Sinclair’s One Media to Spend $16 Million in 2017 on ATSC 3.0 'Implementation'

Sinclair’s One Media is continuing development of ATSC 3.0 products and services that will “lead to next-gen business opportunities,” said CEO Chris Ripley on a Wednesday earnings call. One Media’s ATSC 3.0 efforts include work on single-frequency-network deployment, automotive telematics, “a 3.0 transition plan and other business-model opportunities,” said Ripley.

The company estimates One Media will spend $16 million in 2017 on the “implementation” of ATSC 3.0, said Chief Financial Officer Lucy Rutishauser. Sinclair “for competitive reasons” won’t disclose the “specifics of where we’re putting the money for One Media” in its ATSC 3.0 development activities, Ripley said in Q&A. Sinclair is in “the early days” of its announced plans for developing ATSC 3.0 receiver technology for use as an audience-measurement tool (see 1611020025), he said. “Our focus right now is making sure we can get 3.0 deployed and that we have all the sort of basic capabilities that will enhance our core business, first and foremost. If we can add measurement on top of that, that’s sort of the cherry on top, if you will, at this point. But there’s plenty of more near-term business opportunities that we’re spending resources on.”

Sinclair hopes the FCC completes its ATSC 3.0 rulemaking "process" by "sometime this summer," Ripley said. "You're going to start seeing beta tests hit the market this year, sort of paralleling that process," he said. Commercial deployments of ATSC 3.0 would then begin in 2018, "in conjunction with repack activity" from the spectrum auction, he said. "We're going to be repacking, here at Sinclair, 93 of our 170 stations, and the benefit to that is, that there'll be a lot of new equipment bought on these stations, equipment that will be ATSC 3.0-ready. So this is sort of a nice synergy, of rolling out 3.0 in conjunction with the repack." Broadcasters will need "a certain level of receiver penetration for there to actually be a business" for ATSC 3.0, and receiver availability is "harder to predict." he said.

The company is in “active discussions with all of the OTT players that you read about,” Ripley said of negotiating content deals with over-the-top streaming services. Sinclair already participates with CBS All Access and Sony’s PlayStation Vue OTT services, he said. “It’s a lengthy process to work some of these things out because we’re very careful about what we’re going to do in terms of ensuring that our compensation” is on par with that of its multichannel video programming distributor deals, he said. Ripley thinks “this year, you’ll probably start to see some movement on that as more of these players enter the marketplace and realize that they need the local affiliates to have a robust offering,” he said.

Senior Sinclair management is “quite optimistic” about Chairman Ajit Pai’s “new leadership” at the FCC “and their plans to deregulate the industry and put us on an even playing field with other forms of communication,” Ripley said. If the agency acts to deregulate broadcast ownership rules as it’s expected to do this year, Ripley expects “transformative” mergers and acquisitions “to come on the heels of that,” he said. The “next wave” of industry consolidation that likely will follow any deregulation “will, I predict, allow broadcasters to compete more effectively,” including against “telecom and cable players,” Ripley said.