decisions comes a confrontation with a question that many media veterans fear: “Are we reinventing cable TV?” For example, the SVOD vs. FAST deliberation revives memories of the 1970s and ’80s introductions of ad-supported cable networks along with HBO, Showtime and other extra-fee “paid” channels.

Adriana Waterston of M/A/R/C calls content consolidation (such as Venu) into à la carte packages “the beginning of the new cable TV/multichannel bundle,” adding “I believe that at least from a value standpoint, this is what consumers really need, even if it’s not what they think they want.”

We’ve Seen This Show Before
In his 2024 memoir “Hits, Flops, and Other Illusions,” TV and film producer/director/writer Ed Zwick mused about Hollywood’s shift toward the economics of streaming.

The celebrated creator (“thirtysomething,” “Glory,” “The Last Samurai,”), laments that, “storytelling in this new age of streaming platforms seems deliberately crafted to create a new kind of anxiety designed to induce gorging rather than fulfillment, conversation rather than catharsis, consumption instead of closure.”

“The thoughtful has given way to marketable, and the complex idea replaced by the 15-second TikTok,” Zwick contends as he dissects Hollywood’s current “pressure to hold to …commercial viability” and the preference for “pre-sold IP [intellectual property] [that] can be marketed in a single sentence.”

After expressing his frustrations, Zwick kvetches that the modern Hollywood approach is “to aim low and hit the target.”

RANCHO MIRAGE, Calif.—Although “Innovation” and the phrase “Let the Sparks Fly” were the themes  of the 2024 HPA Tech Retreat, several of the most perceptive sessions involved looking back— be it for a month, a year or decades into the archives of the moving images industry.  Each presentation offered perspectives and outlooks that will affect the TV and video industries in the years and decades ahead. 

HPA President Seth Hallen summed up the pertinence of these times when he cited the over-arching topic of one day’s sessions. He called artificial intelligence a “fundamental transformative change” which is “different” from other technologies that have affected the media industries. “Don’t fear AI,” said Hallen, who is  co-Managing Director of Light Iron; he urged the Hollywood Professional Association audience to find ways to use AI “to enhance the human touch” and explore the “ability to integrate these tools” into productions.

His support of AI underscored the reflective presentations that chronicled recent industry developments.

For example,  Mark Harrison, CEO of DPP, focused on the dominance of AI at January’s CES (formerly known as the Consumer Electronics Show) in Las Vegas. Digital Maestro Mark Schubin also cited AI in his wrap-up of 2023’s industry-shaping developments. A panel of media archivists examined AI’s value as a tool to safeguard and search content. And Eluvio’s Michelle Munson acknowledged AI’s role in establishing and maintaining trust throughout the production and distribution process.

 Software—Especially AI—Dominated CES
Artificial intelligence is “finally a technology worth shouting about,” said Mark Harrison, CEO of the DPP [Digital Production Partnership], an international network of media and technology developers, as he began his review of January’s CES. After the pandemic downturn, CES is “again reassuringly unpleasant to be at,” Harrison joshed as he plunged into the otherwise predictable roster of top technologies from the mega-show (smart homes, wearables, robotics, automotive) described in the 100+ page CES report his company just published.

He called the market for consumer TV receivers “as flat as its product.”  The global market for such devices is now about $97 billion and will fall to $96 billion by 2028. “Of course, those TVs get incrementally better each year, as the latest technology gets cheaper, and is standardized.”  He pointed out that content providers already struggle to supply media to a technical specification that matches the capability of the TV’s on which that content is consumed.

Harrison, who founded DPP, previously held senior roles at the BBC and in independent production. His over-arching perception of CES was that “software has become more important than hardware”—a stunning reorientation of a trade show long known as the gizmo and gadget bazaar.

 “Software is killing consumer electronics,” Harrison told the HPA audience.

 One prominent factor in DPP’s evaluation was its “heat map,” which tracks the buzz and growth of innovative products in more than two dozen categories over the past 15 years. The line for high-end displays has been chilly for the past few years, and the smart TV trajectory has become almost frozen. 

Harrison explained that DPP has seen its heat scores in video technology as “modest” and determined that, “we were in a period of pragmatism.  The emphasis seemed to be on making existing technology work better for consumers and businesses alike, rather than hyping  up the new.”

DPP’s report summarizes that, “This year our heat scores are the coolest ever” which may indicate “actual maturity.”   But the analysis also cautions that, “The picture is more complicated.”  It suggests that the reason for the “sense of disappointment” at CES stems from the absences of new tech this year, but then asks, “When something isn’t boiling,  is it cooling down or hotting up?”  Harrison contended that something new may be brewing, but he did not speculate about specific forthcoming products or services.

As for AI,—the #1 topic at CES – Harrison called it “a revolution hiding in plain sight,” although now it is “stranded on the shoulders” of giant providers who are “confident about being able to deploy generative AI.”  But he noted the “AI problem”: innovation requires investment, and he expressed concern about the impact of negativism and financiers’ trepidation about the risks (political and otherwise) regarding AI.

Schubin’s Intelligence
Earlier, Mark Schubin, who calls himself the “Program Maestro of the HPA Tech Retreat”—in his summary of 2023’s key developments—also acknowledged the onslaught of AI, although he called 2023 “the year of Intellectual Property.”

Schubin, the Emmy-winning long-time technology overlord of the Metropolitan Opera’s video production, cited the evolving role of Digital Rights Management (DRM) as an emerging barrier to home recording.  He pointed to developments involving ATSC 3.0 that could enable broadcasters to prevent their signals from being recorded. 

Schubin’s broad-ranging summary of last year’s developments included products such as the Sphere 18K Big Sky Camera, Canon’s Metalens, Apple Vision Pro (and the headset Virtual Reality category) plus the emergence of quantum dots as a new image and transmission feature.  

Although he did not elaborate on these products or forecast their successes in the marketplace, Schubin did cite problems he has seen in some streaming content, such as “dark screens.” He also indicated that the many variations of artificial intelligence—with all their benefits, hurdles and hallucinations—will continue to play a larger role in the video production industry.

Digitizing Archives: Do It Now
Looking further back—while emphasizing future values—a panel of media archivists in a coordinated presentation explained “Why Right Now Is the Time to Digitize Your Archive.”  They explained that in 20 years, more than four million hours of TV and movie content has been digitized, but that the pace has picked up so that last year, more than seven million hours was preserved—nearly double the sum of the previous two decades.

The panelists—representing an array of experiences in production and the history of the TV and film industry—included Carin Forman, Global Partner Lead for Media and Entertainment, Amazon Web Services  (moderator); Heidi Shakespeare, CEO, Memnon Archiving Services; Andrea Kalas, SVP-archives, Paramount Pictures and Linda Tadic, Founder/CEO of Digital Bedrock.

“Content Discovery has forever changed,” the panelists concurred, citing tools such as OpenAI CLIP (Contrastive Language-Image Pretraining). They described CLIP’s multimodal AI model that combines knowledge of English-language concepts with semantic knowledge of images to power video semantic search, image classification and other factors.

The panelists cited the burdens of archiving, especially “technology obsolescence” which means that playback devices and preserved files are not available. They pointed out that, for example, most surviving VTRs operate on refurbished heads with parts scavenged from “donor machines,” thus reducing the equipment pool further. Moreover, “Knowledge Obsolescence” is already appearing as engineers “with the requisite skills are nearing retirement and attracting younger generations is a challenge.”  

Their side remarks underscored the often-unexpected values of being able to track digital assets.  For example, Tadic explained that when she worked at HBO during the first season of “The Sopranos,” no one really knew that the show would become such a landmark success. She recalled that the outtakes “reel” from the first shows were deliberately destroyed—footage that could have become valuable after the eventual success of the series.

Finally, they warned that, “Just because it’s digital, doesn’t mean it’s preserved.”

"Digital preservation requires ongoing care and management,” they said. “There is no ‘store and ignore’ medium. Migration is necessary to keep your digital content alive.”

Managed digital preservation involves planning, policies and processes, the archivists insisted in their joint presentation.

Establishing Trust
Michelle Munson, co-founder and CEO of Eluvio, described the security vulnerabilities of digital content, including problems that can develop via the “conflation of storage and rendering”—factors of the AI process.  Berkeley, Calif.-based Eluvio has developed the “content fabric protocol,” an open and decentralized, streaming, content distribution, and storage network built for the third generation Internet.

In her HPA presentation on “Content Authenticity and Provenance: Protocol vs. Workflow,” Munson acknowledged that storage formats can be “very kludgy” and contended that the “claims generator is outside the control loop.”  She supported the use of blockchain (which Eluvio supports) as a way to “take care of distribution over decentralized networks.”

Munson, who has been involved in establishing the Coalition for Content Provenance and Authenticity, explained that C2PA’s specification is intended to codify procedures and to “establish trust” in digital distribution.

What lies ahead is often more important than what just happened, and the media technology developments of 2023 augur plenty of upheavals in store for 2024. 

Despite the flurry of streaming and artificial intelligence activity, the comatose NextGen TV inactivity and the shape-shifting Hollywood strikes, the past year has largely been a quiet period—typical of a transition presaging a looming overhaul in the production and delivery of video content and paving the way for whatever comes next.  

As usual, the major topics overlap and interweave in an irregular pattern of business relationships that are intensely affected by technological, financial and regulatory factors. 

For example, the dominance of streaming video arrives along with ownership changes (such as Disney’s acquisition of Comcast’s share in Hulu) and a reevaluation of retransmission consent rules and fees as they apply to streaming carriage of TV shows. Similarly, the frenzy about Generative Pre-trained Transformer (GPT)—a core tool of AI—became a critical negotiating element in the TV actors and writers’ strikes. 

The emerging opportunities in 5G broadcasting reflect the dominating role of video in the mobile communications sector, but also raise competitive questions about which industry (legacy broadcasters or mobile carriers) will dominate in these ventures. Such uncertainties tie into the evolving issues of targeted advertising and the concomitant shifting audience attitudes toward media and marketing. 

Moreover, the connection between cord-cutting and retransmission consent was apparent in the Charter Communications (Spectrum TV) stand-off with Disney (ABC/ESPN) at the start of the college football season. The overall cable churn rate at the six largest Multiple System Operators grew from 7.5% in Q3 2022 to 9.3% during Q3 2023, according LightShed data—and that underscores the migration from cable to streaming options.  

Change is afoot.

Even in this turbulent yet intertwined media evolution, a handful of topics emerge as benchmarks for the new broadcasting landscape: 

Streaming: FAST Growth but Still Finding Its Way
Streaming video is now the dominant viewing option, according to Nielsen and several other audience studies. In a report released last summer, Nielsen said that 39% of viewing time was spent on streaming, while cable channels gleaned 30% and broadcast had 20% (the “other” 11% included gaming and DVDs). Although the streaming tally may have been inflated by summer doldrums, Nielsen’s historical data showed the continual shift towards streaming options.

And there are plenty of choices, although aside from the biggies (Netflix, Hulu, YouTube TV, Roku, Disney+), streaming channels seem to come and go.   

In November,  Jonathan Katz unveiled plans for “Free TV Networks,” which will deliver free over-the-air and streaming channels, starting with digital broadcast channels such as “The 365” aimed at African-American viewers and “Outlaw” (Western programs).  

At the same time, streaming bundles are popping up in endless configurations. For example, Verizon’s wireless service recently discounted Netflix and Max (formerly HBO Max) when bought together, and all the major streamers are toying with ad or no-ad versions: Netflix with commercials costs $6.99 per month, while its lowest priced ad-free version costs $15.49.  Likewise, Amazon automatically puts commercials into Prime Video unless subscribers pay $2.99 per month to squelch them. 

An analysis in October found that 47% of U.S. homes use a FAST (Free Ad-supported Streaming TV) service at least once a week. That was part of the Kantar Entertainment-on-Demand study which found that 120 million homes use at least one video streaming service.

Indeed, FAST has become the new benchmark in the streaming category with Netflix boasting 15 million monthly active users for its ad-supported subscription tier. FAST’s acceptance is also evidence by the growing number of programming alliances, such as the deal between Golf Nation and TV maker Vizio, which will put the golf events on its “WatchFree+” menu of its FAST on-demand smart TV receivers (connected TV). 

Meanwhile, fickle viewers are still churning galore. A TransUnion analysis found that 52% of subscribers canceled  a streaming service because of price increase, and 29% dropped off because they had finished watching a specific show on that platform. A similar number canceled “due to lack of new content,” and 17% admitted that they abandoned a streaming service because they got access to someone else’s credentials.

NextGen TV’s Roller Coaster Year
Is ATSC 3.0 (“NextGen TV”) the “AM Stereo of our age?” That cynicism spread throughout the year, especially after LG Electronics had to abandon production of 3.0 sets and broadcast networks continued their lackadaisical embrace of the standard. 

LG, which spearheaded NextGen TV receiver efforts, announced it would no longer include ATSC 3.0 tuners into its 2024 models after losing in court against Constellation Designs LLC, which claimed it held patents over some of the receiver technology LG used.  

LG’s retreat (albeit possibly temporary) fueled concern that other TV set makers would also back down, given the paucity of audience uptake—and despite pronouncements from the Pearl TV consortium that more than 10 million NextGen TV “capable” devices will be in homes by the end of 2023. (That sales figure amounts to about half the number of TV sets that have been sold annually in the U.S. during the past few years.)  

LG asked the FCC to intervene in the patent case, but the National Association of Broadcasters urged the commission to stay out, asserting that it does not have authority and that its rules would not resolve the problem.  The faceoff underscored the ongoing complexity of technical and regulatory inter-relationship.

On the other hand, broadcasters eager to switch off 1.0 have asked the FCC for help in establishing a deadline. FCC Chairman Jessica Rosenworcel responded with the formation of a “Future of TV” initiative at the NAB Show. The NAB has hosted a number of meetings and first reports should be forthcoming by next summer.

Despite the setbacks, NextGen TV promoters could boast that their TV signals are now available in New York City as well as another 75+ cities, with a dozen more markets (including Chicago and San Diego) “coming soon.”

Hollywood Strikes  
The dramatic (and sometimes comedic) Hollywood labor disputes involved a variety of issues that will affect the future of entertainment, and (since wordsmiths are performers and were at the core of these disputes) this is not the last word or final act. The artists wanted—and won—residual payments from streaming video productions and assurances regarding use of their likeness in future artificial intelligence-generated productions.

Although “talent” got what it wanted (to some degree), the longer-range effect is still unclear. Analysts expect that studios and networks will pare back the number of productions and make other financial cuts to handle the costs of these latest labor deals.   

Although the Hollywood strikes focused attention on the looming impact of AI throughout the media industry and society the resulting settlements barely just scratched the surface of AI’s potential role in the video and media category. Developers are already touting AI tools that can manage newscast production, create short-form videos (such as teaser promos) and maximize search-engine-optimization keywords and category placement plus social media presence.

Anna Chauvet, vice president-Public Policy for NAB envisioned what’s next in her May blog:

“AI technology brings immense potential for unlocking operational efficiencies in broadcasting when it’s used responsibly,” Chauvet said.  She cited, “efficiencies and operational help” for tasks such as scripting commercials, first drafts of content, speeding up transcription services and social media posts for on-air talent.

But Chauvet also reminded broadcasters of AI’s threats regarding use of copyrighted works plus its ability to distort and spread misinformation and urged that “responsible development and use of AI should ensure the integrity of our broadcasters’ work and the trust … [and should] adequately compensate broadcasters.”

‘Creator Economy’ Growing in Video Sector
Homemade videos have been part of the video ecosystem for decades, but thanks to TikTok, Facebook, YouTube and other social media, the broad “creator economy” has grown to a $250 billion business this year, and Goldman Sachs Research expects it could nearly double to $480 billion by 2028.  

In an April report, the investment analysts noted that increased technology has “lowered barriers to content creation” triggering more digital media consumption. The investment firm expects the current 50 million global creators to increase by up to 20% compound annual growth rate during the next five years, monetized by access to large pools of capital and fueled by “strong AI-powered recommendation engines,” which will match relevant content creators with interested users. 

Such new production sources (and distribution via video blogs and podcasts) bolster Goldman’s mega-billion-dollar forecast. The impact on legacy TV operations is expected to become significant. 

Ownership Overhauls
When the $8.6 billion merger of broadcaster Tegna Inc. (which owns 64 TV stations) into hedge fund Standard General was abandoned in May, analysts attributed the move to concerns that the deal would lead to higher prices for consumers and job losses. A planned FCC investigation into the acquisition led to a Standard General suit against the Commission, which was overturned. As part of the deal, Cox Media Group would have acquired several major market stations that Tegna owned. 

