NAB Show 2008 Preview: NAB Asks: Are You Ready?

There sits a clock on the NAB’s DTV helpline Web site, and a digital one at that, methodically ticking away the minutes toward that long-established, long-anticipated deadline.
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(click thumbnail)LAS VEGAS
There sits a clock on the NAB’s DTV helpline Web site, and a digital one at that, methodically ticking away the minutes toward that long-established, long-anticipated deadline.

February 17, 2009. More than 22 years in the making, filled with hundreds of thousands of hours of discussions, deliberations, infighting, concessions, agreements.

February 17, 2009. And what then? A little bit of panicking, maybe. A bit of excitement, perhaps. Or maybe simply a smooth transition from one to the other, an affirmation that all the work and the effort have paid off in the form of a DTV technology that will do for millions of television viewers exactly what the industry said it would.

With no way to know for sure, broadcasters by the thousands will flock to the 2008 NAB Show and place their bets the best way they know how: by securing last-minute answers to lingering questions, all in the hopes of finally pulling off the most significant transition in TV technology in more than 55 years.

AND YOUR ANSWER IS…

So let’s go ahead and ask the big question: Are you ready?

“This is the last show broadcasters will attend before the analog shut off,” said Lynn Claudy, senior vice president of science and technology for NAB. “[Instead of panicking about the shut off of analog,] this show is really about leading them to consider what are they going to do in digital.


(click thumbnail)“The basic guidelines are in place, the roadmap is there, the timeline is there,” he said. Or in other words: “The ambiguity is gone.”

OFF TO A ROUGH START?

And yet, with 11 months until analog has its demise—and despite the intense scrutiny the DTV transition has garnered in the trade press and within broadcast boardrooms—the average consumer remains woefully uneducated. It’s ironic and a little unnerving to those sitting in the trenches, but facts are facts: 36 percent of respondents in a recent Consumers Report survey said they were completely unaware of any upcoming DTV transition.

Among those who are aware of the transition, an even larger percentage are misinformed, believing that any set they own—whether it receives over-the-air programming or not—will need some type of converter device to function in a DTV world.

Other consumers, the survey said, are simply ignoring the transition altogether.

Facing more than just consumer malaise, broadcasters are also juggling new FCC guidelines designed to spur broadcasters into completing their DTV buildout, complete with stricter construction deadlines and tougher waiver requirements for those who are falling behind.

Add one more item to this year’s to-do list. With more than 14 million households relying exclusively on over-the-air broadcasts for their programming, how will local stations handle the inevitable complaints that pour in when consumers find their TV sets no longer pick up programming?


(click thumbnail)Though it hardly needs to be said, the stakes are high. In the end, the auction of the vacant analog band is expected to net the government about $10 billion. And Congress is none too happy about the current progress of the DTV transition. At a hearing in February, Rep. John D. Dingell, (D-Mich.), chairman of the House Committee on Energy and Commerce, questioned the nation’s preparedness to switch off its analog signals. “Right now, I am not confident that government agencies, retailers, broadcasters and all other stakeholders are taking all the steps necessary to ensure consumers are adequately informed and ready for this transition,” he said.

While he applauded the steps of some retailers in pushing digital sets, he expressed concern over the converter box coupon program and the impact on low-power broadcasters, who are not required to transition to digital by February 2009. “As Feb. 17, 2009, nears, we learn of new steps that must be taken, and time is running short.”

For its part, the NAB and broadcasters are waging a $700 million awareness campaign to keep viewers informed, airing crawls and news tickers during programming, financing a roving DTV Road Show, broadcasting half-hour educational programs and implementing a 100-day countdown to Feb. 17, 2009.

AN EYE ON MOBILE

Yet holes still exist on the DTV highway ahead. One hot-button issue is the lack of a solidified mobile TV standard, one that would allow local broadcasters to send TV signals to handheld devices like cell phones—and the 100 million portable TV sets that are on the market—using the digital spectrum.

Attendees may be buoyed by the progress that’s expected when the NAB Show rolls around. After the Advanced Television Systems Committee launched a standards-formation process just prior to NAB2007, the Open Mobile Video Consortium was formed to help develop and test the ATSC-M/H standard. The consortium is now considering two possible standards: the MPH Mobile Pedestrian Handheld platform developed by LG Electronics and Harris, and the A-VSB platform crafted by Samsung and Rohde & Schwartz.


(click thumbnail)WGHP-TV/DT tower in High Point, N.C. Courtesy Scott FybushConsumer trials of these new mobile digital television technologies began in February in San Francisco and Las Vegas. SES Americom, who put mobile technology to the test during NAB2007 in Las Vegas, provided the mobile broadcast network platform.

