Distribution & Delivery Global Viewpoint – May 2017

Streaming: ATSC 3.0’s Competition

"Ownership of connected televisions and streaming media players is accelerating while the availability of streaming content is simultaneously expanding. These combined forces will continue to drive increased adoption of connected devices within U.S. households,” John Buffone, executive director, Connected Intelligence.

I toured NAB 2017 with an eye to the next trend in broadcasting. Would it be 4K, HDR, VR. According to the show floor, I'd predict a short-term boost in HDR technology. Even so, based on the research I’ve seen, the future for television viewing will be streaming, which could include HDR. If the latter is true, then ATSC 3.0 is the only hope for terrestrial broadcasters’ future.

It’s no secret that millennials and other younger television viewers no long center their lives on the living room TV set. Instead, they expect their entertainment to be available on their smart phones and tablets. They may use the home television to display a sporting event, but it is likely they will also have their personal device close at hand to simultaneously trade thoughts and comments with their friends or watch a different streaming program.

Broadcasters are no longer the only delivery technology. Television viewing is declining across all age groups. Nielsen research shows that the number of hours of TV watched per week by viewers aged 50 to 64 dropped by 1% since 2010. But over that same period, younger viewers 18 to 24, experienced a 32% drop in TV viewing.

An article from Ad Age, citing figures from Nielsen, reported that every returning drama that aired Tuesday night saw viewers decline by double digits while debuts were a

An article from Ad Age, citing figures from Nielsen, reported that every returning drama that aired Tuesday night saw viewers decline by double digits while debuts were a "mixed bag." Image source: Business Insider. Click to enlarge.

This change in viewership is most obvious for sports and the giant media companies are feeling the pain. The Walt Disney Co. recently warned investors that profits at ESPN were down because fewer customers are buying pay-television packages. This sparked a selloff on Wall Street that wiped nearly $60B in value from companies such as Disney, Viacom, Fox and Time Warner.

Most sports’ ratings are down

Even the biggest sports franchise, the NFL, saw viewership decline by 12% from 2015. Officials placed the blame of the dramatic plunge on the presidential race. But even after that contest was decided, ratings for the rest of the regular season were off 9% and playoff ratings were down 5%.

But it wasn’t just American football that saw viewers tuning out. Professional golf has experienced similar viewer losses with the final round of the Masters having its lowest ratings since 1980. A week later, the RBC Heritage golf tournament drew 2.4 million viewers on CBS and just a 1.4 rating for Sunday’s final round, representing an 8% drop in viewers and 13% ratings drop from the previous year, according to Sports Media Watch. Broadcasters have seen nearly a dozen consecutive rating declines for final round golf action, seven of those multi-year lows.

ATSC 3.0 is broadcasting's best hope for a bright future.

ATSC 3.0 is broadcasting's best hope for a bright future.

Batter up—or not

Major League Baseball just kicked off its 2017 season, and there’s little doubt the league is hoping for a repeat of the 2016 World Series where – for the first time since 2004 – viewership and ratings ticked up significantly, driven by the 40 million viewers who tuned in for Game 7 between the Chicago Cubs and Cleveland Indians.

But even with an average 23 million viewers viewing the 2016 World Series the TV audience was only half (52%) the average number of viewers that watched the Yankees and Dodgers Fall Classic battle in 1978. That series averaged more than 44 million viewers.

It’s broken—now fix it

In a recent blog post, Ooyala says, “The issue, of course, is how to maintain and grow a fan base as baby Boomers begin to exit and Millennials enter…” Translation, “…as baby Boomers begin to die off.”

According to AdWeek, the average age of the MLB’s TV fan is 56, the oldest of any major U.S. sport. The NFL is not far behind at 49 and the NBA a relatively young 41.

A global survey from Ampere Analytics showed that only 14% of viewers 18-24 are interested in sports as a genre compared to 22% saying that they 'love TV shows.'

U.S. Internet households. Devices are connected to the Internet, not just capable. Source: The NPD Group/Connected Intelligence Connected Home Entertainment Report. Click to enlarge.

U.S. Internet households. Devices are connected to the Internet, not just capable. Source: The NPD Group/Connected Intelligence Connected Home Entertainment Report. Click to enlarge.

ATSC 3.0 to the rescue?

What does all this have to do with ATSC 3.0? The technology supports IP delivery, multiple streams and moving forward, it can support return links (think targeted advertising). Combined this means that broadcasters can continue to play a role in delivering a mainstay of OTA broadcast, sports programming.

There remains the challenge of attracting an increasingly 'connected' audience of viewers.

An Ooyala blog post recently noted that Unisphere Research conducted a study for Level 3 Communications and it predicted that OTT viewership worldwide will outnumber traditional TV viewership before the end of the decade. Half of survey respondents said they expect live-linear OTT viewing to exceed typical broadcast TV viewing by 2020 globally, with nearly three quarters (70%) saying they expected it to happen by 2022.

Researcher NPD, meanwhile, released a report, based on 5,300 consumers, saying that 60% of U.S. Internet households now have at least one connected TV, an increase of more than 6 million homes from a year ago. As TV manufacturers increasing migrate to operating systems from Roku, Amazon and Google, it becomes easier for content owners to distribute their assets to more users as there are fewer platforms to navigate.

Can an ATSC 3.0 broadcast model remain viable against these fast-footed challengers? Yes, but broadcasters need to make it happen soon and the technology must have strong support from the consumer electronics industry with the rapid introduction of multiple products.