Although there was considerable finger-pointing about the culprits in this failed transaction, the plan has become a poster-child of the rearrangement of industry’s ownership. A few months later, Disney CEO Bob Iger indicated he may jettison some of the firm’s legacy holdings. Insiders believe the company will hold on to network brands best suited to streaming, including ABC and the Disney Channel. 

The recently conjoined Warner Bros. Discovery is also expected to focus on its holdings with the great streaming opportunities. 

5G Broadcast: Collaboration or Competition?
It’s hard to claim that the “jury is still out” on another alternative media option—5G Broadcasting—because the trials are still underway. 

LPTV station WWOO-LD in Westmoreland, N.H. (near Boston), is currently operating on a temporary special authorization to transmit programming and data via 5G. The station, licensed by Milachi Media LLC, began its transmission of a 5G signal over its licensed ATSC 3.0 facility in June. The test, which is scheduled to run through mid-January 2024, is intended to gauge the viability of a national 5G broadcast infrastructure for carrying data and emergency alerts.  

In a perceptive TV Tech analysis of the 5G Broadcast situation, Doug Lung raised a series of vital questions about introduction of the service: 

• Does it have the potential to replace ATSC 3.0?
• Will wireless operators who control mobile devices features permit 5G Broadcasting reception without a government mandate?
• How will it get into vehicles and older handsets?

Rick Ducey, BIA Advisory Services’ managing director, said in a Forbes interview that the U.S. broadcast and mobile industries are waiting to see if it’s possible to combine “multicast and unicast networks to offer integrated services over common devices.”

Apple Vision Pro: An Immersive Video Prelude to New Competition
Apple Vision Pro, a mixed-reality headset that the computer-maker unveiled in summer, is being promised as an “infinite canvas” for “entertainment experiences” as well as other home and office applications. 

Apple says that the $3,500 device can be used to watch movies and TV shows, including three-dimensional programs. Apple Immersive Video offers 180-degree high-resolution recordings with Spatial Audio. The headset, which will become available in early 2024, is being positioned to compete with Microsoft HoloLens and headsets from Magic Leap.  

Although not a broadcast receiver (yet), the capabilities of the visionOS – including a three-dimensional interface with “infinite screen real estate” could open doors to even more immersive production and display options.  Apple is also citing its ability to deliver “all-new ways to multitask.”  

The company claims that, “Apple Vision Pro can transform any space into a personal movie theater with a screen that feels 100 feet wide.”

Audience Disdain: Waning Trust in News, Hurdles for Ads
As elsewhere in American society, trust in institutions is in free-fall with media leading the plunge downwards. A Gallup survey in early summer found that public confidence in both TV news and newspapers were near historical lows, with many respondents questioning the honesty and ethics of journalists.  A new high of 39% of audiences have “no confidence at all” in journalists, Gallup found. 

Separately, Horowitz Research found that “younger consumers find ads in TV shows less effective” and that they “have pretty much gravitated away from ad-supported live TV.” Horowitz’s “State of Media, Entertainment, and Tech” recommended that advertisers should focus on targeted ad-supported streaming services to open “new opportunities … to re-connect with younger audiences through TV content.”

...And Some Final Words from Washington
The moribund FCC did what it could in 2023, given its limited ability with 2–2 partisan voting blocs until Anna M. Gomez was sworn in as a commissioner in September to bolster the Democratic roster. Meanwhile, an array of regulatory issues awaits federal action, including: 

Retransmission consent for streaming: Cord-cutting’s impact on broadcast income has popped up via several initiatives with members of Congress urging the FCC to find a way to make vMVPDs (virtual Multichannel Video Program Distributors such as  YouTube TV and Hulu) pay compulsory licensing fees to broadcasters akin to the current requirements for pay TV operators’ payments. 

Inevitably an advocacy group, the "Coalition for Local News" (600 local TV stations), was formed to demand that the FCC change how it regulates live streaming services.  Equally inevitable was the counter-move, called "The Preserve Viewer Choice Coalition" (YouTube TV, Roku, Disney, Paramount, NBCUniversal and others) which promptly declared such regulations as “laughable” in this era of “nearly unlimited viewing options.”

Blackouts: FCC Chairwoman Jessica Rosenworcel has floated a proposal to force cable and satellite operators to pay rebates to subscribers if MVPDs that blackout local broadcast stations.

The Biden Administration’s Proposal for a “National Spectrum Strategy:" unveiled in mid-November, is a long-term vision that will be hammered out by the Commerce Department, Defense Department and other agencies to develop mor efficient spectrum use and more spectrum sharing. 

Although the bandwidth under scrutiny does not include current TV spectrum, the proposal affects more spectrum than had been expected.  The study’s long-term impact is unclear and, as the White House pointed out, this initial exploration does not presume how any of the spectrum will be repurposed.  

These policymaking issues underscore the array of 2023 topics that are being tee’d up for further action.  And it’s anyone’s guess about how much will be done in 2024, which is already shaping up to be an ultra-contentious election year.   

When it comes to evaluating the latest developments in what is now perhaps the fastest growing segment of TV, the rapidly evolving world of FAST (free-ad-supported TV) is proving to be a moving target.

Even the acronym—from FASST (where the extra “S” stood for streaming) to FAST—captures the dynamic and volatile progression of the medium. And there’s the avalanche of new packages from media stalwarts, such as Comcast Corp. (via its Xumo co-venture with Charter Communications), and Paramount Global (Pluto TV) which are cascading into the market alongside aggressive young content aggregators including Tubi, Freevee (Amazon), Roku and MuxIP. 

Add to this mix the walled-gardens of FAST channels offered by TV-makers: Samsung, LG Electronics, Vizio among other purveyors of connected TV (CTV) sets. Not to mention the early-stage quandary about whether FAST is best suited for live events (news and sports, which is why one of the hopefuls is going after regional sports networks) or vast content libraries. 

And don’t forget the constant introduction of “alternative” distribution options. For example, in mid-July The Roku Channel FAST service became available on Google TV and other Android TV OS devices, downloadable through the Google Play Store. Until then, the Channel was only accessible on  Roku devices, Fire TV, Samsung TVs, the Roku mobile app and online.

Amid this flurry of activity, there’s the predictable enthusiasm of entrepreneurs, such as Tom Link, founder/CEO of five-year old MuxIP, who recognizes the new competitive challenge. 

“At the end of Q4 last year, the industry became actively engaged in exploiting the FAST ad models,” Link told TV Tech.  “Tier 1 media companies are trying to get into this space.  There’s a lot of noise about how to make money and where are the audiences.”

But this ebullience is countered by the inevitable skepticism, reflected in July’s Hub Research study that augured the end of “peak TV.” The Hub study claims that “consumers are reaching their limit for video sources.” 

Moreover, the data deluge about FAST has triggered confusion about whether ad-filled linear streaming videos—especially when delivered via wireless—is anything new. This led one exasperated legacy broadcaster to bluntly admonish that Free Ad-Supported Streaming TV is "just television.”

More Questions Than Answers 
FAST’s IP platforms are compatible with wired and wireless delivery—including NextGen TV—and also offer opportunities to integrate programs into existing structures, such as cable channels. 

Moreover, FAST has emerged alongside AVOD (ad-supported video-on-demand), posing another conundrum from some viewers. Srinivasan KA, co-founder and chief revenue officer at Amagi Corp., explains that, “FAST is a linear format of AVOD,” and his company is developing ways to integrate the ad-based variations. 

Amidst this chaotic evolution, there are continuing data benchmarks, such as June’s Circana “TV Switching” study, which attests that 14% of U.S. households tune into a FAST service daily. Circana, the technology analytics firm created in last year’s merger of  Information Resources, Inc. and The NPD Group, also reports that in the past six months, 55% of U.S. internet households have used at least one FAST service, up from 52% late last year.  

NBCUniversal’s recent launch of nearly 50 FAST channels, with programs pulled from its film and TV vaults, has focused even more attention on the diversity of the FAST platforms.  The shows—ranging from “Saturday Night Live” and “The Real Housewives” episodes to nostalgic “Lone Ranger” and “Little House on the Prairie” series to Telemundo programs—are organized into genre-based streams of “comedy, criminality, monsters” and more. The complex distribution plans include relationships such as using Xumo to make the shows available to third-party distributors, such as Freevee, the Amazon FAST purveyor.  

Organizing such arrangements will be increasingly complex, especially since NBCU also offers similar subscription-only content on its Peacock streaming platform.  

John Buffone, vice president, industry advisor-Media Entertainment & Connected Intelligence, told TV Tech that, “some FAST services are beginning to limit the amount of new content brought onto the platform as the existing content array is already so vast.

“Look for the providers to leverage their core assets to grow their share of viewership in this saturated and highly competitive market,” Buffone added. He cited the approach that some FAST providers are taking—notably Xumo and Pluto TV, which “have their parent company [NBCU and Paramount] assets to offer.”

Buffone explains that FAST resembles cable TV in numerous ways, such as the electronic program guide, but “it is also new and different.”

“Among the notable differences is the varied content array each service offers,” Buffone says. “One, such as Tubi TV, may stand out for news while another, such as Pluto TV, will offer curated programs on owned-and-operated channels that reflect the depth of the Paramount content library. As long as the content differentiation exists, viewers will continue to find value in using multiple services.”  

Indeed, FAST users tune into an average of 3.6 FAST services across a six-month time horizon, showing they value the varied programming mix, according to Circana’s analyses. 

From the Connected TV Viewpoint
Smart TVs are playing a major role in the FAST adoption, especially as major OEMs (original equipment manufacturers) plunge into the programming field. 

Rick Ducey, managing director at BIA Advisory Services and a long-time analyst of media economics, points out that the CTV opportunity is so substantial for TV set makers because the data it generates can potentially “produce more revenue than TV set sales,” at least in the near term.  He points out that broadcast and cable networks “enter this market from a content-first strategy versus the OEMs’ entry point of tech first.”

Like many enthusiasts for FAST and AVOD opportunities, Ducey says that, “both linear and on-demand channel platforms, and services will continue to grow in viewing and ad spending at the expense of linear TV like traditional broadcast and MVPDs.”

“CTV has the chance to do it right by creating unified identities that are purpose-built for identity graphing across multiple platforms,” he adds.  Nonetheless, Ducey points out that, “Platform loyalty will erode a bit as content owners seek incremental revenue by distributing programming across more platforms.

“TV OEMs have a play for now with their… data and they’ve developed clever ways to add value … and monetize it,” Ducey added. “As the industry starts to standardize on both measurement and currency solutions and come to consensus on unified ID solutions, OEMs’ advantages in this area will erode.”

Circana’s Buffone points out set-makers’ advantage: “TV OEMs control the glass which allows for user data acquisition through technology such as audio-content-recognition (ACR). This provides first-party engagement data that will allow for these providers to optimize the viewer experience and ultimately increase engagement.”  

Citing Samsung’s marketing campaign for Samsung TV+’s FAST content, Buffone acknowledges that “quality and exclusive programming … will continue to be the primary driver of viewer engagement. In that regard FAST is no different than the distribution platforms that came before.” 

“The industry sees an opportunity to enhance the viewer experience and in return they are aiming to generate content and advertising revenues to increase the margins of their TV business, Buffone says. “There are numerous business models that will likely evolve from this and it remains to be seen which will win and which will lose.”

One aggressive example comes from LG Electronics, which has launched “LG Channels,” a FAST offering that includes direct relationships with more than 100 program suppliers  and is “developing dozens more for launch this year,” says Matt Durgin, vice president, Content and Services, which manages LG content, ad and technology partnerships. 

LG has also licensed hundreds of movies “from all the major studios,” he adds, explaining that the company has integrated the FAST LG Channels into the same guide as the over-the-air broadcast channels so that viewers “who utilize an antenna to receive OTA can see FAST and broadcast channels within the same experience.” 

LG is also making exclusive channels for consumers, such as an NCAA channel that offers thousands of college Division 1, 2 and 3 championship games plus an exclusive college sports channel called Rivalries which highlights some of the oldest and strongest college rivalries in the country.  

LG has also packaged its own “Majordomo” Cooking Channel, which features exclusive content from renowned chef David Chang.

Building the Backend
Amagi Corp., an India-based SaaS firm, has spent 15 years developing broadcast and streaming TV technology to create, manage, distribute and monetize live linear channels.  It now has deployments in 40 countries, with U.S. clients such Sinclair Broadcasting Group and the National Hockey League, the Tennis Channel and World Kickboxing. 

Co-founder and CRO Srinivasan KA sees sports as a major driver of FAST experiences. The company’s “Cloudport” can create and distribute the FAST channel with a content line-up that includes pre-game and post-game highlights, such as practice sessions and live press conferences. 

“Cloudport is for playing out on live linear channels,” KA said, comparing it to “what a broadcaster would do with a live stream,” inserting commentary, graphics, captioning and other screens from master control. 

Moreover, KA emphasizes that, “Because we are being delivered over-the-top, we can measure viewership,” which is attractive to advertisers. This ties into Amagi’s geo-targeted software for ad insertion. 

KA says that Amagi’s is working with NBC, Fox, Tegna, Cox, AccuWeather and others—offering “close to 50 channels” and serving as “the connective tissue” to help them deliver FAST service.  The company’s relationship with Sinclair Broadcast Group includes those stations’ ATSC 3.0 technology for local news and sports, but KA did not provide details. 

As for connected TV, Amagi is working with Samsung, LG and Vizio, which he considers “a huge growth area.”

“FAST is the new linear,” KA proclaims enthusiastically.  He believes that CTVs are especially appealing to GenZ viewers. “It is the same thing we had in broadcasting: fantastic programming and free.”  He expects “more and more premium content” will be moving into FAST delivery. 

Like Live TV
Underscoring the hyper-targeting of the FAST providers is a “Crimeflix” channel introduced by MuxIP in mid-July. The Los Angeles-based provider of automated FAST solutions distributes content via Sling TV, Roku, LG and Amazon’s FreeVee. Its FASTHub for OTT offers “RetroCrime” movies and TV shows and versions in English, French and Spanish of some titles (with German-language dubbing coming soon, the company says).

Tom Link, MuxIP founder/CEO, says that the company’s “cloud playout service,” which includes automated content ingestion and “dynamic playlist manipulation” enables flexible delivery options.

“We have patents for cue-point ingestion,” such as markers to identify where to insert an advertising pod,” Link told TV Tech. “We can take assets from a variety of inputs and combine them to produce a live experience.”

MuxIP is working with about four dozen content owners, including World Poker Tour, a motorsports network, BlackStar Network (an African-American news channel) and Stellar TV, Link says.

“We do everything from the ad perspective, such as ad insertion. We’re bullish on this space,” Link adds, citing company revenue doubled from early 2022 to first quarter 2023. MuxIP streams its PodcastOne TV to 60 outlets through its FASTHub for OTT platform, including Pluto, Amazon FreeVee, Roku, Samsung TV Plus, LG Channels and Tubi.

Link explains that the MuxIP technology can identify an ad break about 10 seconds beforehand, and allow a request to go to its server to match the ad to the viewer. He’s also looking for ways to overlay ads into specific content.

“MuxIP delivers content in HTTP Live Streaming (HLS) format, that works on many platforms,” Link says, but he insists, this is “not just about technology, which is the cornerstone of what we do.” Rather, he says, MuxIP focuses on the ability to stream on multiple platforms, such as YouTube and social media, “which turns out to be very important.”.

Link says his company is “in talks with a cable operator to take dozens of the MuxIP channels” and he expects to sell some of his channels to OTA broadcasters. 

“Not everyone knows how to do this,” he gloats, but offers no further details.

Calculating the Advertising Formula amid content deluge Freevee, the Amazon-owned FAST service formerly known as IMDb TV, offers more than 280 channels in genres featuring original programs, movies, game shows, classic TV, new, reality and sports shows. They can be accessed via Prime Video and Fire TV as well as the Freevee app. A hug batch of shows came online this summer as part of a Freevee deal with MGM and Warner Bros. Discovery.

At LG, its LG Ad Solutions group handles LG’s Smart TV advertising inventory along with holding all of LG’s TV data “which provides privacy-compliant methods of audience development to meet the needs of all advertisers,” Durgin says.

Smackdown from Small Streamers
One indicator of the perceived importance of FAST was the creation in June of the “Independent Streaming Alliance,” a new association of smaller streaming companies which are “joining forces to promote the value of independent streamers, and to work hand-in-hand with platforms, advertisers, and regulatory bodies to ensure that we have a healthy ecosystem that benefits everyone, not just the few,” as Philippe Guelton, Chief Revenue Officer at Chicken Soup for the Soul Entertainment, explained.

Founding members of the ISA include Allen Media Group, Chicken Soup for the Soul Entertainment, Cineverse, Future Today, kweliTV, Revry, E.W. Scripps, Tastemade, TMB and Vevo. Guelton said that the Alliance’s goal is to work with distributors to assure access to audiences and to “ensure members’ ad inventory can be accessed by buyers directly or via programmatic technology.”

