DTV Broadcaster's Strategy, ROI, and Market Analysis
HDTV, SDTV, Multi-channel, & Data-casting
- 1998-2006
Table of Contents
Section 1 FCC and Legal Regulation
1.1 Background
1.1.1 FCC Policy: Outstanding Issues
Table 1: FCC - Outstanding Issues
Table 2: Resolution Dates
Analyst Assessment: Table 3 Resolution
Other Legislative/Regulatory Issues
Table 3: Must-Carry Questions Confronting Cable Operators
Table 4: FCC Must-Carry Options
1.2 DTV Buildout Timeline (FCC Driven)
FCC Stage 1
FCC Stage 2
FCC Stage 3
FCC Stage 4
Illustration: FCC Conversion Timeline
1.3 Channel Allocation and Other Updates
1.4.1 DTV Channel Allocation Update
FCC Adopts Final DTV Allotment Table
1.4.2 Launching Timeline - 5 Years
Table FCC Reallocation Decisions (sample)
1.4 Future Directions: Must-Carry
Regulation: Cable Broadcasters—Sample Trial Baloons
Regulation: Satellite Broadcasters
Regulation: Low-Power TV (LPTV) and Translator Stations
Regulation: Non-Commercial Broadcasters
1.5 Audience Protection Issues
Ratings
V-Chips
Section 2 Directions in Technology
2.1 Bottlenecks in Technology
Table 2.1: Current Technical Bottlenecks and Solutions
Media Exchange Standards
General Lack of DTV Equipment
Lack of Local Branding and Insertion Equipment
Table 2.2: SMPTE PT20/Packetized Television Technology Status
Lack of Low-Cost Encoders
Redesigning/Engineering Tower or Transmitter
Installation of Equipment
Pricing/Availability of Infrastructure Equipment
New Aspect Ratio
2.2 Non-Technical Bottlenecks
Table 2.3: Non-Technical Bottlenecks & Barriers
2.3 Specific Areas for Development in the Future
Table 2.4: Future Technical Opportunities
Media Exchange Issues
Better Routing
Encoder Related Issues
Signal Propagation & Enhancement
Transition to HD Production/Better AC-3 Production Tools
Section 3 Directions in Management
Table 3.1: Station Management Areas Most Impacted By DTV Conversion
3.1 Management Areas Most Impacted By DTV Conversion
3.1.1 Upgrading Program Handling Systems
Table 3.2: Importance of Program Handling Systems
Background Concerns For Program Handling Systems
Table 3.3: Program Handling - Reasons for High Ranking
3.1.2 Finding New Revenue Sources
Table 3.4: Importance of Finding New Revenue Sources
Table 3.5: Reasons Finding New Revenue Sources is Important
3.1.3 Changed Production Operations
Table 3.5: Imact Size: Changed Production Operations
Table 3.6: Why Changed Production Operations
3.1.4 Changed Advertising Operations
Table 3.7: Imact Size: Changed Advertising Operations
Table 3.8: Why Changed Advertising Operations
3.1.5 Cooperative Agreements with CE Retailers
Table 3.9: Imact Size: Cooperative Agreements
3.1.6 Changes in Financing and Budgeting of Programs
Table 3.10: Imact on Financing of Programs
3.1.7 Adding Fee-Based Services/Pay Per View
Table 3.11: Importance of Fee-Based Services
Table 3.12: Why Fee-Based Service is Struggling
Table 3.13: Settops/SmartCards - Attractive Features
