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In November 2017, the FCC voted to approve the ATSC 3.0 transmission standard that will serve as the basis for Next Generation TV. This new transmission standard, and several innovations that are slated to come with it, are a major part of broadcasters’ efforts to keep up with the transformation of the television industry. This evolution is nearly upon us; the FCC’s order, and with it, the transition to ATSC 3.0, went into effect on March 5, 2018, although the actual rollout of the transmission technology will take time.

ATSC 3.0 is essential for broadcasters to keep up with the quickly-evolving television ecosystem—one that is becoming increasingly influenced by internet-connected devices, over-the-top (OTT) video services, and other multi-video programming distributors such as cable companies. The National Association of Broadcasters, the Consumer Technology Association, America’s Public Television Stations, and the Advanced Warning and Response Network (AWARN) Alliance argued that the new standard is needed to “enable television broadcasters to continue to serve viewers effectively, compete in the marketplace and innovate by voluntarily utilizing a new transmission standard permitting broadcasters to upgrade to an IP-based transport layer as other industries have already done.”¹

The way Americans consume television is changing. Surveys show that the traditional broadcast and cable companies face increasing competition from streaming services.² The Pew Research Center found that 61 percent of U.S. adults aged 18 to 29 years old reported that an online streaming service was the primary way they watch television.³ Just 31 percent of Americans in the same age bracket said a cable or satellite subscription was their primary way of watching television, and only 5 percent reported relying primarily on a digital antenna.⁴ More than half of 18- to 29-year-olds surveyed by Morning Consult said they use streaming services more than traditional television, as did 40 percent of 30- to 44-year-olds.⁵ The same report found that 40 percent of Americans said they watch more streaming services compared to two years ago.⁶

Other reports have found that streaming services have almost as many viewers as traditional television. Last year, the Interactive Advertising Bureau reported that Americans spend 39 percent of their time on internet-connected televisions watching traditional live TV, and 24 percent streaming video.⁷ Among internet users, 31 percent reported a streaming service as their primary way of accessing video content, compared to 35 percent who named their cable provider.⁸

Amazon,⁹ Facebook,¹⁰ and Twitter¹¹ have secured deals to stream live sports on their platforms, expanding the battle for viewers to an arena that has traditionally been a major revenue source for the broadcast industry.¹² The National Football League has reportedly asked media companies to bid on seasons of Thursday Night Football and are signalling that if TV networks are not interested, the contract could go to an online streaming company.¹³ In 2017, Amazon won the digital streaming rights for Thursday Night Football, and Twitter, YouTube, and Verizon are competing with Amazon for the rights this year.¹⁴

The advent of streaming services and their growing popularity are precisely why ATSC 3.0’s promised innovations are so vital to broadcasters.

These new features include upgrades to the viewing experience unavailable in the current broadcast standard, such as ultra high-definition picture quality and audio quality that is more personalized and immersive.¹⁵ Broadcasters also say that the new transmission standard will enable the integration of broadcast programming with other Internet Protocol (IP) services, advanced emergency alert information, the ability to target news and weather by geolocation, and datacasting.¹⁶ The new transmission standard will also bring enhanced picture quality to mobile devices.

ATSC 3.0 will also allow broadcasters to track viewers’ habits and air targeted advertisements.¹⁷ Sinclair executive Mark Aitken said viewer data would give the company “tens of millions of extra dollars in [its] pocket.”¹⁸

The importance of ATSC 3.0 to the future of the broadcast industry makes Sinclair’s power as a key patent holder in the space especially significant. Although broadcasters eagerly await the transition to the new transmission standard to retain and acquire more viewers, they will all have to pay royalties to Sinclair to participate in Next Generation TV.