TV Broadcasters Excited by Prospects for NEXTGEN TV

TV Broadcasters Excited by Prospects for NEXTGEN TV

With the rollout of ATSC 3.0 standards (called NEXTGEN TV), broadcasters can finally see what viewers are watching, personalize their experience, and deliver ads in real time.

What is NEXTGEN TV?

Under the old antenna television broadcasting standard, ATSC 1.0, TV shows are broadcast on the airwaves to large geographic areas. Therefore, shows and advertisements on those airwaves are by necessity depersonalized to appeal to the large geographic audience. To make matters worse, broadcast TV revenues have been disrupted by households cord cutting – cancelling their cable subscriptions (including broadcast channels) in favor of streaming services, which offer low-cost access to thousands of shows on demand. Many households have paired paid streaming services with free over-the-air television antennas to watch the programming of public broadcasters.

To remain competitive, broadcasters are currently transitioning to ATSC 3.0 standards, branded as NEXTGEN TV. NEXTGEN TV represents an upgrade in broadcast technology from ATSC 1.0 to ATSC 3.0 standards created by the Advanced Television Systems Committee (ATSC). The industry skipped over ATSC 2.0 due to rapid advances in technology. NEXTGEN TV compatible TVs and other devices are capable of two-way communication with television stations, receiving content via conventional broadcast methods and transmitting data back to the station via an internet connection. Connection to the internet is required for features such as customized ads, on-demand content, and interactivity.

NEXTGEN TV allows broadcast stations to deliver more high-definition and standard-definition channels, and higher-quality sound. With an internet connection, broadcasters can deliver more specific weather and emergency information tailored to a viewer’s immediate geographic area, as well as interactivity with the TV (e.g., customization of viewing guides).

TV Advertising Will Move to Programmatic Ad Buying

Alongside the personalization, the rollout of NEXTGEN TV will allow TV stations to sell TV ads programmatically.

Formerly, broadcast networks would sell TV spots based on the time of day and shows the ad spot was located in. To estimate how many people watched the show (and hopefully the advertisement), broadcast networks would rely on surveys of TV viewers across the country (such as those offered by Nielsen).

However, NEXTGEN TV will allow broadcasters and their advertisers instant access to see how many households are tuned to a given channel, and at what times. This information could be paired with further viewing characteristics to build household profiles to launch consumer-specific ads.

With NEXTGEN TV, TV advertisers will be able to sell their spots on digital ad exchanges. Linear TV ads will be sold programmatically (i.e., using an automated auction system) and tailored to respondents’ demographic profile, right as the ad is about to air on the viewer’s screen. Some consumers may also backlash against more personalized advertisements due to privacy concerns, as was experienced by digital advertisers.

Where is NEXTGEN TV Now?

As of June 2022, NEXTGEN TV channels are available in 51 markets, reaching over 50% of US households. Broadcasters plan to reach more than 75% of the US population by the end of 2022. However, stations in smaller markets may find it difficult to finance technology upgrades and will continue broadcasting in the ATSC 1.0 standard. The impact of NEXTGEN TV is projected to be limited initially, because consumers need to purchase a set-top box or a new, ATSC 3.0 compatible TV to make use of the signal.

As the ATSC 3.0 standard reaches more cities and more households buy new televisions with ATSC 3.0 antennas, it will support more advertising spending, and customization and interactive options may attract more viewers to broadcast TV.

Want to Learn More?

For additional information and analysis of US industry trends, see Advertising Services: United States and Television: United States, reports published by the Freedonia Focus Reports division of The Freedonia Group.

Advertising Services: United States forecasts to 2022 and 2026 US advertising services revenues in nominal US dollars. Total revenues are segmented by establishment type in terms of:

  • advertising agencies
  • media representatives
  • public relations agencies
  • media buying agencies
  • direct mail advertisers
  • display advertisers
  • ad material distributors
  • other establishments such as product demonstration, display lettering, and welcoming services

To illustrate historical trends, total revenues, the various segments, and advertising spending by media type are provided in annual series from 2011 to 2021.

Television: United States forecasts to 2022 and 2026 US television revenues in nominal US dollars. Total revenues are segmented by source in terms of:

  • cable networks
    • cable networks licensing
    • cable networks air time
    • other cable network revenues
  • cable distribution
  • broadcast networks and stations
    • broadcast air time
    • other broadcast revenues such as affiliation fees, licensing fees, and retransmission fees
  • streaming

To illustrate historical trends, total revenues and the various segments are provided in annual series from 2011 to 2021.

Some of our related reports include:

About the Author

Owen Stuart is a market research analyst with Freedonia Focus Reports. He enjoys working with primary and secondary research to bring the latest insights to Focus Reports, and his experience as an analyst covers multiple industries.