3.1.8 New Contract Negotiations: Outside Program Producers
Table 3.14: Importance of New Program-Development Alliances
3.2 Other Management Concerns
3.2.1 Areas of Profit Opportunities
3.2.2 Types of Expected Service From Equipment Vendors
Section 4 Directions in Services
4.0.1 Major Networks' Format Preferences - Announcements
DTV Plans at Launch
4.1 Network Recap: HDTV/SDTV Formats
ABC
CBS
NBC
Fox
PBS
Different Starting Points: Commercial Networks
Daytime Broadcasting
Prime Time Broadcasting: HBO, DirecTV, Networks
4.2 Programming Overview: 1999-Top 150 Stations
Table 4.1: Programming Hours Per Day By Digital Service
HDTV Ubiquitous
SDTV Ubiquitous
Multi-Channel Not Ubiquitous
Data-Casting is Like Multi-Channel: Not Ubiquitous
Table 4.2: Strategic Value of Digital SVCS—By Network Affiliates
Fox Affiliates Differ on HD
Multi-Channel Favored By PBS and Fox
Why Data-Casting Favored By most
Table 4.3: Programming Hours (by network affiliate)
Format Strategy Perceived By Netowrk: Methodology
ABC Stations aggregate Program Mix: Q4/1999
CBS Stations Aggregate Program Mix: Q4/1999
Fox Stations Aggregate Program Mix: Q4/1999
NBC Stations Aggregate Program Mix: Q4/1999
PBS Stations Aggregate Program Mix: Q4/1999
4.3 HDTV or Widescreen Strategies
4.3.1 Strategies for HD differentiation, business models
Table 4.4 HD hours/day by network
4.3.2 HDTV: Types of programming
4.3.3 Use of enhanced sound, extra spectrum
4.3.4 Directions in Sports Broadcasting for DTV/HDTV
Contract negotiations with NFL, NBA, NHL
Stylistic Issues - HD vs. SD Sports Production
Added Costs
4.3.5 Strategies for Fee-Based HD Broadcasting
Fee-based Network HD Over Satellite: Probability
PPV Network HD Over Cable: Probability
4.3.6 Strategies for HD Advertising
4.3.7 Problems and the Solutions for HD Broadcasting
Table 4.5: Main Problems/Solutions for HDTV
Selling DTV Sets
Editing the ATSC Bit Stream
Media Exchange/Broadcast Standards Needed
HD Audience Ratings System Not Developed
Staffing for Dual HD/NTSC Production
Signal Strength/Channel Allocation
4.4 Multi-Channel/Multi-Angle Broadcasting
Table 4.6: Strategic Importance - By Network Affiliate — Tier 1
4.4.1 Multi-Channel Strategies, Business Models
4.4.2 Muli-Channel Determining Criteria
Table 4.7: Determining Criteria for Multi-Channel Content
Determining Criteria — Multi-Channel
Table 4.8: Types of Mulit-Channel Programming Planned
Strategy - Multi-Channel
Preferred Time Slot - Multi-Channel
4.4.3 Strategies for Fee-Based Multi-Channel
4.4.4 Tur-Key System Requirements
4.4.5 Strategies for Multi-Channel Advertising
Table 4.9: Multi-Channel Advertising Drivers
4.4.6 Problems & Solutions of Multi-Channel
Table 4.10: Multi-Channel Problems/Solutions
4.5 Data-Casting and Communications Services
4.5.1 Data-Casting Strategies, Business Models
Table 4.11: Strategic Value of Data-Casting (Network Affil's)
Table 4.12: Data-Casting Programming Plans (By Network)