As FAST vendors and operators maneuver through the shifting media landscape, the big question remains: how will viewers discover and migrate onto these new platforms?  Overall, a slew of forecasters is predicting upbeat growth—reinforcing the expectations of TVREV and Circana, but also disclosing the fickle nature of some viewers. 

For example, a recent Antenna “State of Subscriptions” analysis revealed sharp dichotomies in viewer preferences for paid or FAST services. It found that 69% of Comcast’s Peacock streaming customers chose a lower-priced plan with commercials and 58% of Hulu’s subscribers picked an “ad-lite” plan.  On the other hand, the Antenna study discovered that only 21% of MAX viewer took the ad option—perhaps a lingering habit from the years of paying for a monthly subscription to HBO (MAX’s predecessor linear service.)

Such results are reminders that consumers are still figuring out how to handle the glut of streaming options. And that possibly FAST won’t mature as fast/quickly as some vendors hope. 

BETHESDA, Md.—When reports surfaced early last month that Huawei—the giant Chinese telecom manufacturer, best known for its infrastructure equipment and handsets—is planning to make 8K television receivers for 5G video transmissions, fear and skepticism popped up around the globe. Why would a company with a limited consumer electronics presence (aside from handsets, of which it is a world-leader) plunge into the competitive and low-margin TV receiver business? Would the Huawei initiative—if true—affect the dynamics of 5G video distribution? Moreover, given the current political scrutiny around the company (and the U.S. barriers to distribution here), would any 5G TV devices actually be allowed to go to market in the U.S. and other Western countries?

Huawei was quick to deny the reports, which originated from Japan's Nikkei Asian Review. Nikkei said that the Chinese electronics giant was working on an 8K receiver using its own built-in 5G chip that could download data-heavy content, including virtual reality and 360-degree immersive video.

‘WE DON’T DO TV’S’

A senior official at Huawei's U.S. arm told TV Technology, "We don't comment on industry rumors or speculation." Separately, Huawei executives were quoted in Chinese business publications insisting that, "We don't do TVs."

But his further comment—"A big-screen terminal does not necessarily mean a TV"—was parsed into a challenge of whether Huawei is playing with words. Industry analysts in China wondered if Huawei is actually making a TV-like device but will call it by another name. Others cited Huawei's expansive Internet of Things strategy, noting that a high-capacity 5G monitor (as well as mobile devices) could be part of that IoT roadmap—without actually being a conventional TV set.

Another senior U.S. technology expert, who requested anonymity, pointed out that Huawei "certainly has the technology to make it happen," although he acknowledged that "it's not clear what the need is, especially in the U.S."

"You can’t count on the TV being in a location with good 5G reception," he told TV Technology. "Maybe it'll work in urban areas in China."

Indeed there is already considerable speculation that Huawei would make the Ultra High Definition 5G TV receiver initially only for China and possibly other Asian markets—that it would not try to crack the competitive U.S. or European regions, at least not initially. Samsung and Sony have already announced plans for 8K monitors—albeit not with 5G capability. Their initial prices are in $5,000-$70,000 range, depending on size.

COMPLEMENTARY, NOT COMPETITIVE

No matter what eventually emerges from the Huawei TV tease, other developments augur a lively evolution for 5G's relationship with the conventional broadcast TV industry. From Korea to Germany—with hints of U.S. projects in the works—5G TV is emerging as a viable companion to the broadcasters’ ATSC 3.0 (aka “Next Gen TV”) platform.

Madeleine Noland, the new president of the Advanced Television Systems Committee, said that she doesn't perceive 5G as a competitor to "next-generation terrestrial broadcasting using ATSC 3.0 technology."

"ATSC considers the two transmission systems complementary," she said. "Each has benefits in terms of a variety of factors, things like efficiency, coverage, robustness and so on... We think the one-to-many architecture of terrestrial broadcasting and the big, robust data pipe of ATSC 3.0 make Next Gen broadcasting ideal for many applications.

"That said, down the road we envision service providers delivering data and video via the platform best suited to each given use case, and to devices that are equipped to receive data via multiple delivery methods,” Noland added.

Mark Aitken, vice president of advanced technology for Sinclair Broadcasting—who has advocated collaboration between 5G and ATSC 3.0 technology—said he "certainly can see 5G receivers playing a role as the fiber/cable alternative ‘from the curb to the home.'" Although he said he had no inside knowledge about the presumed Huawei plan, he expects such integrated devices to emerge.

"It would not surprise me to see a product like [a 5G TV receiver] that also incorporates an ATSC 3.x receiver as a gateway device, making available content from both wireless connections for distribution through the home/office," Aitken said. He foresees a "network hub" device that uses the home network (wired and/or wireless) as the distribution platform.

"We have a roadmap for the chip that may yield a 5G/ATSC 3.x integrated SoC [system-on-a-chip]," said Aitken, who also holds roles at Sinclair-affiliated technology companies ONE Media and the India-based semi-conductor maker Saankhya Labs.

"If there is a market, we will chase it," he said.

5GTV TESTS UNDERWAY

Meanwhile, other initiatives to marry 5G and advanced TV platforms are emerging around the world.

A German broadcast TV field trial dubbed "5G Today" debuted in early May. The project in the Bavaria region is a collaboration of the Bavarian Broadcasting Corporation, IRT, Kathrein, Rohde & Schwarz and Telefonica Germany. Its backers say that it could lay the foundation for the efficient transmission of broadcasting content to millions of future 5G devices.

Using the new broadcast mode FeMBMS (Further evolved Multimedia Broadcast Multicast Service), 5G Today is expected to transmit signals out to about 60 km on Single Frequency Network channels 56/57 (750-760 MHz). Telefonica Germany is making the appropriate frequencies available for the trial. The project will test how 5G broadcasting can be used to create an overlay infrastructure that simultaneously reaches millions of 5G mobile devices in a way that is neither a burden to the regular mobile networks or which puts extra costs on consumers, according to the consortium that is running the test.

In South Korea, KT Corp. (formerly Korea Telecom) began offering a full-scale 5G IPTV service through set-top boxes and mobile devices in April, following more than a year of trials and special events (such as the 2018 Winter Olympics). Seoul Broadcasting Systems is working with KT to develop broadcast capabilities for the 5G technology. Under the new agreement, TVU Networks will work with KT Corp. to deliver UHD broadcasts over KT’s 5G enterprise network. Under terms of the agreement, KT and TVU Networks will work collaboratively to establish an enterprise 5G network and related broadcast capabilities in Korea.

These developments come as more research surfaces about the collaborative prospects for 5G and advanced broadcasting. The Ericsson Consumer and Industry Lab issued a "5G Consumer Potential" report last month in which it concluded that, "Consumers themselves predict massive changes in future usage on 5G, with video consumption set to peak."

In particular, Ericsson pointed out the cord-cutting appetite that 5G video will serve.

"Consumers in the U.S. would prefer to cut the cord from cable TV and instead use streaming services via 5G," according to the report. "Chinese consumers expect to live in a 5G-connected smart home; and South Korean consumers would love to go shopping in mobile Virtual Reality"

"Four in 10 [Americans] state that 5G home wireless broadband would be a strong incentive to cut their ties with cable TV, as it would then come bundled in with streaming services," Ericsson explains. "5G home wireless broadband offers an additional broadband choice to users if consumers are made aware of this alternative."

Although many of the respondents in Ericsson's analysis still think of handsets as their major vehicle for video consumption, the study opens the door to 5G delivery to other monitors.

"Consumers expect to increase their video usage drastically with 5G," says Ericsson. "Half of smartphone users in our survey say they will start watching YouTube and Netflix in 4K and will download more HD video content once 5G is available… One in five say that they could spend more time [watching streamed videos] provided that devices improve in screen size and battery life [and] data plan allowances."

WHAT HUAWEI COULD DO

The Ericsson finding brings the focus back to the impact of Huawei's reported plan to accelerate video delivery to a home monitor via 5G. The company holds more than 1,500 patents for 5G technology—about twice the number of Qualcomm, its largest U.S. competitor, according it IPlytics, a German intellectual property research firm.

Huawei also has strong relations with wireless telecom operators (especially in China), which will support a 5G video service. These existing connections would help Huawei install 5G base stations and small-cell stations within a region—part of the ecosystem needed for 8K delivery, according to C.Y Yao, a technology analyst at TrendForce, a Taipei research company, quoted in Asian publications.

In addition, Huawei has extensive connections in the TV business, as a supplier of chips to receiver manufacturers such as Hisense, Skyworth and Changhong. In particular, its modem chips will be essential for 5G service. Analysts believe that Huawei would work with Chinese or Korean suppliers of large-screen displays, although no specific speculation has yet emerged.

Most significantly, the 3rd Generation Partnership Project (3GPP), a standards organization affiliated with the International Telecommunications Union, is working on 5G standards and an evolved IP Multimedia Subsystem. More than a year ago, 3GPP initiated a program seeking "improved support for television services to both mobile devices and stationary TV sets over eMBMS (enhanced multimedia broadcast and multicast system)." The goal is to let mobile/wireless operators deliver "superior TV services" via their networks.

As one observer put it, Huawei's move toward a 5G 8K project would expand its brand into a new market and boost its role in the evolving ecosystem. 

LAS VEGAS—Just before the 2019 CES begins Jan. 8, the Consumer Technology Association will reveal its annual electronics sales forecast, and for the first time 8K ultra high definition TV sets will be included in the forecast.

“8K is getting real,” says Steve Koenig, CTA’s vice president of market research. “We’ve seen 8K in previous years, but now I expect every manufacturer will show 8K equipment, and there will be big announcements about plans to begin shipping 8K sets later in the year.”

Koenig’s forecast will also confirm the strength of the television receiver market, showing that 55-inch 4K UHD displays are “now the industry standard,” a dramatic jump from the 42-inch screen which had been the mainstay of the flat-panel industry for several years. Koenig also expects that 65-inch sets will be heavily promoted at CES.

[Read: Is 8K Gaining Traction?]

Although Koenig admits he has “no idea” about the pricing for 8K equipment, he expects the sets will be just one aspect of the renewed focus on TV devices. Advanced TV display technology, including rollable screens, micro LEDs from Samsung and Sony’s short-throw laser projection are among products Koenig expects to see at next year’s CES.

THE RISE OF ‘C-SPACE’

CTA’s Karen Chupka, senior vice president, CES & Corporate Business Strategy, affirmed the staying power of television sets despite the boom in alternative viewing devices.

“At one point, everyone thought the TV set would become a dumb device, yet TVs have become smarter,” Chupka said. “TVs are still a huge part of our everyday lives. While we have all these great technologies being built into things we never thought of, at the end of the day, people are still using TVs, albeit interfacing with them in different ways.”

Citing the rapid adoption of streaming video, as well as user-created content, Chupka characterized as “incredibly important” the growing reality that “content resides on all our devices.” Focusing on the growth of “C Space,”—a conference and exhibit area at CES aimed at content producers, marketers and distributors—she focused on the growing role of analytics and other tools that help marketers and programmers evaluate new opportunities.

“We created C Space with the intent to bring branding, content and marketing people under one roof,” Chupka told TV Technology. “There is so much knowledge about who’s watching what and the ability to create diverse programming. All this data and analytics are becoming more and more important to understanding audiences.”

This year, “Sports Zone,” a popular component of the CES in recent years, has been moved to C Space, because it’s “such an important tie-in,” Chupka explained. The combination means that 2019’s C Space will be twice the size of last year’s event, which drew 22,000 attendees. Chupka expects a larger crowd this year.

Other technologies such as ATSC 3.0 will be less visible—but not absent—from the halls and suites at CES. Koenig does not expect manufacturers to demonstrate 3.0 devices on the show floor, although such products may be on display at the 2020 CES.

WELCOME TO ‘THE DATA AGE’

Along with 8K introductions, Koenig expects other video developments.

“What matters is picture quality,” he said. Technically advanced consumers will be looking for advanced features, such as high dynamic range. Koenig’s research also indicates that 4K sets will dominate U.S. TV sales in the coming year. Nearly half of all new receivers will have 4K displays in 2019, and that figure will rise to 55 percent by 2020, Koenig said.

Television sets are the number one most-owned technology in America, in 96 percent of U.S. homes, according to CTA’s research, with smartphones (86 percent) coming in second place.

“Even in this mobile-driven era, the TV remains the centerpiece of technology in U.S. homes,” Koenig added. “TV is still a major attraction at CES.” He expects that one major issue next month will be the intense global competitive market, especially as more TV brands from China offer innovations, just as Japanese and Korean companies have done in recent years.

At their presentation at the “CES Unveiled” preview in New York last month, Koenig’s CTA research colleagues predicted an upbeat holiday sales season, predicting that 164 million adults (about two-thirds of American adults) will purchase technology gifts, spending an average of $464. TV receivers remain the most popular item on the holiday wish list, similar to 2017, with notebook/laptop computers and smartphones/tablets filling the next two spots.

In their presentation, Ben Arnold, CTA’s senior director-innovation and trends, and Lesley Rohrbaugh, director-market research, introduced a new strategic perspective, calling 2020 the start of the “Data Age,” following the “Digital Age” (2000) and “Connected Age” (2010). They singled out the growing use of artificial intelligence—where IoT, which usually stands for “Internet of Things”—has been updated to the “new” IoT: “Intelligence of Things,” in which digital assistants become more specialized and a range of home products are integrated into a “whole home view.”

READY FOR ATSC 3.0

Pearl TV, the alliance of eight broadcast companies promoting Next Gen TV, will be active during CES in anticipation of its 2020 service launch, according to Anne Schelle, managing director.

“Our entire focus is on the commercialization of the very flexible ATSC 3.0 standard,” of Pearl TV, Schelle said. The organization’s leaders and its Phoenix model market partners will be at CES “meeting with various ecosystem partners, reaching out to consumer device manufacturers, automotive manufacturers, and other players to share our service requirements and plans resulting from the Phoenix tests,” she said.

Schelle contrasted the 3.0 rollout to the high-definition transmission and reception launch 20 years ago, which “took several CES and NAB Shows to accomplish.”

“It’s moving much faster in today’s digital environment,” she said. “While we don’t anticipate seeing much in the way of ATSC 3.0 receivers on the show floor itself in 2019, we know that ‘behind the scenes’ discussions will be about new partnerships and new capabilities of future television products—just like conversations in past years.

“CES will be another opportunity to explain how this transition is different than the last one, and how broadcasters are embracing the Internet Protocol capabilities of the new standard,” Schelle added.

Separately, ONE Media, the Sinclair Broadcasting technology unit that is developing Next Gen TV services, will privately demonstrate three configurations of its chip for ATSC 3.0 devices. There will be a simple demodulator package, a demodulator with analog/digital conversion capability and a demodulator with analog/digital conversion plus an embedded turner, according to Mark Aitken, president of ONE Media and Sinclair’s vice president of advanced technology.

First versions of the chip, which was developed by Saankhya Labs, an Indian firm in which Sinclair holds a major stake, were due to be delivered during the past month from a Samsung foundry. The single-chip receivers feature a low-power embedded antenna and were also designed for use in moving vehicles. The chips include a closely coupled antenna array to insure reception in a high-speed mobile environment, according to Aitken. “We’re going after the largest possible markets, including the global market for set top boxes,” Aitken told TV Technology. The new multistandard SDR (software defined radio) chip will support 23 broadcast standards, he added. ONE Media will demonstrate the technology privately in a hotel suite during CES and expects “we’ll have more to show” (possibly on the exhibit floor) at the 2019 NAB Show, Aitken said, adding that he also plans to demonstrate the chip’s capabilities at the Mobile World Congress in Barcelona in late February.

Aitken declined to discuss pricing, but said that even in low quantities, the price point will be “a fraction” of what other companies are charging for SDR chips.

SENSORY OVERLOAD

Beyond the renewed vigor within the video category, CES continues to expand its reach into countless digital realms—thereby attracting an ever more diverse array of exhibitors and attendees. For example, the Eureka Park exhibit area—where start-ups and young companies can display their innovations—will have 1,200 small booths next month, up from 1,000 in 2018 and six-fold the size of the first Eureka Park five years ago.

Overall, more than 4,500 exhibitors have signed up to show their wares in the 2.75 million square feet of space at CES’s three major venues in Las Vegas (Tech East, Tech West and Tech South, all of which include multiple buildings), CTA’s Chupka said. Floor space and the expected attendee roster of more than 180,000 people are “tracking ahead of last year,” Chupka added. About one-third of attendees are based outside the United States, and CTA’s tally shows that 65,000 people carry a “senior-level executive” title.

