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Study: Datacast/Multicast May Provide Myriad Opportunities

A U.S. TV broadcaster can generate anywhere from $7.3-$206 million in cash flow in Year 10 from operating a multicast cluster of digital channels, according to Kagan Research, using various scenarios to produce some widely diverse projections based on many factors. The multicast cluster carries the potential to generate revenue ranging from $225-$424 million by the tenth year, according to Kagan.
The study represents the worst and best cases of 10 business models that are dependent on variables such as program costs, advertising sales and carriage (using multicast channels achieving somewhere between 45-100 percent penetration of satellite TV homes in their respective markets). The study also concludes that a lot of money can potentially be made (again, dependent on several variables) by local DTV broadcasters who chose to lease their spectrum for third-party services (such as the ongoing USDTV venture).
However, the Kagan study doesn't provide possible suggestions or solutions for local broadcasters for what and how to program various multicast channels and/or datacast services, and it seems to state the painfully obvious when it observes that many broadcasters have held back the launch of HD programming because a lot of cable and DBS operators don't want to carry a station's multicast channels, to begin with.
Kagan's new study, entitled "HDTV Spectrum Monetization 2005," finds that HD penetration will reach 50 percent of U.S. households by 2010.