Average Hours Per Day: Data-Casting
Opportunistic Revenue Generating
4.5.2 Data-Casting: Types of Programming Planned
Table 4.13: Types of Data-Casting Services Planned
4.5.3 Strategies for Data-Casting Advertising
Table 4.14: Data-Casting Advertising Strategy: Top 30 DMAs
4.5.4 Problems/Solutions of Data-Casting
Table 4.15: Problems and Solutions of Data-Casting
4.6 New Services
4.6.1 Other New Servicdes
Section 5 Directions in Cost and Revenue
5.0.1 Introduction 5.0.1
Opportunity - Business Approach, Turn-Key Service
5.1 Plans and Budget — 1998 - 2001 — Top 30 Markets
Table 5.1: Capital Budget Allocations-Top 30 DMAs
Totals: Top 30 DMAs Tier 1 Station
Table 5.2 Total DTV Budget Tiers 1,2
5.1.1 Tier 1:Transmitters & Digital Infrastructure
Table 5.3: Budget: Transmitters & Infrastructure - Tier 1
5.1.2 Production/Acquistion Equipment (cameras,etc.)
Table 5.4: Budget: Production/Acquistion Equipment - Tier 1
5.1.3 Post-Production/Storage
Table 5.5: Budget for Post-Production/Storage
5.1.4 ENG/Remote
Table 5.6: Budget for ENG/Remote
5.1.5 NTSC Support
Table 5.7: Average Budget for NTSC Support
5.2 Cost and Profit/Loss in Introducing New Services
5.2.1 Cost and P/L for HDTV
5.2.2 Multi-Channel Costs
Illustration - Multi-Channel Example, Daytime
Table 5.8: Multi-Channel Broadcasting Equipment (Cost to Station)
5.2.3 Data-Casting Costs
Table 5.9: Data-Casting Broadcasting Equipment (Cost to Station)
5.3 Fee-Based Services
Table 5.10: Interest in Fee-Based Services
5.3.1 Strategies for Fee-Based HDTV Programming
5.3.2 Strategies for Fee-Based Multi-channel/Multi-Angle
Table 5.11: Plans for Fee-Based MC
5.3.3 Strategies for Fee-Based Data-Casting
Fee-Based Communications Services
5.3.4 Strategies for Other Fee-Based Services
5.4 Advertisement Revenue
5.4.1 Trends in Advertisement for HD Broadcasting
5.4.1.1 HD Revenue Drivers
Table 5.12: HD Revenue Drivers
5.4.1.2 Trends in Advertisment Revenue for MC
Table 5.13: MC Revenue Drivers
5.4.1.3 Trends in Ad Revenue: Data-Casting
5.5 Revenue
Table 5.14: Gross Ad Revenue Top 30 (Tier 1, DMAs 1-10)
Table 5.15: Gross Ad Revenue Top 30 (Tier 1, DMAs 11-20)
Table 5.16: Gross Ad Revenue Top 30 (Tier 1, DMAs 21-30)
5.5.1 Forecast to Revenue: 1998-2003
Table 5.17: Gross Ad Revenue 1998-2000, DMA 1-211
Table 5.18: Gr Revenue Top 30 DMAs Tier 1, Tier 2 Commercial
Table 5.19: Revenue Split Analog/Digital Services Tier 1-2
5.6 Forecast of Profit/Loss for Digital Servcies
Table 5.20: Profit/Loss Split (pre-depreciation)
5.6 Cost-Savings Due to DTV
Section 6 Overall Market Forecast-Production & Consumer Products 1998-2006 (update)
6.1 Consumer Products - Fast Growth Scenario
6.1.1 Growth — HDTV sets (Units)
Table 1: Unit Growth of Retail Products
Chart: Comparison - DTV Settop & Receiver Growth: Units
6.1.2 Grand Total — Retail Products (Revenue)
Table 2: Total Revenue from Retail Products
6.1.2.1 HDTV Receivers (Revenue)
6.1.2.2 Settop Converters (Revenue)
6.1.2.3 Grand Total: Retail Products — Fast Growth Scenario (Revenue)
6.2 Growth of Production/Transmission Products
Illustration: Generic DTV Station/Post Production Conversion Process
Table 3: Fast Growth Scenario — TV Stations (units)
6.2.1 Phase One — Basic Pass-Through and Branding
1. New DTV Stations Converted
2. Transmitters
3. VTR/Disk
4. Master Control/Station Automation
5. Routing and Smaller Support Switches
6. CG/DVE devices
7. Encoders MPEG/ATSC
8. Standards Converters
6.2.2 Phase Two: Added Pass-Through (PM, AM)
1. Storage for Midday Pass-Through
2. Storage for Morning Pass-Through
6.2.3 Phase Three — Local News and Production
1. Cameras - Studio, News
2. DTV Monitors
3. Camcorders, Local News
4. Edit Controllers - Systems (low cost/off-line)
5. Encoder-Mobile-ATSC/MPEG-2
