ATSC3.0 - UNIFYING THE FUTURE OF TV
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1 ATSC3.0 - UNIFYING THE FUTURE OF TV
2 ATSC3.0 - UNIFYING THE FUTURE OF TV Opera TV 2017 IMPORTANT AND IMPACTFUL CHANGES ATSC 3.0 sets the stage for major changes in the way we can deliver content to our consumers and the ways they can choose to consume it. We are in the midst of some very important and impactful changes in our industry. OTT and Pay TV will be transforming in the coming years to dramatically change the way consumers access content, enabling content interactivity, 4K Ultra HD programming, advanced emergency alerts, increased channel choice, mobile viewing capabilities and more. In this paper, we will explore ATSC 3.0 and how it enables the unification of broadcasters and OTT providers to deliver a nextgeneration content experience. In 2015, approximately 76 percent of U.S. households subscribed to cable, satellite or fiber for TV. New research from Parks Associates shows the percentage of U.S. broadband households that use only antennas to receive TV has steadily increased since 2013 to reach 15 percent. While this may seem unrelated it is actually an indication of people cutting the cord and relying on antenna-based reception for local channels, pairing it with OTT-based programming. This trend is expected to continue as OTT services become more robust and further integrated into new Smart-TVs, set-topboxes, Blu-ray players and even down into the silicon level.
3 THE NEW STANDARD A coalition of commercial broadcasters, non-commercial broadcasters and tech companies are working to bring U.S. consumers an immersive viewing experience with more viewing options than ever before without the need to completely upgrade their current home entertainment setup. This coalition has asked the Federal Communications Commission (FCC) to approve the rollout of a new TV standard developed by the Advanced Television Systems Committee (ATSC), ATSC 3.0. The standard will bring the nation its first IP-based broadcasting combining traditional TV broadcasting with broadband connectivity and software aimed to boost engagement between viewers and the content they consume. What does all this really mean to consumers? The nextgen system would revolutionize U.S. TV viewing by enabling: Content interactivity 4K Ultra-High Definition programming (with 8K capabilities down the road) Increase in-channel options Hybrid delivery (broadcast and broadband) Enhanced linear TV, plus on-demand support Context & personalized based advertising Conditional access and digital rights management (DRM) capabilities Mobile and fixed devices, plus companion device support Immersive Audio With ATSC 3.0, broadcasters will have the ability to deliver new and dramatically improved services without requiring consumers to upgrade their current TV setup. Broadcasters will also be able to convert channels to ATSC 3.0 broadcasting while still providing traditional broadcasting familiar to consumers to assist in the transition. This simulcasting capability is similar to what U.S. consumers experienced during the transition to digital TV broadcasting. During the transition from analog TV to digital, the government handed over 6MHz of additional spectrum to stations so they could simulcast digital signals alongside their analog signals. When analog transmissions were complete, the stations gave back the extra spectrum to the government. By taking a similar approach this time around the ATSC 3.0 standard can be implemented by broadcasters and receiver manufacturers with no real long-term impact on spectrum or consumers. In fact, the first live broadcasts of ATSC 3.0 were featured by ATSC, CTA and NAB at the 2016 NAB show in Las Vegas, proving that the standard is ready to be rolled out today. ATSC 3.0 comprises around 20 standards covering different aspects of the system and in total will have at least 1,000 pages of documentation. The latest update will provide broadcasters with increased bandwidth efficiency and compression performance. This provides us with great opportunity to extend and unify the experience for consumers. With the ability to incorporate broadcast, Pay TV and OTT, we can provide a seamless viewing experience to our viewers. ATSC 3.0 was designed with the future in mind. The standards are intended to be scalable and adaptable as new technology and demands enter the market. One of the primary goals of ATSC 3.0 is to provide TV service to both fixed and mobile devices, since mobile devices have proliferated since the original standards were introduced in ATSC 3.0 will enable the seamless use of broadcast combined with broadband to deliver services and components of services. This type of functionality will enable audio streams from different languages to be paired with broadcast coverage to reach more audiences across the globe in the language of their choosing. This is just one of the capabilities that can both create and improve business conditions for service providers and operators.