In addition to the Prince of the Netherlands and the United Kingdom’s Minister of Trade, 10 other overseas Ministers will take part in the programs.

Chupka is particularly enthusiastic about the growth of C Space, with its larger-than-ever presence by Hulu, NBCUniversal, Turner, Google and other old and new media companies. CES has expanded its “Marketplace” clusters of technologies—each focused on purveyors in categories such as robotics, artificial intelligence, virtual reality, smart cities and travel.

Koenig pointed out the continuing explosion of new programming, including material created for streaming, subscription video-on-demand and other platforms.

“There is so much content out there,” he said, speculating that the “mosaic of sources can be a ‘Frankenstein monster’ of content that consumers have trouble wrangling.” He said he’ll look for ways that artificial intelligence can better help consumers curate their choices. Koenig cited the predictive algorithms (recommendation engines) of Netflix and Amazon Prime which steer viewers to shows they like.

“As algorithms get better and better and train the AIs,” Koenig said he expects that the services will bridge to other digital assistants that will help consumers make viewing decisions. He cited a service, which will be on display at CES, in which LG uses Google Assistant to enable viewers to control the TV.

“It will be interesting to see what is the next level of integration beyond command and control, getting into curation,” Koenig said.

Among other features that he expects to emerge at CES is more audio for home theater, such as a new Dolby Atmos technology that provides “an enormously rich, immersive sound field to go with 4K or 8K.”

WHERE CONTENT AND TECHNOLOGY MEET

The CES conference program—spread over the four days of CES, Jan. 8–12—encompasses more than 250 sessions on dozens of topics. The keynote speaker line-up includes a first-time appearance by LG Electronics President/CTO Dr. I.P. Park, who will appear at a Monday night pre-show event to discuss how artificial intelligence has become the company’s main growth engine. Park is also expected to describe how AI will affect nearly every major industry from technology to healthcare, agriculture, transportation and engineering.

Other keynoters include IBM Chairman/President/CEO Ginni Rometty, who will also discuss AI and quantum in the context of trust and transparency, and Verizon CEO Hans Vestberg, who will (according to CTA) “take a deep dive into the impact of 5G,” especially for use in building smart cities infrastructure. AMD President/CEO Dr. Lisa Su will examine next-generation of computing, especially in terms of gaming and virtual entertainment.

FCC Chairman Ajit Pai is scheduled to sit down with CTA President/CEO Gary Shapiro for a half-hour on-stage chat about regulatory issues on the first day of CES. Other members of the FCC and Federal Trade Commission are expected to join various public policy sessions, which had not yet been confirmed at press time. International trade issues will also be on the agenda, Chupka promised.

Even after more than 20 years of overseeing CES, Chupka seemed awed at the velocity of changes now infusing the technology industry.

“One thing I think that will be surprising is how many advances there will be apparent in just one year.”

For more information, visitces.tech.

In an era of cybersecurity intrusions, Next Gen TV developers are looking at how to secure the all-IP ATSC 3.0 signals, which are a potential delivery vehicle for Internet of Things (IoT) services. Whether to fixed devices in the home, smart cars in transit, wearable products, public-space advertising or “smart city” capabilities (such as transit routing and in-vehicle infotainment), local opportunities abound, as IoT enthusiasts continue to demonstrate.

Although the emerging fifth-generation (5G) wireless technology is angling for a dominant role in IoT applications, some broadcasters see significant roles for Next Gen TV—and they recognize that security and privacy are crucial to establishing IoT services.

In addition to the wireless telco visions for IoT, Dish Networks is expected to use its spectrum assets by building a dedicated IoT network. When Dish Co-founder Charlie Ergen resigned as CEO in late 2017, he said he’d concentrate on building a NarrowBand IoT (NBIoT) network using spectrum Dish acquired in a $6.2 billion spending spree that created a near-nationwide footprint in the 600 and 700 MHz bands.

Kevin Gage, executive vice president, strategic development and chief technology officer at Sinclair-owned ONE Media LLC, told TV Technology that medical data companies have approached ONE Media “looking to pair with 3.0 to develop hybrid solutions” for keeping in touch with IoT sensors, monitoring devices and other applications. He said it was especially encouraging that new ventures are looking to broadcast bandwidth for spectrum solutions.

“We haven’t had a robust start-up community in broadcasting,” Gage observed about the legacy relationships of TV stations. “Our goals with 3.0 are to support the security needs of any new business or industry that wants to make use of 3.0 as a delivery or communications service.” He emphasized that ONE Media’s objective is to “adapt already proven and approved security solutions from new industries to 3.0.”

‘INTERNET OF THREATS’?

At the same time that the IoT business cases are being built, legislators and regulators—from Capitol Hill to the Federal Trade Commission to the National Institute of Technology and Standards, among others—are accelerating their efforts to figure out how and what they should do to assure secure use of IoT systems. On overlapping days, NIST ran its second annual workshop on “enhancing resilience” of IoT and other parts of the “communications ecosystem” while the FTC’s third annual PrivacyCom conference again featured warnings about smart TVs in the privacy/security scenario, Barely a week earlier, Sen. Ed Markey (D-Mass.) and Rep. Ted Lieu (D-Calif.) were talking up their Cyber Shield Act of 2017 (S.2020 and H.R.4163) at a Capitol Hill seminar sponsored by the American Enterprise Institute.

Collectively, the policymakers explained that they want to make sure consumers can trust IoT products and services. Markey and Lieu’s legislation would create a voluntary cybersecurity “seal of approval” (probably administered through the Commerce Department) for IoT devices; one objective is to create product labels (physical or digital) to show consumers that products—ranging from baby monitors to phones, laptops and other networked items—are safe from intrusions.

At the AEI event, Markey warned that every IoT device (which he repeatedly called “Internet of Threats”) is “something that can be compromised ... in ways that people don’t think about but they should.” He said the proposed legislation would “create a roadmap of improvements for manufacturers and their devices.”

SPECTRUMCO AFFIRMS NEED FOR SECURITY

SpectrumCo LLC President John Hane acknowledged that “some IoT applications require extremely high levels of security.”

“We expect to support industry standard security and authentication protocols, and proprietary solutions of our customers,” said Hane, who in February was hired to run Spectrum Co., LLC, the ATSC 3.0 spectrum consortium founded by Sinclair Broadcasting Group and Nexstar Media Group.

Hane said SpectrumCo’s platform will be able to enhance security in several ways. “One of the biggest challenges of IoT security is updating the firmware of so many devices in so many locations,” he said. “As vulnerabilities are found, they have to be patched, and fast. SpectrumCo’s low-band broadcast platform will allow our customers to update devices at a small fraction of the cost of cellular updates. Even where wireless or wired connections already exist, a redundant path can provide an additional layer of security.”

READY FOR IOT CYBERSECURITY CHALLENGES

Against this backdrop and the growing promise for IoT systems, ATSC 3.0 developers believe the new standard is ready to handle security challenges, according to technologists who have worked on Next Gen TV.

“ATSC 3.0 specifies use of encrypted data on the internet," said Adam Goldberg, principal of AGP, LLC and chair of the Technology Group 3 Specialist Group on ATSC 3.0 Security. “It also specifies use of cryptographic code signing which allows devices to verify that software updates (or other software) was created by trusted parties and not by hackers.”

Goldberg also pointed out that the 3.0 standard’s A/360 (“Security and Service Protection” layer) calls for use of Transport Layer Security for encrypted internet communications, “with an eye toward greenfield implementations.”

“This is useful for IoT,” Goldberg added because A/360’s code signing “is rather vital for IoT” implementations such as online updates.

Dr. Richard Chernock, chief science officer of Triveni Digital and chair of Technology Group 3, which guided 3.0 creation, also acknowledged the potential massive scale of IoT.

“IoT implies the need to communicate with a very large number of devices,” Chernock said. “When the same information needs to be sent, then broadcast economies-of-scale come into play. Sending common information to millions of devices takes no more resources than sending to hundreds of devices. This is useful for things like firmware updates.”

CHALLENGES EXPECTED

At the NIST workshop, Lisa Carnahan, Manager-Interoperability Group at NIST’s Information Technology Laboratory, urged the IoT industry to identify a model to manage and reduce cybersecurity risks, focusing on the need to align IoT security with consumer expectations and other market considerations. Warning that “the alternative is regulation,” Carnahan emphasized the value of inter-industry collaboration to understand and agree upon the approach to security protection.

Overall the NIST workshop focused on botnet threats and was part of a “conformity assessment process” as the agency prepares a report to the White House on automated threats to IoT and other systems. Other NIST speakers emphasized that the government prefers voluntary industry protections rather than regulatory mandates.

Chris Boyer, assistant vice president for global public policy at AT&T, urged the industry to create security guidelines for IoT devices, modeled on another NIST framework for cybersecurity standards. He cited the “need to do something similar to what we did for the NIST Framework for IoT, that we can promote internationally.”

“I think it’s very important to get our arms around how we deal with IoT in the U.S., because other countries are aggressively pursuing IoT standards and guidelines,” Boyer said.

As with many IoT conferences, the NIST program eventually moved toward the “liabilities”—that is, who in the value chain would bear the burden of problems created by IoT flaws or security intrusions.

[Disney Studios Partners With Accenture to Assist With StudioLAB]

Meanwhile, the Consumer Reports/Consumers Union presentation focused less on IoT than on other data-related aspects of TV technology. The presentation repeated the CU mantra that there should be greater protections from the data-collecting capabilities of smart TVs.

Katie McInnis, Consumers Union’s Washington office, explained that, “as more consumer devices contain smart or connected functionality, these devices may collect or share information in ways consumers may not expect — or otherwise limit or compromise a consumer’s control over their purchases.”

She also offered a peek at the results of the television study that Consumer Reports Online will publish later this year.

“While we will not be scoring the televisions using traditional Consumer Reports ratings,” McInnis said in prepared remarks, “we will indicate which televisions performed generally better or worse according to our metrics.”

At the AEI seminar, Rep. Lieu also called for a cautious approach to IoT regulation.

“The reason we’re not very specific in this statute is [because]... when it comes to technology, government should have a very light touch,” Lieu said, emphasizing his expectation that that industry will “self-regulate.” He explained that the voluntary program established by the proposed legislation would rely on a commission of diverse experts to set standards.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com

For a comprehensive list of TV Technology’s ATSC 3.0 coverage, see our ATSC3 silo.

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Hub Entertainment Research’s report last month, which found that 52 percent of pay-TV viewers prefer to watch their favorite shows online rather than via traditional broadcast or cable channels, surfaced amid a flurry of high-profile developments in the fast-evolving, over-the-top and subscription video-on-demand market.

Hub Research chart STB vs online viewing

The Hub study reinforced a Parks Associates report, issued just a few days earlier, that declared SVOD services—many of them offshoots from traditional linear TV networks—now dominate the paid OTT landscape.

Almost simultaneously, several new streaming services materialized. Most prominently, “Philo,” a $16 per month “skinny bundle” of 37 channels largely culled from non-sports cable networks; and a new Disney streaming network, due to debut in 2019, will further bolster the appeal of non-traditional TV viewing.

Disney’s go-it-alone plan, which was announced quickly after the company said it will take its content off Netflix, generated extraordinary interest because of suggestions that Disney will create new shows for its streaming channels, featuring original video based on company franchises such as “Star Wars,” its Marvel properties and Pixar’s “Monsters, Inc.”

Plus, the past month had the usual parade of OTT announcements, such as:

· A fee-based “Sports Illustrated” SVOD channel on Amazon Prime; for $4.99/month, there’s a lineup of sports material, although no live coverage;

· Fee-based “Curiosity Stream” (the SVOD service created by Discovery Channel founder John Hendricks) on Comcast’s OTT platform; the $5.99/month lineup is available on Comcast’s set-top box VOD platform and via its Xfinity Stream app/portal;

· A no-fee, ad-free video streaming service from Hoopla, a company that collaborates with local participating public libraries. Hoopla’s service offers “classic” titles (oldies) from Paramount Pictures, Viacom, Disney and other distributors for delivery to Apple TV and Amazon’s Fire TV at no charge for limited periods of time.

Separately, AT&T filed a trademark application for a “Watch TV” logo, with an intricate design highlighting the letters “A”, “T” & “T”. Although the paperwork at the U.S. Patent and Trademark Office offers no hints about how the logo might be used, analysts speculated that it could eventually be a unified mark for all AT&T video services, including (pending current legal challenges) those offered via AT&T’s u-Verse IPTV systems and DirecTV, including DirecTV Now apps plus the Time Warner content.

For deep thinkers seeking to find a unifying context in these developments, there is the question of how (or if) these platforms and applications will fit into the emerging ATSC 3.0 environment. Some concepts—but probably no deals—may emerge during next month’s CES (see cover story) where the streaming producers and platform providers will be scouting for collaborative and competitive delivery systems.

Philo, which started as an internet TV service for college campuses, has programs from A+E, AMC Networks, Discovery, Scripps and Viacom—along with investments from most of those networks. Nostalgically named after Philo Farnsworth (considered by some to be the father of television), the new streaming service will seek to position itself with cord-cutters who want to access major OTT options, according to Philo CEO Andrew McCollum, an alumnus of Facebook. He expects customers to use an over-the-air antenna to receive local TV and to continue their subscriptions to SVOD services such as Netflix.

“We wanted to build the first social TV experience,” he said, indicating that Philo will eventually add social functionality, which was not available at launch. The vision is to establish a synch-watch feature that lets multiple friends chatter online about shows they are jointly watching, such as programs on Comedy Central or Discovery.

“We share a lot more about much more personal things on social media all the time,” McCollum said.

HOW ADVERTISERS PERCEIVE THE CHALLENGE

Inevitably, these research reports, launch promises and business visions were accompanied by deep thinking about the impact on advertising and the financial structure of broadcast economics, especially as it affects sports telecasts.

In a report last month, Rob Norman, chief digital officer of GroupM Global, examined “the challenge of getting younger viewers into the TV habit” with special attention to the problems for “ad-funded sports programming.” GroupM characterizes itself as the “world’s largest media investment group with more than $108 billion in billings.”

Norman warned that if OTT purveyors “emerge as aggressive bidders” for online sports rights, the legacy “television establishment will lose impacts or be forced to pay more.”

“This is important as it will lead to inevitable advertising price inflation at a time when advertising itself is under considerable pressure to prove return on investment,” said Norman.

At about the same time, the Consumer Technology Association’s research department issued its analysis of the streaming video advertising landscape. Its study “Exploring Preferences for Personalized Content Consumption Experiences” concluded that streaming viewers are more willing than expected to watch commercials on streaming platforms. About 71 percent watch video commercials to discover other streaming content, and 69 percent watch videos for a product or service, explained Steve Koenig, CTA’s senior director of market research, who conducted the survey.

Although about two-thirds of viewers watch streaming ads up to the point where they can skip out “most of the time,” Koenig found that “nearly four-in-10 viewers watch the entire ad without being required to do so.” CTA’s study also determined that viewers expect the length of an ad to conform to the length of the content they’re watching.

“For example, shorter spots for short-form video and longer ads with long-form content,” Koenig said. “To a lesser extent, the number and placement of ads tied to streaming video also influence ad tolerance.”

FORMULATING THE STREAMING FRAMEWORK

The restructuring of the SVOD ecosystem, along with the research findings, are typical of an emerging category, although it is complicated because of the relationships with—and the competition against—existing broadcast and cable operations.

For example, as the Park Associates study pointed out, about half of the general entertainment and premium-level SVOD services in its 2017 Top 10 have some connection to conventional TV brands. Parks pointed out that these top 10 paid OTT video services have “a massive lead over more expensive and relatively newer virtual MVPD services.” Here is Parks’ tally on the most-viewed SVOD services:

1. Netflix

2. Amazon Video

3. Hulu

4. MLB.TV

5. HBO Now

6. Starz

7. YouTube Red

8. Showtime

9. CBS All Access

10. Sling TV.

“While the top three are no surprise, the big story over the past year has been the rapid subscriber growth for OTT video services from HBO, Showtime and Starz,” said Brett Sappington, senior director of research at Parks Associates. “The combination of recognized brands and popular original content is driving demand for their offerings. Services such as Sling TV and Crunchyroll are still enjoying strong growth, but other services have simply grown at a faster rate over the past year.”

Sappington noted that online pay-TV services are also growing quickly, fueled by nationwide advertising campaigns. “YouTube TV’s advertising and sponsorship deal with MLB during the recent World Series is just one example of the marketing dollars behind these service offerings,” Sappington said. “While more online pay-TV services could enter the top 10 within the next year, those services that comprise the top 10 are recognized brands that are aggressively working to expand their subscriber bases. Displacing them will be a difficult task.”