6. Telecines
7. Disk Based Carts and Transaction Billing Units
6.3 Outside Post Production Studios: Unit Growth (Phase Four)
Table 7: Market Size for DTV Post Production & Studios: Units
1. Studios Equipped
2. Studio Cameras
3. VTR/Disk Storage/playback
4. Telecines
5. Edit Control
6. Graphics/DVE/CG
7. Post Production Switchers (A/V)
8. Support Switches, Routers
9. DTV Monitors
10. Encoder MPEG-2/ATSC (studio)
11. Standards Converters
12. Camcorders
6.4 Grand totals: Fast Growth Scenario
6.4.1 Fast-Growth Scenario Assumptions
Table 8: Fast Growth Scenario
6.4.2 Unit Grand Totals - Fast Growth Scenario
Table 9: Grand Totals - TV Station/Post Production Units
1. Transmitters
2. Storage: VTR/Disk
3. Master Control/Station Automation/Editing
4. Support Routers and Switches
5. Telecinies w/16:9 4:3
6. CG/DVG/Gfx Station
7. Studio Encoder/Decoder ATSC/MPEG
8. Standards Converters
9. Studio Cameras
10. DTV 16:9 Display Monitors
11. ENG/EFP Camcorders
12. ENG/Off-line Edit Control
13. Mobile Encoders
14. Disk-based Cart/Billing
6.4.3 Revenue Grand Totals - ($M)
Table 10: Grand Totals - Studio/Post Production: Revenues ($M)
1. Transmitters
2. Storage: VTR/Disk
3. Master Control/Station Automatioin/Editing
4. Support Routers and Switches
5. CG/DVE/Gfx Station
6. Studio Encoder/Decoder ATSC/MPEG
7. Standards converters
8. Studio Cameras
9. Telecines w/16:9 & 4:3
10. DTV/16:9 Display Monitors
11. ENG/EFP Camcorders
12. ENG/Off-line Edit Control
13. Mobile Encoders
14. Disk Based Cart/Billing
6.5 Slow Groth Scenario
Table 11: Slow Growth Scenario
6.5.1 Staion/Post Production Units: Slow Growth Grand Total
Table 12: Units: Slow Growth Scenario
6.5.2 Staion/Post Production Revenue: Slow Growth Grand Total
Table 13: Revenue Total: Slow Growth Grand Total
6.5.3 Retail Products-Units/Revenue: Slow Growth Grand Total
Table 14: Units & Revenue— Retail Prodcuts — Slow Growth Scenario
Section 7 Requirements from DTV Equipment Mfgrs.
Linkage - Consumer/Production Products
7.1 Broadcast products, features, & schedules needed
Table 7.1: Feature/function wish list - Broadcast products
Building-block products
Media interchange format
Turn-key solutions
Low cost conversion/endcoding products
Better branding/editing (Compressed data streams)
More 1.5 Gbps or HD Products
Switchable HD/SD production equipment (CGs, DVE's Servers)
7.1.2 Requested feature/functions for Consumer Electronics
Table 7.2: Most requested features/functions CE products
7.1.3 Schedule for introduction of digital broadcasting equipment
7.1.4 Relationship between existing and new systems
7.2 Services and support needed from DTV production and display suppliers
Table 7.3:Cooperative support from DTV production suppliers
Operations and maintenance training
Consumer education/Cross promotional programs
Pre-sale and post-sale online support/Traveling roadshows
Financial incentive programs
7.3 Types of testing needed
Table 7.4: Kinds of testing equipment requested
Rollout timing
Section 8 Conclusion: The future of DTV
Addendum#1: FCC Re-allocation Schedule
DMA 1 New York
DMA 2 Los Angeles
DMA 3 Chicago
DMA 4 Philadelphia
DMA 5 San Francisco/San Jose
DMA 6 Boston
DMA 7 Washington DC
DMA 8 Dallas/Ft. Worth
DMA 9 Detroit
DMA 10 Atlanta
DMA 11 Houston
DMA 12 Seattle/Tacoma
DMA 13 Cleveland
DMA 14 Minneapolis
DMA 15 Tampa
DMA 16 Miami
DMA 17 Phoenix
DMA 18 Denver
DMA 19 Pittsburgh
DMA 20 Sacramento/Stockton/Modesto
DMA 21 St. Louis
DMA 22 Orlando
DMA 23 Baltimore
DMA 24 Portland
DMA 25 Indianapolis
DMA 26 San Diego
DMA 27 Hartford
DMA 28 Charlotte
DMA 29 Raleigh
DMA 30 Cincinnati
Addendum#2: ATSC Table 3
Table A: Compression Formats (From ATSC Table 3)
Table Three: (original specification)
Table 3 Compression Format Constraints