4 VIEWERS ON THE MOVE In most industries, consumers do not look upon consolidation positively. Consumers want choices, and consolidation tends to reduce the number of available options. This is not true for television viewing. A recent Nielson Report found that traditional TV viewing by year-olds in the U.S. has fallen by 35 percent between 2011 and 2015 as the shift is made towards IP-based services. The behavior of TV content viewing has changed, creating a domino effect leading to the future of TV consumption. Consumers inherently want choices, options and the ability to customize their viewing experiences STANDARDS TO THE RESCUE The ATSC 3.0 specifications are based on universally used standards such as HTML5 for applications, MPEG-DASH for media streaming and transmission, and HEVC for video. This levels the field for content owners and makes it possible to re-purpose content from other devices and other markets. This also aligns ATSC 3.0 with standards used in the rest of the world, giving great synergies both to operators and device manufacturers, as well as to content owners and developers. Consumers inherently want choices, options and the ability to customize their viewing experiences, and more than a few have even gone all the way in purchasing a number of connected boxes to satiate their entertainment desires. The scales are now tipping as consumers realize that they just want their viewing experience to be streamlined and simple. And depending on geography, that means one box, one device, one interface, one input on their television to view everything from linear to OTT. One experience to rule them all. Integrating all these services can be approached from many directions. Subscription video-on-demand services (SVOD) like Netflix and Amazon Instant Video and catch-up TV services like BBC iplayer, have proven to engage viewers with their data-driven experiences and on-demand content offering. Game consoles fully extract the advantages of powerful silicon and fancy input devices in their fluid user experiences. Streaming devices try to entice customers with their app-driven lightweight experiences. Smart TVs, especially those that support HbbTV services, have shown fantastic potential towards conquering the next frontier. And finally, next-gen 4K set-top boxes like Sky Q and TiVo Bolt have demonstrated the opportunity for Multiple System Operators (MSO s) worldwide to rule the living room by delivering fantastic curated services to their subscribers. ATSC 3.0 defines the standards required to create a unified platform and deliver these kinds of services directly to consumers.
5 HTML5 FOR DE- FRAGMENTATION Today s TV devices present a very fragmented set of platforms for content owners and developers, but Linux, Tizen, WebOS, Firefox OS and Android TV have one thing in common: They can all render HTML5 applications. Major content owners such as Google, YouTube and BBC have leveraged that, scaling their content worldwide and to a myriad of devices, without having to develop specific apps for each device or platform. With the avalanche of apps and content now becoming available on OTT, a platform based on HTML5 has significant benefits over any proprietary solution. ATSC 3.0 TO CUT COSTS The fundamental part of ATSC 3.0 that justifies an upgrade from ATSC 1.0 is that new technology is more efficient. New codecs save bandwidth and give room for higher definition (UHD, HDR) content, and new protocols and formats create the opportunity for synergies with other markets and the web in general, and will save development cost for all parties in the value chain. THE MARRIAGE OF LINEAR TV AND OTT According to industry analyst firm MoffettNathanson, half of the decline in linear television viewing in 2015 was due solely to Netflix. Consumers are driving the rapid change in television viewing and all contestants for their attention must continuously evolve their experiences and find ways to unify their offerings to stay relevant. Both sides bring something to this arrangement, or marriage, between linear TV and OTT. Linear television providers create a large chunk of the live content that viewers are interested in. OTT and VOD services offer the variety and personalization choices viewers are interested in. By combining the two within a single platform, the consumer is getting the best of all the choices they want without the hassle of switching through interfaces. By combining the two within a single platform, the consumer is getting the best of all the choices they want Linear TV providers bring live and scheduled TV programing at the particular time it is offered, on a particular channel it is presented on to subscribers. These providers have a stronghold on consumers and have the opportunity to be the winners when it comes to providing TV services within the home due to their significant licensing deals with content providers and the easy enablement of OTT. Increasing numbers of consumers are cutting the cord and moving to free-to-air services, skinny bundles or SVOD services. With the combination of broadcast and broadband, broadcasters can link their linear programmers to their online offerings, and create exciting new experiences that have the potential to engage their viewers in new ways, and also lead their viewers from the linear programs to their related content offered over broadband. Linear TV and OTT providers must embrace open standards such as ATSC 3.0, and find more ways to coexist on devices to achieve the ultimate viewing experience. Singular content or platform owners cannot dictate what that future will be. Consumers will decide, and they need better choices.