Hub Entertainment Research’s annual “Conquering Content” report examined the role of conventional cable/satellite programming in a different context. Hub identified that set-top box use has “been steadily declining over the past several years.”

It noted that in 2014, 64 percent of viewers watched their favorite show through an STB (either live, on a DVR or through their MVPD’s on demand platform). At that time, just 31 percent said they watched their favorite show online (via an SVOD service such as Netflix, Hulu or Amazon, through a network or MVPD site/app or through other online sources such as iTunes). The past year saw a big jump (from 40 percent to 52 percent) in the online viewership preference.

“These findings suggest that the aggressive investment SVODs are making in original and exclusive content is paying big dividends,” said Peter Fondulas, co-author of the study and principal at Hub. “In this research and other recent studies, we see clear evidence that high-profile online exclusives generate buzz that draws consumers to these platforms, which not only helps attract brand new subscribers, but also builds loyalty among current customers.”

Hub’s Jon Giegengack, co-author of the study, characterized the SVOD companies as transforming themselves “from technology companies that distribute content, into entertainment companies that create it.” He also predicted that in the future, “the share of total TV time may turn out to be a more important way to evaluate platforms than looking at the number of subscribers.”

MEANWHILE, ON THE OBITUARY SIDE

While all these promising and upbeat OTT developments were underway, the video undertaker was also keeping busy. Many OTT services just quietly slip away, but some high-profile ventures get a farewell salute.

For example, “SeeSo,” a comedy SVOD service from NBCUniversal which debuted in January 2016, is running its final feeds this month. No one issued a body count on how many customers the $3.99 per month service ever attracted.

“Fullscreen Media” (backed in part by AT&T in its joint venture with The Chernin Group) will cut off its SVOD spigot in January. Again, there was no official tally of users, but sources suggest it had “hundreds of thousands” of viewers, although it was unclear if that included one-time tune-in audiences.

And Comic-Con HQ, a streaming VOD channel that began early last year as a partnership between San Diego Comic-Con and Lionsgate studio, was cut off last month. Its content—much of it from Lionsgate, has been licensed to other streaming services, including Roku, Amazon Prime and TubiTV.

In other words, the OTT/SVOD landscape continues to be dotted with promises, solid trends and a few corpses.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

When Comcast unveiled plans to integrate YouTube videos into its X1 cable platform, the cable behemoth solidified a trend that will bring insurgent content into mainstream video delivery. Comcast had already brought long-disdained Netflix onto X1, but even more significant, the YouTube deal coincided with the birth of YouTube TV, which offers 40 channels of live television—a potential competitor to Comcast’s core video package.

According to FX Networks Research, of the 455 scripted shows on all platforms in 2016 (up 8 percent over the previous year), 93 of them were made-for-online channels, compared to 145 for broadcast channels, 36 for pay TV and 181 for basic cable. At about the same time last month, Vimeo confirmed plans to expand its original content production and bolster its transactional video-on-demand (TVOD) relationship with BBC Worldwide.

These deals accelerate the momentum toward conflating broadcast/cable and online programming. Although it’s unlikely that the ventures are intended to stave off future offerings that could be available on ATSC 3.0 services, the new developments create potential hurdles for broadcast initiatives on that emerging platform.

Moreover, the evolving connections come at a time when original online content is exploding. In the past three years, the number of original scripted online series has tripled (much of it on Netflix and Hulu) while the number of original series on broadcast, cable and pay TV channels has remained relatively stable, according to a December analysis by FX Networks Research, a unit of the Fox-owned cable programming channel. Of the 455 scripted shows on all platforms in 2016 (up 8 percent over the previous year), 93 of them were made-for-online channels, compared to 145 for broadcast channels, 36 for pay TV and 181 for basic cable.

ORIGINAL CONTENT SELLS
Analysts have noted that the move toward original scripted programming reflects each platform’s effort to charge more for commercials and to attract critical attention.

A separate study by 451 Research found that one in five U.S. streaming subscribers now pay for three or more services, with investment in original content most often cited as a key reason to sign up. The report found that consumers are creating their own bundles of video services, starting with Netflix (bought by 95 percent of multiple streaming consumers) and Amazon Video (82 percent). Depending on preferences, viewers then add à-la-carte platforms including Hulu, HBO Now and iTunes, according to the report.

This entire process also continues to blur the differentiation between program sources. As technology makes it more efficient (and cheaper) to produce content with high visual quality, and as on-demand viewing rearranges viewers’ consumption patterns, it is becoming harder to identify the source of content.

As if that matters.

When “Fox Now,” a revised streaming app from Fox Networks Group, debuted last month, it blended content from the Fox broadcast network, FX and the National Geographic Channel; shows from Fox Sports are expected to be added this Spring. Lachlan Murdoch, executive chairman of 21st Century Fox, pointed out that the video app with multiple network programs makes it a more effective advertising vehicle.

Networks and stations struggle to establish and maintain brand identity. But the unification of content on screens—both fixed in-home displays and portable devices—is erasing such status.

“We’ve now completely pivoted to a couple key principles, one of which is [that] we’re going to give the customer the best interface, and we’re going to do it with the content they want,” Comcast CEO Brian Roberts said at a Morgan Stanley Technology, Media & Telecom conference last month. By making online content available through the X1 set-top box, Roberts intends to become “an aggregator of aggregators,” carrying content that “at times is competitive.”

“Our strategy is to get most of our customers in a bundle,” he said. “Every time people take one more product, they churn less.”

To promote the integration, Comcast ran in introductory sampling in early April. Xfinity X1 customers had unlimited access to Netflix’s entire U.S. catalog for a week, including original series such as “House of Cards,” “Stranger Things” and “Orange Is the New Black.”

GOING GLOBAL
The melding of online and broadcast content also has a foreign flavor. For example, BritBox—a $6.99 per month online, ad-free subscription VOD package of BBC and ITV programs—debuted in the U.S. last month. The online service streams selected British soap operas and other shows within 24 hours of their U.K. broadcast premiere airings.

BritBox also includes libraries of classic content (much of already seen via PBS and other U.S. channels), such as “Prime Suspect,” “Absolutely Fabulous,” “Sherlock Holmes,” “Brideshead Revisited,” “Agatha Christies’ Poirot: The Early Cases,” and “Miss Marple.” There is also “Very British Beginnings,” a smörgåsbord of shows featuring young performers who went on to become stars, such as Emily Blunt, Daniel Craig and James Corden.

BritBox executives acknowledged that its direct-to-consumer launch is the first step toward integration with other distribution channels, such as Amazon Channels and ventures such as Comcast’s X1 aggregation of OTT and SVOD services.

Amazon Channels, which debuted barely 18 months ago, exemplifies the blur between streaming and conventional video content. An option for Amazon Prime customers, Amazon Channels now carries about 100 SVOD services, including HBO and Cinemax. Although Amazon has not released usage data for Channels, the company claims it has “millions” of Prime video subscribers.

Michael Paull, vice president of digital video at Amazon, called Channels “a validation of this platform idea,” adding that it gives consumers “one simple integrated experience” that doesn’t require subscribers to jump among apps, according to a published report. He called it an “evolution of the TV space.”

ADDING MOBILITY
Perhaps the most challenging aspect of the integrated broadcast/online programming juggernaut is the role of mobile. Access via portable handsets is a linchpin of the ATSC 3.0 initiative, recognizing the growing role of mobile video.

Several recent reports underscore that viewers—especially millennials—rely on mobile access. The latest Ooyala Global Video Index report found that mobile viewing accounts for 54 percent of global video plays, up from 46 percent a year earlier. (In North America, mobile viewing is barely 50 percent, far less than in Europe and the Middle East.)

“Where online content once was seen as supplemental to traditional TV, it’s now replacing it,” according to Ooyala, a Silicon Valley-based provider of media analytics technology. It also observes that advertising is shifting. Ooyala expects that marketers will spend $114 billion on mobile advertising in 2018—well behind, but catching up with the $215 billion spent on TV advertising.

“Mobile video—in one form or another—will continue to grow as younger users who have been tethered to their mobile devices since birth continue to play a larger role in the ecosystem,” the report says. The report singles out the success of smartphone viewing, which accounts for 47 percent of time spent watching videos in the youth demographic—mostly “long-form” content rather than “snackable” short-form videos.

Again, that finding suggests both a challenge and an opportunity for broadcasters, who intend to transmit content via their forthcoming ATSC 3.0 capabilities.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atinfo@arlencommunications.com.

ALEXANDRIA, VA.—Everyone involved with examining how cable systems will retransmit broadcast nextgen ATSC 3.0 signals concurs on one point, although they say it in different ways: “It’s too early.” “Still pretty vague.” “Will evolve over time.” “A problem that won’t exist soon.”

But broadcasting and cable technical executives are already discussing how multichannel video program distributors (MVPD) will handle “redistribution” (the new preferred term) of the forthcoming all-IP ATSC 3.0 signals. The recently created Specialist Group on Conversion and Redistribution of ATSC 3.0 Service has held several preliminary meetings on the topic, and the Digital Video Services committee of the Society of Cable Telecommunications Engineers (SCTE) will make its first plunge into redistribution issues during its quarterly meeting in San Diego this month.

Mark Richer, ATSC presidentBABY STEPS

Mark Richer, president of the Advanced TV Systems Committee, expects that ultimately 3.0 redistribution decisions will be based on business and regulatory factors, not technology.

“ATSC 3.0 is specifically designed to be carried over broadband on IP networks,” Richer said. He envisions that “many layers” of the 3.0 signal could be pulled in by cable operators. “There is no big technical problem,” Richer said, but he emphasized that ATSC’s role is focused on establishing standards, not on business decisions.

The new ATSC specialists group is formally called Technology Group 3, Subcommittee 37 (TG3/S37), or “S37.” A broadcast executive on the subcommittee who insisted on anonymity (as did a half-dozen other project participants contacted by TV Technology) acknowledged that there will be “a difference in timetables” between broadcast and cable organizations as the discussions evolve.

“Each group is scoping out what to deal with in conversion and redistribution,” the source said. “Right now, it’s just baby steps.” He pointed out that various organizations are at different stages in their IP deployment process, and noted that there are “other challenges” as broadcasters move away from a TV-centric architecture into the IP environment.

After a meeting of S27 members in New York last month, a broadcast technology executive in attendance characterized the situation as “still very early.”

“Each group is scoping out what to deal with,” he said, citing broadcasters’ concerns about how to convert signals from 3.0 to a variety of cable and satellite environments. “The big problems are just beginning to be discussed.”

There is no timetable for S37’s agenda or decisions/recommendations.

As ATSC 3.0 evolves, broadcasters envision using it for many interactive as well as non-video services, most of which fall far beyond traditional cable retransmission agreements. Many analysts expect a long transition period since 3.0 is not backward-compatible, and hence current TV receivers will not be able to pick up signals.

Dean Stoneback, senior director, engineering and standards at the Society of Cable Telecommunications Engineers, pointed out that, “there’s no need to convert 3.0 to 1.0 until the 1.0 ceases to exist—until broadcasters turn off the 1.0 signal.” Stone-back said his group’s initial discussions at the December DVS committee meeting will examine how to handle backward-compatibility as well as issues such as how to ingest 3.0 content.

SCTE is an “observer” at ATSC and has been invited to attend future S37 meetings, which will explore redistribution.

One goal of the current discussions is to establish procedures for MVPDs to carry ATSC 3.0 content, probably by converting it to the current ATSC 1.0 standard, which they distribute. According to its mandate, the ATSC TG3/S37 “develops and maintains ‘Recommended Practices, Standards’ and other documents relating to the conversion and redistribution of ATSC 3.0 services.”

Another cable technology executive familiar with the ATSC 3.0 process pointed out that the 3.0 switch from 8-VSB modulation to orthogonal frequency division multiplexing (OFDM) is just one of the challenges facing cable redistribution. In addition, the move away from MPEG-2 transport will mean that existing set-top boxes would be unable to receive the ATSC 3.0 signals. Moreover, 3.0 will introduce new codecs and an application layer based on HTML5—all of which means that 3.0 will face a lack of existing infrastructure.

He also raised the issue that there is “no answer yet about who will actually set the standards and specifications” for redistribution, although he contended that “the problem will eventually be resolved.”

“That’s probably something ATSC will be responsible for” since both the input and output will be in ATSC formats, he added.

As for carriage of non-video IP content, he said “that’s in the application layer” so it’s a matter for business strategy and “outside the scope of what we can discuss” on the technical side.

A veteran broadcast executive who has long been active in ATSC said that he expects “advanced services and features of 3.0 will require new agreements that will be established in future retransmission negotiations.”

Richer said that MVPDs could pull in many of the layers of 3.0, underscoring his contention that there is “no big technical problem,” but that eventually business decisions will determine cable or satellite redistribution of 3.0 signals.

NEXT STEPS FOR NEXT-GEN TV

ATSC expects to confirm its 3.0 standard in early 2017, and then it will take several years to deploy technology through the U.S. broadcast infrastructure. (In Korea, which has adopted the ATSC 3.0 standard already, TV stations will begin beaming 3.0 signals in February, to prepare for wider transmission of the signals in time for the 2018 Winter Olympics there).

Stoneback of SCTE pointed out that since cable uses quadrature amplitude modulation (QAM) and telco TV systems generally use IP, the arrival of broadcast 3.0 faces technical hurdles aside from the current total lack of equipment.

Another technology consultant observed that the challenge involves MPEG-2 transport stream versus multicast User Datagram Protocol (UDP)/IP. He expects that this “minor technical problem” will be resolved as cable systems themselves transition to IP-delivered services.

A broadcast technology executive familiar with the 3.0 process also pointed out that the redistribution negotiations will eventually encompass factors such as the SMPTE standard for compressed audio/video and the High Definition Serial Digital Interface—all of which must be lined up for decisions about how/if they are included in the redistribution plans.

Hence, the importance of these early-stage technology discussions.

The S37 subcommittee includes cable and satellite distributors as well as broadcasters and technology suppliers. NCTA, CableLabs and Comcast are members of ATSC, as are many equipment companies (both receiver makers such as LG, Samsung and Sony, and transmission/studio product manufacturers, such as Gates Air, Harmonic and Panasonic) plus broadcast station groups and networks and program producers.

All sides are awaiting a Notice of Proposed Rulemaking from the FCC dealing with ATSC 3.0. In response to an FCC Public Notice last spring about plans to explore ATSC 3.0 policy, the American Cable Association and NCTA, which represents cable operators and vendors, opposed any rush to action.

“Cable operators have no legal obligation to carry the ATSC 3.0 signal during the transition,” NCTA said in its filing last May. “Carriage of an ATSC 1.0 signal will continue to fulfill cable operators’ obligations.”

In testimony to Congress in September, FCC Commissioner Ajit Pai (a possible temporary or permanent FCC Chairman after the Trump transition next month) said he would like to see the FCC’s ATSC 3.0 rulemaking proceed “no later than the end of this year.” That is much faster than current FCC Chairman Tom Wheeler expects. Pai told a Senate oversight committee that, “just as the United States is leading the way on 5G in the mobile space, so too should we be at the forefront of innovation in the broadcast space.

“Let’s allow broadcasters who wish to move forward with ATSC 3.0 to pursue this pro-consumer path as quickly as possible,” Pai said.

AFFECTED BY THE SPECTRUM AUCTION

Although the ATSC 3.0 transition is unrelated to the current broadcast spectrum auction, some analysts have suggested that TV station owners may factor the expense and opportunities of future IP services into their auction strategies.

After his remarks to a Media Institute luncheon in Washington last month, NAB President/CEO Gordon Smith waved off questions about whether the auction and 3.0 implementation are intertwined. He said that the two issues will unfold separately.

“The auctions will be long over before 3.0 reaches the marketplace,” Smith said in response to a query from TV Technology. “The outcome of the auction is not in our hands and we hope” it progresses smoothly.

“There are many complexities in the move to 3.0,” Smith said, after citing the oft-repeated benefits the technology will bring to broadcasters. He acknowledged that the 3.0 transition will be “expensive” but that his members “are anxious to advance their businesses” through the services it will enable. This is an option that recognizes good policy,” Smith said.

Meanwhile, NAB has continued to challenge the FCC’s efforts to accelerate the post-auction repacking of local airwaves. In reply comments for the FCC proceeding about spectrum repacking, NAB argued that the 39-month timetable is unfeasible and it urged the commission to reject cable operators’ arguments that they should not be subject to must-carry and retransmission requirements for TV stations that temporarily share channels.

Such decisions could eventually have an impact on cable’s carriage of 3.0 signals if the repacking process extends for four years or longer—in other words, if 3.0 rollout occurs during repacking.

NAB concluded that “the record of this proceeding” suggests that the commission’s proposed repacking timetable “is unlikely to produce a workable and efficient plan in practice.”

