Broadcasters likely to pursue mobile TV, out-of-home advertising to supplement revenue

“HD Technology Update” continues with its periodic conversations with broadcasters and vendors about what hot technology trends to expect at the NAB Show in April.

This week, Brian Cabeceiras, Harris VP of strategic marketing and technology, offers his perspective on HD trends as well as other hot technology developments that are likely to be present at the convention.

As relates to HDTV, Cabeceiras anticipates the mainstreaming of high definition to continue and even touch a cutting-edge development from last year’s show — namely, 3Gb/s infrastructure. Interestingly, Cabeceiras’ comments related to HD led to a few unexpected topics.

HD Technology Update: What hot technology trends do you expect for HDTV at the NAB Show this year?

Brian Cabeceiras: One of the bigger trends that we have seen over the last year and will be a big play across NAB this year is getting ready, not just for HD, but future-proofing the investment with 3Gb/s, 1080p-capable systems.

The price deltas right now between doing a 1.5Gb/s plant or 3Gb/s plant are really becoming incrementally nominal. So, if you are buying a router today that is going to be in service for eight to 10 years, I think most people would prefer to future-proof that investment.

HD Technology Update: With most of the largest broadcasters well into their HD rollouts, do you expect to see HD becoming an increasingly important priority at midsize and smaller stations?

Brian Cabeceiras: Absolutely, the surge of HD sets and the DTV transition are driving this even more. I think consumers are more and more expecting to see HD, and I believe stations in midsize and smaller markets will respond.

HD Technology Update: Even in light of the economic slowdown?

Brian Cabeceiras: Obviously, all reports are pointing to a runoff of advertising revenue. I saw a recent report from a financial reporting firm, and it was on the order of an 18 percent decline from a peak two years ago for U.S. network and TV station ad revenues.

However, they’re rapidly replacing that runoff with revenue from all of the new services that are being provided online. Part of it is cable retransmission fees, but operationally it is getting content online; it’s digital signage; it’s multicast; it’s putting up more channels to get more revenue; and in the planning, it’s mobile video. The projection is that over the next several years, those will more than replace the ad revenue that’s been lost.

So, I think the market is looking to follow the money and follow the ad dollars to these new services. The issue that it creates is that these new services, because they are not generating the same levels of revenue, they need to be done in a much more automated fashion. Netting that all out, what’s the big trend you’ll see at NAB? I think on the software side, the ad sales, campaign management, traffic scheduling, it’s a lot of solutions to handle these much more advanced campaigns across multiple channels and multiple services.

As far as hardware is concerned, the big buzzword will center on workflows — how to use interoperability and industry standards like BXF and other standards to smooth out and automate that factory underneath, so that when traffic and scheduling send down all of these commands for these channels, we don’t need to have hundreds of people downstairs running up the operational expense to create all of these channels.

HD Technology Update: You brought up mobile TV. What do you anticipate in this area, especially now that there has been a commitment to roll out service at several stations this year?

Brian Cabeceiras: This will be a big year for mobile. At CES, the OMVC announced it had standardized and is ratifying through ATSC the technology standard. There is a little bit of the chicken and the egg. For the consumer electronics device manufacturers to incur the cost to put the mobile-handheld technology into their phones, laptops, cars, they need to know the programming and the demand will be there. The broadcasters are pretty much committed, at least from what we heard at CES. Some 63 TV stations have announced their plans to roll out mobile video as soon as the standard is ratified.

I think between NAB and September, our take is we will see four to six dozen U.S. TV stations put up their mobile services, so the consumer electronics companies will have the confidence to really accelerate rolling out these products in the September pre-Christmas shopping period.

That will be a huge area of interest for the broadcasters; specifically, broadcasters will want information about the signal through the broadcast food chain. How do they do the encoding, feed it into a multiplexer through an exciter to a transmitter and deliver it? What about single-frequency networks and all of the components required there? How do they manage that internally? How do they create a low-cost channel server, graphics, animation and branding so they can get these new channels up for the least amount of CAPEX possible? At NAB, we are committed to having deliverable products. We are coming from an alpha-beta phase to a finished product, deliverable product for the encoder, exciter, multiplexer and transmitter at NAB.

HD Technology Update: Are there any other trends that you expect to see?

Brian Cabeceiras: Another big trend likely will be the whole out-of-home advertising, digital signage types of applications. We are seeing more and more of our broadcast media customers exploring how they can participate in that. Some of them are even using the mobile video standard to deliver video to untethered or unwired devices — a bus, a billboard, something that’s not easily plugged into an Internet jack on a wall plate. It’s running hand in glove with the mobile rollout.

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