6 ADVERTISING WILL CHANGE TO DRIVE THE INDUSTRY FORWARD Research firm ZenithOptimedia recently reported that global advertising spend grew 4.9 percent to $579 billion in 2016, up from 3.9 percent in The main driver of this increase in ad spending is Internet advertising, which includes mobile and OTT platform advertisements. Linear TV is still the winner in terms of advertising dollars spent compared to streaming services. OTT however, is the fastest-growing segment of video advertising views, creating a whole new advertising channel for brands. Networks understand the appeal of digital advertising and are beginning to shift their sales tactics. NBC Universal announced a new way for advertisers to target audiences with faster-than-normal ad buys and placements. With improvements in the availability of HTML5 on connected TV devices, coupled with the pairing of smartphones and TVs, interactive TV advertising is becoming a reality and has the potential for substantially higher ROI based on more targeted and precise advertising possible with the extensive data from OTT subscribers. With the connection between broadcast and broadband, new ways of targeting ads are possible. For instance replacing ads in broadcast with better targeted ads served over broadband can be possible to optimize both the user experience and the revenue. SMART TVS FOR THE WIN The rise of Smart TVs and connected devices like gaming consoles and streaming boxes has demonstrated real consumer benefits. More than half of the TVs shipped in Q1 of 2016 were smart TVs. In North America, 56 percent of TV shipments were smart TVs in the quarter, according to IHS. More than half of the TVs shipped in Q1 of 2016 were smart TVs Consumers can now tailor their subscriptions and viewing habits to only what interests them. Furthermore, these Internet-connected devices can provide content producers and advertisers with a wealth of anonymized, targeted data, allowing more precise analytics and measurement. This allows them to create better content, more of what people want to see and the ads that accompany the content will become the best fit for the audience. Viewers are more likely to be receptive to advertising when it is relevant to their interests. So everyone could be a winner in this scenario.
7 AVAILABILITY IS KEY Being able to view content on any device, at any time, from any location is now something consumers readily expect. The content delivery landscape will become much more complex and networks and production companies must adapt and package their content for delivery in multiple formats to retain viewers. The rapid shift in focus amongst mobile operators, from voice to data, should have been an early signal to the Pay TV industry. Tom Wheeler, the previous Chairman of the Federal Communications Commission, put it mildly when he said: It s time to unlock the set-top box. Similar to the way consumers had to lease their home phone from the telephone company in the early days of landline phone service, pay TV consumers now lease their set-top box from their provider. But as the future of television is starting to demonstrate today, a set-top box is not the only way to consume content. A plethora of connected devices are changing the landscape, and consumers want access to their content on these devices, even as they travel. While over 130 million new IP-connected set-top boxes ship each year, this connectivity is primarily being used for IP-VOD services. It is possible to transform these devices into the ultimate linear plus OTT experience, but the transition is moving forward much slower than the pace of OTT technology development. Sony, Disney, HBO and AT&T all recently made announcements about the acceleration of their Internet streaming businesses. They are introducing new services that don t require set-top boxes and don t require consumers to be locked-in to one service over another. Even with Wheeler no longer being at the helm, the transition to unlocked set-top boxes is anticipated to continue to make headway. Consumer demands and viewing habits are quickly building momentum making it unlikely that the industry can avoid evolving for too long. ADAPT OR DIE Many linear TV providers are struggling to adapt quickly enough to maintain their audiences and survive this shift in viewer demands. It has been said that, It is not the strongest species that survive, nor the most intelligent, but the ones most responsive to change. With ATSC 3.0, linear providers can be a part of this shift to more dynamic offers for consumers more easily than ever before. Linear TV providers are actually in the best position to be the ultimate winners. But they must be ready to fully embrace OTT to ensure they are part of delivering the living room revolution that viewers want. Their very survival depends on it the delivery of one experience to rule them all. If Pay-TV, linear TV and OTT adapt and collaborate, we re on the cusp of a new era where content is no longer king, but the viewer is. Viewers have more control over what content they get and how they get it than ever before with that power increasing. Soon they will be able to use a uniform platform to view all content, no matter the source. ATSC 3.0 provides the framework for this next-level user experience, and the more quickly the industry can embrace this reality, the more quickly they can embrace the benefits it has to offer and grow revenues in the process.
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