CTIA, which represents wireless carriers, has urged the commission to stick with its 39-month timetable, which would give wireless providers early access to the acquired airwaves. In the process, carriers could get a jump on services that may eventually be developed for 3.0 non-broadcast features, according to analysts who follow inter-industry developments.

All of these policy possibilities mean that the current low-key S37 “redistribution” technical discussions may simmer for a while before boiling up in financially charged negotiations when the market is ready for 3.0 services.

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

For more on ATSC 3.0, see TV Technology’sATSC 3.0 silo.

LAS VEGAS—For its 50th anniversary, the Consumer Technology Association’s annual CES will focus on the airwaves. Unlike the debut 1967 CES in New York, however, where black-and-white TV sets, stereos and transistor radios were in the spotlight, the 2017 edition (Jan. 5-8 in Las Vegas) will see a greater emphasis on broadband wireless use of airwaves. And while hundreds of TV and video products and services will be on display, this doesn’t appear to be a “breakthrough” year for new technology, although there will be countless updates of the fast-selling 4K UHD TV devices plus advances in high dynamic range (HDR) video, wide color gamut, virtual reality and internet-connected smart TVs. Artificial Intelligence (AI), a building block for autonomous vehicles and other systems, will also be widely seen at exhibits and in private viewing suites.

In today’s tenuous political climate, CES is expanding its “Innovation Policy” conference, where Federal Communications Commission and Federal Trade Commission members will explain the Washington viewpoint—even though some of them will soon not be calling the shots while the presidential transition is in still in effect.

Karen Chupka, senior vice president of CTA and overseer of CES, believes that “TV is still the centerpiece” of the show, however, the focus has shifted to non-broadcast services.

CTA President Gary Shapiro (L) and Karen Chupka, senior vice president of CTA and overseer of CES, at last month’s CES Unveiled event in New York.

“As people are watching content from streaming 4K players and other sources, they want to be in that TV atmosphere,” Chupka said, referring to the continuing appeal of the large-screen flat panel receiver versus handheld video displays. She added that the “quest for better sound ties into the advanced video environment,” pointing to the new High Resolution Audio exhibits plus other entertainment features that are still a major part of CES.

“The continued access to content, even on different platforms, [affects] how much is being generated and also the next generation of viewers,” Chupka said, during a 2017 CES preview event in New York last month.

ATTRACTING NEW MARKETS

CES (no longer called the “Consumer Electronics Show” by CTA, which itself was previously known as the Consumer Electronics Association), has accelerated its efforts to bring program producers and advertisers/marketers into the mix. “C Space” conferences and exhibits will focus on content development, including collaborations between tech and advertising/marketing companies. As part of that program, “The Entertainment Summit,”on Friday afternoon will examine creativity including the types of production technologies emerging for film, gaming and TV shows, as well as multiplatform content.

CES has also become a meeting place for dozens of media-connected groups. Gatherings of the National Association of Broadcasters’ TV Technology and Radio Technology Committees have “become a tradition over the past few years as broadcasters’ attendance at CES has increased,” an NAB spokesperson told TV Technology. The Advanced Television Systems Committee, Cable Television Labs and CTAM: the Cable & Telecommunications Association for Marketing will again bring groups to CES for show floor tours and for meetings with business and technical prospects and partners.

Among nearly 40 ancillary events surrounding CES in Las Vegas is the annual International Conference on Consumer Electronics (ICCE) on Jan. 8-10, produced by the Institute of Electrical and Electronics Engineers, featuring presentations by electronics designers and engineers. Sessions will look at technical aspects of ATSC 3.0, cloud computing, “the road to the ultimate virtual reality,” mixed reality, 3D body processing and “technology accelerating the immersive consumer experience.”

Team Lightbulb's “Broadband Conference”on Wednesday will examine “intelligent transportation,” 5G, fiber and Internet of Things (IoT) and promises to look at “Next Gen broadcasting and broadband IP integration,” ATSC 3.0 and FirstNet wireless broadband public safety network.

“Sports Business Innovation,” a conference presented by Turner Sports on Thursday and Friday as part of the C Space agenda, will focus on ways that technology is being used to alter the sports business landscape. Speakers will look at new tactics that affect the sports industry.

FOR POLICY WONKS

At an opening afternoon SuperSession, FCC Chairman Tom Wheeler and Federal Trade Commission Chairwoman Edith Ramirez are scheduled to chat individually (30 minutes each) with CTA's President/CEO Gary Shapiro about the challenges their agencies face, even as both of them prepare to leave their seats.

Later that day at an Innovation Policy conference session entitled "2017 Preview: FCC and FTC Commissioner Roundtable," other commissioners will discuss "critical regulatory and policy issues, including: spectrum allocation, privacy, accessibility, the Internet of Things, regulatory reform, disruptive innovation and technological convergence." At press time, FCC Commissioner Mike O'Rielly and FTC Commissioner Maureen Ohlhausen (thre presumptive agency chairman after the Trump transition) are confirmed participants, with the FCC;s Mignon Clyburn, The FTC's Terrell McSweeny and possibly others expected to join them.

Other sessions on the Innovation Policy agenda (spread out over Thursday, Friday and Saturday) will involve government officials and tech entrepreneurs examining regulatory implications of topics such as the IoT, virtual and augmented reality, mobility and sustainability.

FOCUS ON 5G

Although exhibitors continue in their tradition of keeping their product introduction news close to the vest until the show opening, the CES keynotes are a good harbinger of what will be the hot topics in the conference rooms and on the exhibit floors in Las Vegas.

At the pre-opening keynote on Wednesday night, nVidia President/CEO/Founder Jen-Hsun Huang is expected to focus on the chipmaker’s visions for AI, VR, smart cars and other applications.

The show’s six major keynotes include presentations from Qualcomm CEO Steve Mollenkopf about the “revolutionary effect of 5G” and from Huawei Consumer Business Group CEO Richard Yu, who will focus on mobile technologies and their ability to integrate artificial intelligence, virtual reality and connected systems. At the pre-opening keynote on Wednesday night, nVidia President/CEO/Founder Jen-Hsun Huang is expected to focus on the chipmaker’s visions for AI, VR, smart cars and other applications.

SuperSessions, such as the Thursday's “Stoked on 5G” program, will delve deeper into high speed wireless services, including a presentation by Ericsson Senior Vice President/Chief Technology OfficerUlf Ewaldsson.

“We’re seeing the continued trend toward connectivity, with sensors being built into every device,” said Chupka, whose official title is CTA senior vice president for CES & Corporate Business Strategy. She also points to the growth of VR applications and “expects to see a lot more, not just gaming content.” For example, Fox is expected to announce new VR ventures.

Chupka extolled the need for long-term visions as ever more content is being generated and “as viewers grow up, there will be different trends.”

“As you try to scale some of these things up, it’s a matter of quality,” she added. She also noted the migration of vendors into new categories, for example Sony’s participation in the “Augmented Reality Marketplace.” one of about 20 focused zones/pavilions where small and large companies showcase new products in evolving categories. Other marketplaces range from the new “Sleep Place” (dealing with health/sleep technologies) to drones and cybersecurity.

CES BY THE NUMBERS

According to Chupka, CTA is “trying to cap attendance” at 165,000, although she admitted that a final body count may approach the 176,000 attendees who came to the 2016 CES. About 3,800 exhibitors will show their wares, equivalent to the number in the past few years, on 2.4 million square feet of floor space spread over three major venues: Tech East (the Las Vegas Convention Center, Westgate Hotel (formerly Hilton) and adjacent properties; Tech West (Sands Expo Center and Venetian Hotel) and Tech South (Aria Hotel and nearby hotels, home of C Space). (Demand for space should ease up once the Las Vegas Convention Center completes a $1.4 billion expansion that is expected to be complete by 2023).

Chupka noted that in the shifting technology environment, a growing number of exhibitors will showcase emerging technologies such as robotics, wearables, augmented and virtual reality, entertainment/content, drones and driverless technology. She also pointed out that “Eureka Park,” an area at the Venetian Hotel for start-up companies will have 600 exhibitors, mostly in 10-by-10-foot booths, a 20 percent increase from the previous show and nearly triple the number of start-ups as five years ago, when Eureka Park debuted.

THE MOOD

CES will open just after the holiday shopping season, which often sets the mood for retailers and distributors attending the show. In its pre-holiday estimate, CTA expected that 4.5 million 4K UHD television sets would be sold this season, bringing the 2016 total sales of UHD receivers to 10 million. That’s 40 percent more than in 2015, with sales moving far faster than HDTV sets sold during their first years on the market at the turn of this century.

Nonetheless, CTA’s sales forecasts for 2017 show modest growth for the flat-panel TV category: about $19.7 billion in U.S. wholesale sales compared to $19.5 billion in 2016. About 20 million 4K UHD sets will be sold in 2017, according to CTA estimates.

Overall, sales in CTA’s five largest categories are expected to decline slightly in 2017, including a $2 billion drop in smartphone sales, about half-billion dollars falloff in tablet sales plus small declines in laptop and desktop computer sales. Those top five categories will still represent 49 percent of total industry sales of $225.1 billion in 2017 compared to 45 percent of $224.9 billion total sales this year.

CTA's 2017 forecast indicates that the fastest growth will come from new categories such as a quadrupling of sales of VR/AR eyeware, which will jump from $32 million in 2016 to nearly $1.1 billion in 2017 and a doubling in 360-degree cameras from $31 million to $65 million year-to-year sales.

“Without these [new] categories, industry growth would be negative,” according to the CTA report. “It stands to reason these products as well as future products will continue to grow the industry as household ownership of several product categories reach their maximum penetration.”

CTA President/CEO Gary Shapiro pointed out, “manufacturers are introducing an increasing variety of 4K UHD displays at a range of price points. Many of these displays include new innovations like HDR wide color gamut that make the viewing experience more immersive.”

THE HISTORY

To celebrate its 50th anniversary, CES will honor long-time exhibitors. Panasonic is the only vendor that has exhibited in all 50 consecutive CES shows. Thirty-seven companies have had booths for more than 40 years; 10 of them were at the 1967 premier event (which had 117 exhibitors and 17,500 attendees) and will also have booths in Las Vegas next month. They include 3M, Lenovo, Memorex (now MEM-CE), Philips, Sharp, Sony, Toshiba, Voxx International and Westinghouse.

THE CONTENT CONNECTION

“C Space,” an enlarged content-oriented conference and exhibit area formerly known as “Entertainment Matters,” will be based at Tech South in the Aria Hotel. Programs there will include “C Space Storytellers Sessions,” the long-running Digital Hollywood conference and “Marketing Reinvented” presented by MediaLink.

The annual Digital Hollywood conference, at sessions spread over Wednesday, Thursday and Friday, will examine topics such as hybrid TV, over-the-top and second-screen content, as well as immersive VR, Contextual and 360⁰ Video Advertising and Internet TV, including multichannel network programming.

At a short conference on “The Continuing Rise of Short Form Video,” on Friday morning, NATPE and CTA will unveil results of their latest research on the adoption of YouTube and other short videos.

“Virtual Reality: The Future is 360,”is a three-session conference on Thursday at which technology and production experts will examine consumer and business applications of VR.

Aisha Tyler

To serve as liaison between Hollywood and the tech community, CTA has appointed Aisha Tyler as this year’s “CES Ambassador.” Tyler, an actress, director, author and comedian, hosts CBS’ “The Talk” and is a regular performer on the CBS series “Criminal Minds,” as well as an active gamer and self-described tech enthusiast. She is also the creator and host of the “Girl on Guy” podcast and just directed her first movie.

“Aisha has torn down barriers for women and diversity in technology, effortlessly integrated and encouraged the use of tech in everyday life and redefined what it means to be a ‘gamer,’” Chupka said.

Tyler explained that, “As a podcaster, author, producer and filmmaker, I can attest to how technology has not only made my life better, but more creatively robust, dynamic and productive in every way. Technological innovation is my artistic secret weapon."

Chupka expects that CES stages and show floor will continue to be peppered with celebrity appearances, including “a lot of surprises this year.”

“We’re seeing non-traditional companies taking a presence because they see themselves in the tech space,” she concluded.

For more information on the 2017 CES, visit www.ces.tech.

For the latest news on 2017 CES, visit our sister publication and publisher of the official CES Daily, TWICE.

With nearly two-thirds of American viewers now using a subscription video on demand (SVOD) service, the market is primed for a different way to watch TV. The impact and opportunities are immense, especially as broadcasters create auxiliary applications for ATSC 3.0 services.

As the recent IBM Cloud Video report “Everybody Wants to Rule the Streaming World” emphasized, SVOD has “reshaped the way we enjoy television.” It notes that rather than spurring cord-cutting, SVOD options such as Netflix and Amazon Prime have added “to the smorgasbord of video content we already enjoy.”

NEW CONSUMER BEHAVIOR

The study from IBM’s ClearLeap unit is one of several research evaluations during the past few months that affirm that viewers have embraced SVOD and over-the-top (OTT) streaming video programs. Even with perceived problems such as high costs and sometimes-inferior video quality, the ClearLeap study explains that SVOD has “sparked new consumer behaviors,” such as bingeing, which will affect future video distribution strategies.

The implication: infrastructure needs to be built to handle these viewing preferences.

“SVOD services have been adopted by U.S. consumers faster than any other pay media service,” ClearLeap said. Even more important than the 63 percent of consumers who “spend a significant amount of viewing time with them... nearly half of those with SVOD and pay television watch their streaming services as much as, or more than, cable.”

ClearLeap’s report, based on more than 1,000 consumer interviews, acknowledged that Netflix is overwhelmingly responsible for the intense SVOD viewing. But the study pointed to the growth of other existing services, especially Amazon Prime and Hulu, and it augurs opportunities for future newcomers to enter this realm.

Fig. 1 (Photo credit: IBM Cloud Video)

Like other studies, the ClearLeap evaluation put extensive emphasis on the importance of mobile video in the SVOD/OTT agenda. But it also reported that 55 percent of respondents say they primarily use a smart TV, Roku, Apple TV, game console or other connected TV device to watch their favorite streaming service (Fig. 1).

There are also predictable findings about the age distinction: 16 percent of millennials and 18 percent of 30–44 year olds favor smartphone viewing. Seniors, not very much.

Among the most fascinating findings in the ClearLeap report is an evaluation of the problems that turn off viewers and would prompt them to quit using an SVOD service. Again, this is valuable planning information for future programmers and technology providers, as well as a lesson already known by today’s SVOD leaders.

In response to the question of “What would make you cancel an SVOD subscription,” the top answers were: too many ads (27 percent), high price (25 percent), too few shows (20 percent) and technical problems (17 percent).

On that last point, 15 percent cited inadequate video quality and 12 percent reported problems with the audio being out of synchronization with the video image (Fig. 2).

Almost half of SVOD viewers complained about frequent buffering problems.

Fig. 2 (Photo credit: IBM Cloud Video)

As the ClearLeap report explained, “These technical problems can occur anywhere in the network,” notably under-provisioning of bandwidth by Internet service providers. Again, that looks like a competitive lesson for over-the-air transmission of IP content. In a related issue, about 30 percent of millennials surveyed called mobile data caps their most serious concern about wireless access.

“As live streaming grows in importance and prevalence, content providers must have the technology to handle massive spikes in viewer traffic at any given time to prevent site crashes and streaming disruptions,” the ClearLeap report concluded. “Data can help SVOD services better understand viewing habits and plan for peak demand.”

SUPPORTING OPINIONS ABOUT SVOD AND OTT ABOUND

ClearLeap is not alone in its optimism about the appeal of SVOD and related OTT ventures via wired and wireless transmission. Limelight Networks, in its “State of Online Video” report, observed that about 80 percent of millennials subscribe to at least one OTT service, and 39 percent of them watch at least seven hours of online video per week—significantly more than people in other demographics.

Limelight’s study also observed that young viewers are upping their online viewing patterns. Barely 16 percent watch only 1 to 2 hours per week, while the number consuming more hours has steadily increased. It also noted that millennials were “significantly more amenable” to terminating a pay-TV subscription if they could access the content they want online directly from the content owner (23.7 percent compared with 16.6 percent for the rest of the population).

And again, Limelight found that the smartphone is the favorite device that millennials use to watch most online video, followed by computers or laptops. Viewing via a TV connected to a streaming device is the device of last resort.

“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, Limelight’s vice president of global marketing. “Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”

Separately, Ooyala’s “State of the Media Industry 2016,” published in early summer, concluded that the lessons learned by “the TV industry... in its move to digital” are the basis for continuing appreciation that “differentiated content... is key to building a strong brand in the cluttered digital ecosystem.” Ooyala’s latest report is a follow-up to its “State of the Broadcast Industry 2016” in which Ooyala called 2016 the year in which OTT becomes the “gateway to broadcast’s future.”

