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Technology Future of TV Accenture

ATSC 3.0 promises to level the playing field between broadcasters and OTT services


By Adam Flomenbaum | Co-Executive Editor

November 15, 2016 | 8 min read

The main reason why people love Netflix and Hulu is because both services have phenomenal programming. Another reason is that both services make TV fun, from appealing user interfaces to tailored content recommendations. If broadcasters can compete on the first front, they have been at a severe disadvantage on the second (and just-as-important) front.



ATSC 3.0 promises to change that. The Advanced Television Systems Committee is finalizing a new standard that will enable broadcasters to deliver IP-based video, addressable advertising and interactive elements; viewers – even those accessing via over the air – will get an improved experience that includes 4K UHD (and HDR) broadcasts.

The shift requires the cooperation of many different parties, including TV manufacturers. Manufacturers will begin to incorporate ATSC 3.0 in 2017 sets, and consumers will either need one of these TVs or another device to access its features.

Mike Chapman, Managing Director and global lead of Media & Entertainment and Video Strategy consulting, Accenture Strategy, touched on ATSC 3.0 and other topics during the TV2020 keynote at NAB last week. We spoke with Chapman following the event:

Found Remote: What is ATSC 3.0 and how will broadcasters benefit from ATSC 3.0?

Mike Chapman: ATSC 3.0 is the next generation broadcast television standard being developed by the Advanced Television Systems Committee (ATSC). This standard is designed to help broadcasters plan for the future by enabling them to launch TV features and capabilities comparable to what consumers can receive through Pay TV and OTT video providers. Once the standard is finalized, features and services could include 4K UHD broadcasts with high dynamic range (HDR), IP-based video for delivery either over-the-air or via the Internet, mobile device compatibility, video-on-demand, enhanced user interfaces with interactive overlays, advanced advertising and datacasting.

The ATSC 3.0 standard repositions broadcasters to be more competitive with other video providers that have taken advantage of new digital technologies to redefine the viewing experience for consumers. Broadcasters are playing catch up to what many video providers in the marketplace are now offering. The new standard offers them a framework upon which to build new TV experiences. In some cases this will create parity between broadcasters and other providers’ experiences and close the distance in feature and functionality gaps.

FR: When will ATSC 3.0 be the standard?

Chapman: ATSC 3.0 is comprised of multiple standards that cover various components of next-generation broadcast technology. These standards are being approved via committee, with several of the key standards having already received final approval and others in candidate status. Once the body of standards is finalized, broadcasters can start the process of deploying new technologies that leverage these standards to maintain compatibility across the broadcasters’ infrastructure and consumers’ televisions and devices. This ensures that once a consumer purchases a device compatible with ATSC 3.0, the device can take advantage of all of the new features and functionality available at the time.

One thing to note is that adoption and rollout of ATSC 3.0 in the U.S. is voluntary. This is different than the past government mandate on the television airwaves that required all broadcasters to migrate to the new standard by a certain date; the government actually helped subsidize consumers’ transition in order to prevent viewers from losing access to broadcasters’ signals. As such, broad adoption of ATSC 3.0 could take five-plus years and consumers in certain U.S. cities could have access to next-generation TV experiences faster than others. Both ATSC and the National Association of Broadcasters (NAB) continue to push industry participants to ratify and adopt the technology standards, and are working with regulators to create an expedient and smooth path to transition.

FR: 20 per cent of Americans (including me!) still access free over-the-air TV via an antenna. How will ATSC 3.0 impact those viewers?

Chapman: ATSC 3.0 will not change your ability as a consumer to access free, over-the-air broadcast. In fact, your viewing experience will be markedly improved once you have access to the enhanced video quality and features. There may be some optional fee-based services that broadcasters launch in attempts to offer more choice and monetize their investments. But free TV will remain available. Broadcasters are committed to the public service they provide to the local communities through the airwaves. ATSC 3.0 does not change that.

ATSC 3.0 does have some impacts on viewers in that current televisions and devices are not compatible with the new standard. Consumer electronics manufacturers are looking to build televisions and devices with the new tuners embedded that will hit the market starting 2017. So you will have to purchase new TVs or companion devices if you want to take advantage of the TV viewing enhancements. The broadcast industry is working together to consider the impacts of ATSC 3.0 deployments on viewers and I imagine optimizing the number of viewers during the transition will be an important criteria.

FR: The potential of addressable TV advertising has been thrust into the spotlight with the recent AT&T-Time Warner news. Is widespread adoption (from networks and advertisers) of addressable still far off? How will ATSC 3.0 impact how networks monetize?

Chapman: Addressable TV advertising is being executed in a limited fashion today and primarily by TV networks in tandem with Pay TV providers who use set top boxes and data to target and serve those ads. The technology and data limitations to deliver addressable TV ads are declining rapidly, and ATSC 3.0 could further accelerate this in broadcast households. A mass-scale solution to deliver targeted ads to OTA viewers does not exist, although there are some start-ups and broadcasters focused on this. Addressable TV advertising is likely to increase in prominence and frequency over the next 1-3 years and become more widely adopted in 3-5 years as the ad tech and TV industry integration matures.

One of the premises involving the recently announced AT&T / Time Warner merger is increased synergies for addressable TV advertising. Other video providers have also been looking at opportunities in this space too. There is a hypothesis that networks can charge advertisers a premium for ad impressions targeted to specific viewers, and we’ve seen that hold true for select advertising inventory. But there are open questions on live linear TV advertising addressability and how much TV networks truly benefit from the laser-targeting of viewers. Specifically, networks and broadcasters need to determine what the potential impacts to price and volume are as you parse up and price your ad inventory more granularly for targeted ads, versus the mass advertising approach that takes place today on TV.

My consulting practice at Accenture Strategy has looked at these issues and is working with clients to further determine the value and implications both for advertisers and networks. For example, one of our recent advertising strategy whitepapers quantified the halo effects from TV advertising on digital advertising and how to properly attribute ROI against cross-platform advertising. So addressable TV advertising needs to be investigated through a similar lens to prevent decisions that destroy value because the holistic impacts are not fully understood.

FR: You're delivering the TV2020 keynote address at NAB this year. So - what are some of the ways TV will have changed by 2020?

Chapman: We anticipate continued disruption and change in TV, as well as the overall video ecosystem over the next 3-5 years. Accenture Strategy sees several key shifts in the TV marketplace by 2020:

- The growth of OTT live linear offerings, which could become a distribution opportunity or threat for broadcasters.

- The rise of ubiquitous, ecosystem-centric ‘entertainment’ platforms. Accenture sees the platform – not the device -- becoming the differentiator.

- The launch of data-powered, immersive TV experiences and viewer control, driven by experience innovations from leading SVOD providers and MVPDs.

- The evolution of unbounded TV viewing and advertising markets, as digital further disrupts traditional TV viewer and advertising footprints.

- An expansion of TV monetization options, as video monetization moves beyond the traditional dual revenue model.

Technology Future of TV Accenture

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