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Next Gen TV exec: ATSC 3.0 is 'taking the web and sending it out over the air'

? ATSC 3.0 broadcast TV will likely be available to consumers in 2020.

? Platform will allow broader content monetization opportunities for broadcasters.

? Payback on investment in the new platform expected after five years.

The Pearl TV consortium is leading an effort to bring the ATSC 3.0 broadcast standard to the market, which would not only make broadcast TV a data-rich interactive environment like a digital platform but potentially provide a communications channel for a range of internet of things and mobile applications. The consortium is leading tests in Phoenix alongside additional tests in Dallas; Cleveland; and Raleigh, N.C.

Formed in August 2017, Pearl helped develop ATSC 3.0 technologies in the first three months of 2018 and launched its Phoenix testing April 6 with a goal to develop the basic Next Gen TV platform built on ATSC 3.0 and the business models that would replace the current free-to-air broadcast standard ATSC 1.0. Pearl hopes to launch a consumer version of the platform in the second half of 2019 or early 2020.

S&P Global Market Intelligence caught up with Pearl TV Managing Director Anne Schelle to discuss lessons learned in the testing phase as well as challenges and opportunities associated with the new standard. What follows is an edited version of that interview.

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Pearl TV Managing Director Anne Schelle
Source: Pearl TV

S&P Global Market Intelligence: What are ATSC 3.0 trials testing exactly?

Anne Schelle: It's a beta market, but not for consumers for ourselves. The receiver manufacturers have about 18 months lead time when they go to locking down receiver features [to when they go to market]. ATSC is a transmission standard not a receiver standard, so we've got to come up with the basic framework for the television service, what the key components are that must be in each device, and for us to be able to monetize the platform in order for the consumer to have a common experience. It's really getting an end-to-end system that can be adopted by the industry.

What are the potential business applications and what will come first?

We initially see the enhanced television platform for broadcasters as the first place we'll be able to monetize, and that would be looking at the ability to enable content security protection. That would allow for our signal being secure from any middle-ware attacks, but also from parties just taking it and repurposing it. The content security protection also brings the ability to add digital rights management. With digital rights management you can offer pay opportunities that we didn't have before. We can easily layer on access to video-on-demand libraries and other things of value to studios. It creates a marketplace for their content.

The things I like about it is the enhanced quality and it's versionable. Whatever it is in the future, whether it's augmented reality, virtual reality, and that's all we ever watch TV in again, it won't break the back end. It's highly efficient, using the latest in Codex technology, which allows us to do more with less spectrum, which is important when we're talking about spectrum sharing. Over time it allows us to aggregate spectrum and offer it for these other future services. But we're starting at the basic TV service, and we do think automobiles are a natural extension. We're going to do an auto trial in Phoenix.

In terms of driverless vehicles?

In terms of testing out prototype use cases for connected cars and the future of autonomous, yes. It would be things like downloading navigation files and other stuff, and a lot of the connected-car communications are car to car. They're looking for redundancy, and also applications in infotainment and local information and other content that could go to the car. There are multiple use cases there. But again we're starting with the enhancements to our current services. The next logical one we see is automotive.

So broadcasters could monetize libraries of content that are not broadcasting live?

Oh yes, this is hybrid. We're basically taking the web and sending it out over the air. When you do that you can essentially combine your linear live TV with an over-the-top feed. You can enable DVR, catch-up, all these monetizable pathways. The other piece of this is it's a modernized application, so we're sending an application over the air essentially, almost like a Netflix Inc.-like experience or a Hulu LLC-experience. Everything that's available to the internet and on OTT will be available linear live, and that's really new for us. We also think it brings viewer retention.

So viewers will have access to a universe of content, but also that valuable free content, the ability for us to offer the 4K Ultra-high-definition content, the advanced audio. There's a lot of value in advanced audio that's not even been monetized. For example, for sporting events, in the audio stream you can turn off the commentary and just hear the game as if you're at the game. You can turn on different announcers. You can listen to home or away announcers. You can do different languages. What I really like is dialog enhancement: you can boost the dialog and take out the background noise, that’s never been available before. That’s something that has a lot of value.

Do you have any specific ROI expectations?

For broadcasters monetizing on the data and addressibility, the viewer retention and paywalls, payback is within five to six years, and that's on a conservative basis on the expense for the rollout of 3.0.

What are some of the biggest challenges you’ve encountered with these tests?

The thing I’m worried about the most is the scale. How do you scale this quickly? I think broadcasters need to look at not owning so much of certain aspects of this. So are there partners we could seek that can help to scale on the user-interface side? Are there partners that can help to scale on device distribution?