The Ooyala report also emphasized the “mobile first” imperative for digital distribution.

Now this is where the research and the forecasting get tricky and intertwined. Much of the research incorporates both SVOD and other online video consumption, including short-form content (think YouTube or Periscope) as well as program-length content. And all of this research is based in part on the assumption that viewers won’t necessarily know the difference or care about the originating source—so long as they can find what they want to see.

For example, a July report from the Zenith, an agency of the global marketing firm Publicis Media, insisted that mobile access has replaced fixed devices as the dominant platform for receiving online video. This study found that consumers spend an average of 19.7 minutes daily viewing online videos on smartphones and tablets compared to 16 minutes on fixed devices, which includes smart TVs and desktop computers.

“This represents a 39-percent leap for mobile over last year’s figures, when 14.2 minutes were spent viewing mobile video,” the report concluded. It said that “fixed” video consumption will be static this year, thanks to a rise in viewing via smart TVs, which offset declines in desktop viewing. Zenith expects that mobile video consumption will grow 33 percent in 2017 and 27 percent in 2018, to reach 33.4 minutes a day.

“Mobile devices will account for 64 percent of all online video consumption in 2018,” said Zenith, suggesting that the growth will trigger a boom in online video ad spending, which it expects to go up by about 20 percent per year.

Several of the upbeat reports scale the growth of the industry. For example, Digital TV Research, in its “Global OTT TV & Video Forecasts” envisions that by 2021, such ventures in 100 countries will generate $64.8 billion, up from $4.47 billion in 2010 and $29.4 billion last year. The company predicts that despite impressive growth in Asia, the United States will remain “the dominant territory for online TV and video revenues—rising by $8.2 billion to $22.8 billion between 2015 and 2021.”

DTR’s forecast put strong emphasis on the growth of advertising VOD (that is, ad-supported services). It predicted that by 2020 AVOD revenues globally will amount to $15.4 billion, compared to $14.6 billion for SVOD by that time. The research firm forecasts 383 million SVOD subscriptions by 2021, up from 21 million in 2010 and 163 million at the end of last year.

GROWING PAINS: SPLINTERED MARKETS, REGULATORY HURDLES

Although the SVOD and OTT markets have evolved largely without regulatory restrictions —if you don’t count that “minor” barrier of network neutrality that can affect their carriage relationships—the freedom from policymakers is not assured. (And of course, the net neutrality legal dispute is still in play.)

Anticipating potential growing pains, the newly formed “TV Neutrality Alliance” wants to make sure that online video distributors (OVD), such as the Telletopia Foundation, which created the group, has access to broadcast TV programming under the same rules as multichannel video program distributors (MVPDs, such as cable and direct-satellite operators).

At the same time, the new alliance wants to assure that OVDs with multichannel content but no broadcast station signals—such as Amazon, Netflix, YouTube and others—will not face existing MVPD regulations about retransmission consent and payments.

“Our proposed modification to the MVPD definition is intended to spur innovation for new broadcast-TV OVDs without creating unnecessary regulatory burdens for on-demand and original content OVDs,” said Michael Librizzi, cofounder and CFO of Telletopia.

Like any emerging interest group, the TNA claims that its goal is to unlock “the true potential of Internet-based broadcast” and believes its approach will create “a more open competitive environment.”

These regulatory options add to the complexity and uncertainly of the emerging SVOD/OTT/online video markets. And that’s not all.

“We are entering a new phase in the evolution of OTT video,” said Colin Dixon of nScreen Media, a California research firm. In a late July research note, he identified four signs that the OTT video economy is “splintering,” which he said “threatens to slow or even derail the explosive growth” of recent years.

Dixon cited “Content Disaggregation,” such as the CW TV network’s broken relationship with Hulu so that it can distribute its hit shows exclusively through its own OTT platform and its library titles through Netflix, plus “proprietary ecosystems.” He argued that “app proliferation” is a “mess” for consumers, since they have to accumulate “more and more apps on their devices” in order to watch shows from different sources. And he believes that “lack of data standards” threatens the “lifeblood of the video business.”

“There are no universally accepted standards in any of these areas for the gathering, format, storage or interchange of the data,” Dixon said. “It is hoarded to gain competitive advantage, put into proprietary formats to gain financial advantage, and selectively mined to gain a marketing advantage.

“In the long-run, this splintering of the industry can only have one result,” Dixon continued. “It creates a nightmare for consumers as they try and figure out when and where the content they want can be found. And we all know what happens when things get complicated for consumers. They sit on their hands.”

Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atinfo@arlencommunications.com.

LAS VEGAS—As if the alphabet soup of TV technology isn’t confusing enough, CES (no longer called the “Consumer Electronics Show”) dished up an expanding menu of familiar acronyms—HDR, UHD, VR, OTT—as well as new ingredients, including ULED, UAV (aka “drones”), Wi-Fi HaLow and SON, along with LG’s rollable OLED screen. Even the show’s organizer has substituted “Technology" for "Electronics” and is now CTA, the Consumer Technology Association.

Curved TVs on display at CES (Photo courtesy CTA)

CTA’s electronics extravaganza in early January was spiced with pronouncements and demonstrations that ATSC 3.0 is nearly ready for the market plus exhibits and speeches that often generated contradictory outlooks about what mobile TV will become and how the upcoming broadcast spectrum incentive auctions will reshape the industries involved. FCC Chairman Tom Wheeler promised that the upcoming spectrum auction will be “transformational,” and a “huge opportunity” for broadcasters, although he offered few details.

CES exhibitors showcased the predictable huge-screen prototypes, such as LG’s 98-inch 8K/High Dynamic Range screen and TablerTV’s 200-inch (16x8-feet) 8K LCD "TTV Wall." There were drones galore and thousands of media executives with almost as many perspectives on how traditional linear TV will fit into the new "ecosystem," a continually popular term bandied around CES.

BETTER & SMARTER PIXELS
Merely calling CES “overwhelming” has become an understatement. “Perplexing” may be a better term, although that description has applied for many years. The unceasing avalanche of hardware vendors—and now software and systems providers—who represent expanding categories makes it harder to gauge which technologies will survive, let alone thrive.

For example, in the video category—which now includes online/broadband and mobile delivery as well as broadcasting—the long-anticipated High Dynamic Range video display format was ubiquitous throughout CES, with its message of "better pixels." But the primary high-profile HDR supporters showed two variant approaches. The new Ultra HD Alliance protocol for HDR authorizes slightly different versions for OLED and LCD to qualify for the new “Ultra HD Premium” designation.

Pat Griffis of Dolby Labs, a longtime HDR advocate, said during a panel discussion that the formats are not a barrier. “They are not mutually exclusive,” said Griffis, executive director of technology strategy in Dolby’s Office of the CTO and SMPTE committee chair. “We’re on the same page. HDR 10 and Dolby Vision are complementary.” He emphasized the objective: “to reproduce every color we can see as human beings.”

UHD Alliance spec options for HDR displays allow a combination of either more than 1,000 nits peak brightness and less than 0.05 nits black level, or more than 540 nits peak brightness and less than 0.0005 nits black level. Devices also must display more than 90 percent of P3 colors to meet the requirements for the UHD Alliance logo.

The reigning TV set kingpins—LG Electronics and Samsung—used different HDR versions—and different Las Vegas TV stations—for their live broadcast demonstrations of UHD in their CES exhibit booths and hotel suites. Samsung’s demo came via Sinclair Broadcasting’s KVCW channel 29, while LG used KHMP channel 18, owned and operated by DNV Spectrum Holdings.

Adding to the name game confusion, the UHD Alliance established guidelines for use of the term “Ultra HD Premium.” But LG introduced three levels of sets with the tags “HDR Pro,” “HDR Plus” (for high-end 4K screens with expanded color capabilities and advanced sound and picture-enhancing features)and simply “HDR” for basic sets. LG expects its entire OLED line will be among the industry’s first to be certified as “Ultra HD Premium.” LG also introduced a unique picture-on-glass design using OLED technology to build an ultra-thin screen about one-tenth of an inch thick.

Tim Alessi, LG’s director of new product development for home entertainment, acknowledges the challenge: "We definitely need to do a good job on educating the consumer on what HDR is all about.’’

"Supporting this industry-wide push for HDR are important industry elements like CTA’s own guideline for HDR compatible displays and the UHD Alliance’s new specification for Ultra HD Premium," said LG Vice President John Taylor in a CTA video interview. "In the past we talked about more pixels; this year we’re talking about better pixels, smarter pixels [and]... the addition of HDR and wider color gamuts."

ONE Media CTO Kevin Gage introduces the company’s ATSC 3.0 demo from Wynn's hotel suite

The Samsung/Sinclair demonstration also involved ONE Media, (a Sinclair/Coherent Logix joint investment focused on building a next generation broadcast platform), Pearl TV (a partnership of nine large broadcast groups) and TeamCast, a French-based technology provider. Sinclair CEO David Smith attended some of the briefings for broadcasters and analysts attending CES. (See James O’Neal’s in-depth report on the technology behind the demos

here

).

“We are only just beginning to scratch the surface of new B2B and B2C services that the next-gen broadcast platform will enable," said Kevin Gage, ONE Media’s chief technology officer and executive vice president for development, about the ATSC 3.0 demo, calling it an opportunity "to transform the broadcast landscape.”

Indeed, with countless broadcasting executives walking the Las Vegas hallways and aisles, ATSC 3.0’s rollout was part of many discussions. "We are on target to finalize the entire suite of ATSC 3.0 standards for next-gen TV broadcasting this year," said ATSC President Mark Richer.

“A lot of broadcasters seemed surprised that there were two Las Vegas stations broadcasting UHD-TV including HDR,” said Dave Arland, executive director of the Indiana Broadcasters Association and a long-time electronics marketing/publicity executive. The Samsung/Sinclair hotel demo included a custom-built gateway device—a digital pass-through box that showed how the IP signals of ATSC 3.0 can be retransmitted to devices throughout the house.

The goal of the gateway demonstration was to show that an ATSC 3.0 signal with Wi-Fi retransmission could let broadcasters deliver UHD-TV and other services simultaneously, Arland said. The all-IP technology avoids slow channel changes (an unwanted artifact of the early digital TV days) and enables quick transitions between in-channel features such as the local, sports or business segments of a newscast, he said.

During these real-time presentations to broadcasters, "light bulbs went off in their minds" as they envisioned the things they could do with it, Arland added.

BIG, THIN, LOUD & FULLY LOADED
Among other TV makers entering the HDR arena are Chinese manufacturers such as TCL. It calls its system "QUHD" to convey the "quality" of its technology, which features Dolby Vision’s quantum dots approach. Chinese set maker Hisense is labeling its lower-end 4K TV sets as having "HDR processing,’’ starting at $400 for a 43-inch version. Higher-level models will have enhanced "ultra smart peaking’’ to provide a brighter picture. Hisense also pushed its proprietary ULED (Ultra LED) technology, which it claims is "up to three times brighter than OLED with better dynamic range and perception of black and white."

Other TV makers are jumping on the HDR bandwagon, sometimes to supplement their new lines of smart TVs focused on broadband access.

CES saw the shrinking presence of stalwart TV makers such as Sharp and Panasonic and the continuing rise of Chinese brands. Panasonic is cutting back its TV and entire consumer electronics line of business to focus on enterprise systems. Hisense now owns Sharp.

”We plan on dramatically growing our business with both Hisense and Sharp brands this year,” said Mark Viken, a former Sharp executive who is now vice president of marketing for Hisense USA. “We plan aggressive moves to make our brand more visible to consumers.”

Hisense will flood the market, with dozens of new models, many featuring 720p displays.

On the audio side, Fraunhofer IIS, Technicolor and Qualcomm demonstrated a proposed audio standard developed by the MPEG-H Audio Alliance for use with ATSC 3.0. The companies said the standard is intended to let broadcasters and streaming services deliver next generation audio “at comparably low bit rates and in a cost-effective manner.” The standard is competing with Dolby’s AC-4 as the audio standard for ATSC 3.0.

LG’s rollable 18-inch/1-millimeter-thick OLED display prototype grabbed a lot of attention. LG said it expects to bring the technology to large-screen TV displays in a few years. Lenovo also showed a screen that can be rearranged; in this case an OLED screen for its Yoga ThinkPad laptop computer. The screen can be folded back into itself creating a hybrid laptop/tablet that may compete with Microsoft’s Surface devices.

Lenovo also introduced a $279 video projector accessory that can throw a 60-inch image onto a wall.

LG introduced a new line of OLED displays

LG’s OLED lineup included the new iteration of the company’s webOS 3.0 content management platform, which enables viewers of smart TVs to navigate many features. Samsung’s SmartThings platform offers similar Internet of Things control opportunities. There was considerable speculation about whether such proprietary systems will attract public interest, and indeed whether the TV set (rather than a tablet or smart phone) will be a preferred device for the range of functions.

CONTRADICTORY FORECASTS

TV makers expanded their content alliances, ramping up the trend of recent years to embed streaming video providers such as Netflix, Hulu, YouTube and an upgraded Android TV offering into smart TV sets. LG said its newest smart TV will have more than 50 new Internet streaming channels, including services from Wired, BuzzFeed and Vogue.

The issue became yet another contradictory ingredient as speakers at various CES events and conferences offered their appraisals of the video future. In a keynote describing non-broadcast video, YouTube’s Chief Business officer Robert Kyncl described a bullish outlook.

”I don’t think digital video will grow linearly,” Kyncl said. “It will grow exponentially.”

He predicted that online/wireless viewing will constitute 75 percent of total viewing by 2020.

On the other hand, financial analyst Laura Martin, managing director at Needham & Co., pointed out that one of her media clients had seven billion digital views last year but earned only $7 million for those views.

“There’s no money in digital,” she said, “Unless you have the powerful economic machine of television, you’re losing money today.”

Curiously, NBCUniversal CEO Steve Burke offered a different perspective during his keynote at the “C Space” content and marketing track of conferences.

”We need to start getting better at distributing our product on the Internet, getting better at creating new Internet businesses,” Burke said, as he explained his company’s investments in digital publishers such as BuzzFeed and Vox Media. He said that the biggest challenge facing companies like NBCU is the “increasing impact of the Internet on our businesses.”

”One of the reasons we invested in Vox and BuzzFeed was to learn from them,” Burke said.

Such differing viewpoints were underscored by countless data points throughout the CES conference about preferred viewing options. Many speakers cited data about the growing trend toward watching video—including TV content—on mobile devices. Paywizard CMO Bhavesh Vaghela described a study which found that young U.S. audiences (ages 18-34) are using almost three times as many devices to watch video compared to viewers over the age of 55.

He said that based on audiences’ varied device preferences, providers should “employ sophisticated customer retention tactics that target specific persona profiles—from marketing to billing to personalizing the user experience.”

‘SPECTRUM EXTRAVAGANZA

FCC Chairman Tom Wheeler, in his third annual on-stage sit-down conversation with CTA President Gary Shapiro, called the upcoming broadcasting incentive auction “transformational,” adding, “It’s safe to say that you’ll see a ‘spectrum extravaganza.’”

Describing the range of connected devices he saw during his tour of the CES exhibit hall, Wheeler focused on the services those products will deliver.

FCC Chairman Tom Wheeler and John Taylor in the LG booth

“It’s going to be essential to the kinds of things that are going on,” he said. “This is the marketplace deciding what it is the highest and best use for spectrum and in the process creating opportunities not just for wireless carriers but also for broadcasters.”

”There’s a huge opportunity” for broadcasters, Wheeler said, contending that broadcasters have changed their perceptions about the auction, citing channel- sharing opportunities.

Wheeler insisted that the prices and revenue aspects of the auction are secondary. “I am more interested in the spectrum transferred than in the dollars,” he said with a straight face.

Wheeler’s comments came a week before the deadline for broadcasters to sign up for auction participation. Wheeler said that he had seen considerable interest “from broadcasters, the name brand folks, the networks” and also “great interest in this reverse auction.”

He did not cite companies that had yet expressed interest by that date. He called unlicensed spectrum “the innovation band.”

“We want to make sure that there continues to be opportunity in the innovation band.”

During a discussion of the pending appeals court review of the FCC’s controversial “net neutrality” decision, Wheeler asserted that “the process will be sustained.”

Wheeler also addressed privacy issues, especially those triggered by net neutrality enforcement. Asked about smart TVs that can monitor viewers’ activities, Wheeler said it would be no problem if consumers opted in to such data collection. He cited an exhibit he saw on the show floor of a TV that captured information to be sold to advertisers, which he called a “responsible approach” if viewers approve.