“This isn’t a technology that’s being developed for the sake of a technology, it’s being developed to meet a very real need,” said Mark Aitken, Sinclair Broadcasting’s director of advanced technology and chair of the ATSC working group spearheading the mobile TV venture.

With the goal of launching mobile digital television services by February 2009, the coalition has its work cut out for it.

“We’re looking at 2009 as an opportunity,” said the NAB’s Claudy. “It’s not just a cut-off date, but the beginning of something new. February 2009 is a dawn as well as a sunset.”

A recent study commissioned by the NAB echoes that sentiment, stating that mobile DTV could pull in $2 billion in annual revenue for broadcasters by 2012 if a standard is adopted quickly and equipment is swiftly put into consumer’s hands. That lofty monetary figure has a shelf life, however: New mobile DTV services will onlyl succeed if one universally standard is adopted by 2009, according to the report. “Delaying adoption of the standard will dramatically impact the revenue potential for both local and network broadcasters in a negative way,” the report said.

Each month of delay could cost broadcasters approximately $50 million in advertising-supported revenues, the report said.

“We… believe that a delay beyond February 2009 in launching services can cause irreparable harm to the mobile broadcast business,” said Brandon Burgess, OMVC chairman and CEO of Ion Media Networks and an early supporter of a mobile DTV alliance.

But why now? Why has it taken the industry so long to band together over this issue?

“There were bigger fish to fry,” among them must-carry and DTV standards issues, said Richard Doherty, president of research firm Envisioneering. “At the last NAB and at CES, people finally began looking at the different mobile components.”

But there’s little time to lose, most believe.

“By the time NAB ’08 is underway, many segments of this industry need to converge [on mobile TV],” Aitken said. “On that note, one of the issues facing broadcasters will be one of providing multiple new services, but the clear driver for viewers remains to be local origination of network television. This is the space that will drive success for broadcasters. Content drives viewers. Local is where the viewers are.”

PROBLEMS TO SOLVE

There are other pressing issues to resolve, as well.

Rural viewers who receive their over-the-air programming from low-power television (LPTV) stations are in for a nasty surprise if some technical issues aren’t resolved.

While all high-power television stations are required to switch to digital by next February, there are more than 7,000 Class A, LPTV and translator stations that won’t be required to meet that deadline. And if their viewers aren’t equipped with the right kind of converter box, they may be watching a screen full of snow.

Many converter boxes on the market aren’t able to downconvert low-power analog signals, potentially leaving viewers with nonfunctioning channels.

In response, in February the NAB formed a Low Power TV Issues Committee to address these issues, and began urging converter box manufacturers to incorporate an analog pass-through feature into their boxes.

SETS ON THE MOVE

There is promising news on other fronts: “The digital television [sales] category continues to be full of good news and promise for the industry,” according to the U.S. Consumer Electronics Sales and Forecasts report, released in January by the Consumer Electronics Association.

HDTV sets are now in more than 39 percent of U.S. homes, with set prices expected to drop to an average sale price of $899 during the first quarter of 2008, according to CEA. The research firm DisplaySearch reported strong consumer demand for 1080p LCD TV sets in 2007, and expects that trend to continue into 2008.

Super Bowl XLII was undoubtedly the first barometer: CEA estimated that more than 2.4 million HDTV sets would be sold in anticipation of the 2008 game in January, generating nearly $2.2 billion in HDTV sales.

“Perhaps best of all is the story of [stabilized] pricing and its effect on the bottom line,” the CEA report found. This stability is expected to lead to 11 percent growth, translating to shipment revenues of $25.9 billion.

“It’s incredible what’s been happening with HDTV sets,” said NAB’s Claudy, pointing to the rapid drop in price and increase in features. With current models ranging from several thousands of dollars down to several hundred, “We’re very pleased with what’s out there.”

More consumers are now being exposed to digital TV options, as big-box retailers like Wal-Mart and Best Buy began pulling analog sets from their shelves earlier this year.

Though it’s been a slow brew—as existing HD set owners have been quick to note—more local stations are also beginning to produce local content in HD.

According to NAB, 64 stations are creating and transmitting local programming in HD, an increase of about 50 percent since NAB2007.

READY FOR THE FUTURE?

As the last show before the DTV transition deadline, this year’s convention is vital in a way that it never could have been before. And one hopes that broadcasters are prepared for what lies ahead just 11 short months from now.

“I think [this new opportunity] is leading broadcasters toward a more sophisticated view of their spectrum allocation,” said Claudy. “The best ways of managing, distributing and transmitting are the next step for broadcasters.”