What an "iffy" world we live in!
If NAB2002 goes reasonably well, manufacturers will go home smiling. The smiles will last a long time if orders start rolling in. The smiles will last even longer if sales jump in the acquisition and production equipment sectors. More money will be available in the second half of the year if the number of stations turning on DTV transmitters this spring takes the DTV total number on-air to over 500. And that will be especially meaningful if DTV-ready set sales accelerate. Even more so with the sale of DTV set-top boxes.
DigitalTV magazine doesn't have concise answers as to the broadcast equation because there are too many unknowns. But our constant canvassing of the industry and the relevant associations has helped us to at least get a feel for where we are headed.
Bad News, Good News
However NAB shakes out, this much we know: All RF-related products will continue to sell at a record-setting rate. Chief among this class of equipment will be the newly introduced low- and medium-power transmitter packages. The key to their success will be scalability, cost, and delivery. This will be music to the ears of RF manufacturers (though at first blush it will draw more moans and groans from the acquisition and production crowd).
But wait! Is this really bad news? I don't think so. If the transmitter manufacturers hadn't come up with an economical way to get stations not in the top 75 markets to turn on a DTV transmitter, DTV set sales would soften this summer. More to the point, since the transmitter designers are giving those stations an economical way to get that DTV signal on the air, station budgets will be in much better shape faster than most were predicting. That being so, after the initial burst of RF package salesÑsay from April through AugustÑthere will be better looking capital expenditure budgets because money will have been freed up. Across the country, as each station makes the transition to DTV, a new, revised budget will be underway.
How Much Money?
If a station goes the full-power transmitter acquisition route, it could easily spend $750,000 on the transmitter alone. Once you light that transmitter up on a DTV channel and no new ad revenue is quickly generated by it, the power service bill alone will be high enough to force the decision to run the transmitter sparingly. Tie that transmitter to an expensive filter, transmission line, heat exchanger, and maybe a new or reinforced tower and a new antenna, and suddenly you can see why stations beyond the 75th market are wringing the sweat out of their socks. The total cost could be in excess of $1.5 million.
However, for stations that opt to start out with modest power by selecting basic transmitter designs that can be upgraded gradually to full power later, their initial investment could be as low as $150,000.
The thinking is that, as Grade A service DTV set sales climb, stations can afford to have their transmitter (and perhaps other items like antennas and transmission lines) gradually upgraded. Once this scenario sets in, the acquisition, processing, and production equipment manufacturers will find that the smaller markets may for a while have the budgets to start upgrading their studios and sets.
A Done Deal?
Not exactly. Remember, this is an iffy world. If the FCC puts teeth into its mandates, it will have at least come to the conclusion that the chicken did come before the egg. If the economy continues to show improvement, that will be reflected in increased ad revenues and respectable budgets. If TV set sales really do fall in line with across-the-nation DTV saturation, more programming and other forms of revenue dollars will show up.
That's a lot of "ifs."
Of course, some medium market stations will still opt for going full power to protect their position later down the transition road. But we're predicting the package business will have a major effect on how soon the broadcast industry recovers.
This much is certain: The glass really is half full, and the light at the end of the tunnel definitely hasn't been turned off for lack of interest.
What an "iffy" world we live in!