IoT SPECTRUM AND NEW WI-FI VENTURES

Augmenting Wheeler’s enthusiasm for fresh uses of the airwaves, two new Wi-Fi flavors emerged during CES. The Wi-Fi Alliance introduced “HaLow” (pronounced “halo” and designated as IEEE 802.11ah), a low-power, long-range wireless system that operates in the 900 MHz band. With a range nearly twice that of standard Wi-Fi connections, HaLow will be aimed at smart home, connected car and digital health applications. It will be able to operate in “challenging environments where physical and electronic impediments such as walls and other electronics are obstacles,” according to the Wi-Fi Alliance.

Separately, Qualcomm unveiled Wi-Fi SON (Self Organizing Networks), a platform designed to enable customers to integrate and manage devices from multiple manufacturers that use various technologies. Qualcomm CEO Steve Mollenkopf characterized W-iFi SON as "unique" because it is the result of his company’s “many years of experience on the cellular side and applying it to Wi-Fi.”

Both HaLow and SON are envisioned as part of the Internet of Things juggernaut, which was a widespread theme of CES. Most IoT applications rely on wireless connectivity, raising the stakes in the spectrum deal-making ahead.

Elsewhere in CES’ airwaves—or air space—dozens of drones plied the skies. Demonstrations were intended to show that it was safe to fly unmanned aerial vehicles in crowded places. Federal inspectors were on hand to explain the restrictions on drones and actually handle registration of UAVs.

VIRTUALLY REAL
Beyond the new Virtual Reality Marketplace—a cluster of nearly two dozen developers of VR equipment—the opportunities for immersive video permeated CES. At the show, CTA issued results of a study it conducted with the National Association of TV Program Executives that hinted of the myriad content opportunities ahead.

CES 2016 attendees testing a VR headset in the Sands Expo Center (Photo courtesy CTA).

”Virtual reality is the latest platform of immersive entertainment, with massive experimentation in content development,” said Steve Koenig, CTA’s senior director of market research. “The VR ecosystem will continue to advance and expand in 2016.”

The CTA/NATPE study found that beyond gaming—which has been the first widely used VR application—horror programs are likely to be the next genre, with sports events, concerts and other live events to be produced in VR “to create a 360-degree view of the action.” On one of several VR panel discussions, Sony Pictures Chief Technology Officer Spencer Stephens called VR “a rich tool with so many possibilities.” Citing the challenge to the creative community in the multiplatform era, he said, “it’s up to the storyteller to learn to tell compelling stories. We make a movie shown on a really big screen with multichannel audio, and yet it’ll still work on my phone.”To create this new kind of video, several companies debuted consumer cameras, such as GoPro’s new 360-degree video camera for about $500. There were also numerous approaches to TV navigation and program discovery. For example, NAGRA introduced an all-in-one TV experience called“intuiTV,” an interface that provides an intuitive, immersive viewing experience. IntuiTV features gesture and voice commands to simplify navigation and search for content: viewers“swipe-to-tune,”left or right, up or down to access recent channels, viewing history, trending programs and new content. It will be offered to pay TV operators as a managed cloud-based platform that can be used to configure a full line-up of premium content and advanced TV services. OVER-THE-TOP
In addition to Netflix’s announcements that it will go global (at least 130 countries) this year and Dish Networks’ introduction of HopperGo, a flash drive about half the size of an iPhone 6, CES was loaded with products and plans for expanding the over-the-top marketplace. Dish’s HopperGo is a portable DVR that allows shows to stream to any display using its own Wi-Fi network. The $99 device can store up to 100 hours of content. Android TV, Google’s video streaming and apps platform for smart TVs and other connected devices, escalated its plans to emerge as an alternative to Roku, Apple and Amazon, announcing a wider range of access relationships this year. It is already supported on some TVs from Sony, Sharp and Philips and will expand to TVs from several other suppliers, including Arcelik, Vestel, RCA, Bang & Olufsen, and two current Roku TV partners, TCL and Hisense. Sony Electronics President and Chief Operating Officer Mike Fasulo announced “Ultra,” the company’s new video app that enables users to purchase and stream 4K movies on Sony’s Android TVs. And in the post-Aereo era, several ventures are seeking to launch similar broadcast-centric online video services. For example, Vidgo, an Atlanta start-up, “combines the best of existing online streaming services with live television and VoD,” according to Robert Kostensky, the company’s president and co-founder. It will offer “the lowest cost solution to deliver the most expansive catalog of live linear television and VoD to all devices and connected televisions,” he said.

Vidgo expects to launch in 15 U.S. markets by June, offering three levels of service. TV IS HERE TO STAY
Although CES’s early life served as a marketplace for stereo equipment and TV sets, this year’s show continued the trend of the past decade to push TV sets into the background of the consumer technology industry. Nonetheless, CTA emphasized that U.S. TV set and display sales are predicted to hit $19 billion this year, about equal to last year’s level. But with the growing electronics/technology marketplace—which CTA expects to reach $287 billion in U.S. retail sales this year—TV sets now represent a relatively small portion. CTA expects that the number of LCD TV shipments will be about 39 million units, with 13 million of those sets being 4K UHD displays, up 83 percent from last year.Gary Arlen is president of Arlen Communications LLC, a research and consulting firm. He can be reached atwww.ArlenCom.com.

LAS VEGAS—Although the sponsors’ name has changed, one of the stars of CES 2016 promises to remain the same as it has in recent years: Video and the myriad devices used to view it. And although TV set sales are slowing down, optimistic forecasts persist for 4K ultra high-definition screens.

Consumer Technology Association President Gary Shapiro and Karen Chupka, senior vice president for CES and corporate business strategy for CTA unveiled the association’s name change from “Consumer Electronics Association” last month. The show will now be referred to as “CES.”

Demonstrations of the next-gen ATSC 3.0 broadcast technology will pop up on the show floor and in private suites, while the FCC chairman will explain his rush for the broadcast spectrum auction, which may affect 3.0’s market timing.

More than 450 exhibitors list “video” among their product lines at the 2016 show yet the traditional TV giants will focus on significantly different screens at the annual consumer electronics extravaganza. LG is expected to demonstrate a two-sided “rollable” screen, Panasonic will showcase its “value-priced” 4K/smart TV sets and Chinese TV makers will expand their big-screen line-up. Yet much of CES’ screen focus will be mobile and portable devices.

WHAT’S IN A NAME?
CES, which is expected to attract nearly 180,000 attendees during its Jan. 6 to 9 run at the Las Vegas Convention Center and surrounding environs, will be a conundrum filled with contradictions. This is the first major event since the sponsoring organization swapped “technology” for “electronics” as its middle name (now the Consumer Technology Association or CTA) in November and opted to label this event “CES” rather than the “International Consumer Electronics Show” of yore.

“World over, it is CES,” said CTA President and CEO Gary Shapiro about brand recognition of the show when the association announced its name change.

Although the CES centerpiece will be the products from nearly 3,700 exhibitors, the hundreds of ancillary conference sessions and the growing presence of the content industry (about 25,000 attendees) will inevitably shift the techno-economic impact of the event. Vast exhibits and presentations about wearables, automotive electronics, health and wellness technology will overwhelm the audio-video debuts, which were once CES’ highlight.

Video will still be highly visible, albeit often focused on streaming ventures.

“TV and content are really strong,”said Karen Chupka, senior vice president for CES and corporate business strategy for CTA. “We have at least 100 exhibitors showcasing 4K UHD TV,” plus new exhibits for 4-K Blu-ray and smart TVs.

“It’s an exciting time for screens because so many people are trying to figure out how to put their content on multiple screens,” she said. As a result, “content is really the big story” at CES, according to Chupka. Reflecting the focus on non-broadcast video, CES keynoters include Netflix co-founder and CEO Reed Hastings and YouTube’s Chief Business Officer Robert Kyncl. NBC Universal CEO Stephen Burke will keynote the “C Space” program, a fast-growing conference and exhibit program at CES’s newly added third major venue in Las Vegas. C Space is the CES experience for creative communicators, brand marketers, advertising agencies, digital publishers and social networks, CTA said.

Chupka also pointed out that Turner Broadcasting will do a live National Basketball Association program from the convention floor. TV ventures will punctuate the Las Vegas landscape, ranging from a Scripps Networks hospitality tent in front of the main convention center to an audition for “Shark Tank,” the Emmy Award-winning ABC hit show.

Among the broadcasters attending CES will be members of the Pearl TV consortium, according to Ann Schelle, managing director of the alliance of major broadcast groups that is exploring next-generation digital media platforms.

“Pearl TV members will be coming to Las Vegas to see the latest consumer technology innovations,” Schelle said, “not only in television but also in a variety of mobile devices and automobiles that will populate the show floor. We anticipate seeing ATSC 3.0 demonstrations, as well, to begin to educate CES attendees about the forthcoming move to advanced television and the advantages of better video, more choices, integration with the Internet, advanced emergency alerting, and other benefits.”

ATSC 3.0 will be on display in Samsung’s and other booths as well as in private demonstrations, according to several sources. (See “Sinclair Demos HDR 4KTV Over ATSC 3.0 in Vegas.”) The CES show floor will be dotted with other breakthrough devices, such as the rollable LG screen that uses organic light emitting diode, or OLED technology, to enable flexible, thin, light and double-sided screens. Since the expected demo is still a prototype, details of LG’s plan for a working television are not yet available.

POLICY AND INNOVATION
As CTA increasingly focuses on public policy issues that impact innovative technologies and security and privacy, CES is packing its agenda with industrial and regulatory giants. In addition to keynotes from the top executives of Intel, Samsung and General Motors, the agenda includes all of the commissioners from the Federal Communications Commission and the Federal Trade Commission, who will take the stage on opening day. FCC Chairman Tom Wheeler and FTC Chairwoman Edith Ramirez will each sit down with CTA’s Shapiro for a 30-minute “SuperSession” discussion. Later that day, all four other commissioners from each agency will participate in a two-part “Commissioner Roundtable” as part of the CES Innovation Policy conference track.

FCC Commissioners Mignon Clyburn, Jessica Rosenworcel, Ajit Pai, and Michael O’Rielly will begin by discussing allocating more licensed and unlicensed spectrum for mobile broadband, improving the accessibility of consumer technologies, increasing broadband adoption and speeds, fostering competition and innovative service offerings for consumers and other topics related to technological convergence and communications.

For the second part of the roundtable, FTC Commissioners Julie Brill, Maureen Ohlhausen, and Terrell McSweeny will address emerging policy issues surrounding the Internet of Things, balancing data privacy with consumer adoption of new services and potential upcoming regulatory reform. “This is a great opportunity for CES attendees to hear how the FCC and FTC’s top regulators view their agency’s role in enhancing competition, stimulating entrepreneurship and supporting the kind of disruptive innovation on display at CES,” Shapiro said.

Opening day will also include “Industry Innovators and Government Join Forces,” during which U.S. Chief Technology Officer Megan Smith and Deputy Director for Technology and Innovation Tom Kalil will lead a discussion with global industry trendsetters to examine entrepreneurship, “smart cities” and other issues.

TV’S ROLES
At a “CES Unveiled” preview in New York last month, which included holiday sales forecasts, CTA Chief Economist/Senior Research Director Shawn DuBravac explained that TV sets are slipping in the sales ranking of the Big 5 categories.

Consumers have “less interest in TVs,” DuBravac said, compared to smartphones and tablets, where total spending levels will be higher this season. He said that only 17 percent of consumers plan to buy a new TV set this year, compared to 24 percent during the 2014 holiday shopping season. CTA’s data show that 84 percent of U.S. households now have at least one LCD TV.

Among potential TV set buyers, Internet connectivity is a primary factor. Du-Bravac’s data showed that 78 percent of shoppers want a smart TV, up from 63 percent a year ago.

Despite the overall lackluster forecast for TV set sales, appetite for UHD sets continues to grow, with 59 percent of TV set shoppers in a new CTA survey saying they expect to buy a UHDTV for the holidays.

Despite the lackluster forecast, appetite for UHD sets continues to grow, with 59 percent of TV set shoppers in a new CTA survey saying they expect to buy a UHDTV for the holidays. This year’s expected sales of 4.5 million 4K TV sets is nearly triple the 2014 level, and DuBravac estimated that 8.9 million sets will be shipped in the U.S. in 2016 and just over 13 million in 2017. More significantly, shoppers have mixed views on how big their 4K sets should be. Nearly 80 percent want screens smaller than 60 diagonal inches (reflecting the price and available space), while 35 percent want screens larger than 60 inches, according to CTA’s study. (Since that sum is well over 100 percent, clearly some viewers want screens of all sizes.)

Adding to the UHD buzz will be announcements, such as one expected from DirecTV (now part of AT&T) that it will add more 4K programming to its line-up. The satellite TV provider has been testing UHD sportscasts for more than a year and recently said it has the capacity to carry 50 UHD channels at 30 Mbps in addition to its current HDTV and standard definition channels.

The UHD frenzy at CES comes amidst significant upbeat signals. For example, late last month, Samsung Electronics revealed that it sold more than $1 billion worth of TV sets in North America during October—a new monthly record. Samsung said that 4K UHDTV sets represented 51.2 percent of its third quarter 2015 U.S. sales.

TV manufacturers are also starting to specialize. For example, LG’s line-up includes two HDTV sets with built-in Roku capability, of which a “limited-time” version was made exclusively for sale at Best Buy stores during the holiday shopping season. Roku has introduced 4K-capable streaming players and has TV alliances with several other brands. LG has indicated that the Roku deal is solely for “entry-level” models and that it plans to use its own webOS platform for its core smart TV sets.

C SPACE, DIGITAL HOLLYWOOD AND RELATED TECH CONFERENCES
High dynamic range video, virtual reality and countless other TV technology issues are on the week’s agenda, which is jammed with more than 40 conference tracks plus seminars run by CTA and dozens of affiliated and independent groups. Mature sectors such as video and audio are not as prominent as they once were. Even the Institute of Electrical and Electronics Engineers at its annual International Conference on Consumer Electronics is devoting its entire agenda to consumer healthcare, fitness and personal diagnostics.

The Advanced Imaging Society will run three-session conference about high dynamic range, high frame rate, 4K and virtual reality on Thursday. The sessions are intended to identify “which technologies are in the driver’s seat,” according to event organizers. Presentations from 20th Century Fox, Netflix, Dreamworks and Dolby will examine technical standards as well as Hollywood’s HDR and VR playbook plus 2016 industry forecasts.

C Space, now in its third year, will focus on advertising, marketing and digital media. The agenda explores the relationship between brands, agencies, media and technology partners, with an emphasis on the shifting relationship of technology with innovation.

At the Variety Entertainment Summit, seven sessions will delve into OTT Entertainment, Content Monetization and Digital Audience Engagement. Speakers include executives from Disney/ABC Television Group, Fox Networks Group, Discovery Communications, Hulu and Sony Pictures Entertainment. A keynote conversation within the conference will feature TV host and producer Ryan Seacrest and iHeartRadio Chairman and CEO Bob Pittman.

The venerable Digital Hollywood features more than a dozen sessions this year, spread over three days. “The Future of TV: From Primetime to Multi-Platforms” will hear from NBCUniversal, Starz, Deloitte and other media/business executives. Other sessions will explore “Original Video Programming: Internet TV Goes Mainstream,” “Content and Monetization” and “The Disruption of Internet TV: Programming Everywhere.”

David Leibowitz, CH Potomac

David Leibowitz, managing partner of media and technology firm CH Potomac, will moderate the Internet TV session; he’s focused on the growing challenge of navigating programs across platforms.

“The growing array of over-the-top, ‘TV Everywhere,’ and ‘skinny bundle’ cable packages has made it more difficult for users to find what they want to watch across these offerings,” Leibowitz said. “While universal search is the ‘holy grail’ in solving this problem, competitive interests among the largest providers have complicated making universal search a reality.”

For the “Broadband at CES” conference on Tuesday, just before the show opens, organizer Team Lightbulb has included a session about “5G: Incremental Change or the Next Revolution.”

Despite the “stricter credentialing” (as Chupka calls the show’s attendee ceiling), CES’s attendance will probably be comparable to the 176,676 people who attended the 2015 show. About 30 percent of the attendees—nearly 48,000 people—will come from outside the U.S., Chupka said.

The show has already set a record as the largest show of its kind ever, occupying 2.3 million square feet of floor space in all venues. The start-up section at the Sands called “Eureka Park”—mostly small booths for new and early-stage companies—will have more than 500 exhibitors, about 25 percent more innovators than last time.

“Everyone is going to be blown away by the technology and by the opportunity for people to be looking at more things on more devices,” Chupka said.

To register for the 2016 CES, visit www.cesweb.org.

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December 21, 2015
“CES 2016 Implements New Security Measures”
Bag checks, body screening and increased security personnel added for conference.