Pioneering TV digitally Testing: Baltimore's Sinclair Broadcast Group claims to have found a way to make digital TV pay multicasting.

Broadcasting

March 23, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

In the battle over the future of television, Sinclair Broadcast Group Inc. is sticking to its guns.

The Baltimore-based broadcaster has begun transmitting trial signals on digital television and will soon begin demonstrations of the technology.

Sinclair's strategy for entering the high-stakes digital market has drawn some criticism and is being watched closely by an industry that is still unsure about just how to use the new technology.

"Sinclair's at the leading edge of this story," said Harry J. DeMott, an analyst for Credit Suisse First Boston in New York. "The market will decide if they're right or not."

Like other television broadcasters nationwide, Sinclair received federal licenses in April to transmit digital signals that offer better sound and picture quality than current analog broadcasting.

There has been disagreement, though, over what to do with those signals. A broadcaster could use its digital capacity to put out one extremely sharp high-definition television, or HDTV, channel. Or, it could chop one channel into four or five, an approach called multicasting.

While digital multicasting would offer a better picture than analog, it wouldn't have quite the same quality as HDTV. However, multicasting would give broadcasters more channels and, therefore, more ways to derive advertising or subscription revenue from digital TV.

Sinclair has left no doubt about which way it is leaning.

"We, as a broadcaster, don't see how HDTV is a viable economic entity in the foreseeable future," said Nat Ostroff, Sinclair's vice president for new technology.

Multicasting, by contrast, offers "the one business model that you can put numbers on and get a return on your investment," Ostroff said. For example, Ostroff said Sinclair might use multicasting to offer subscription TV services that would compete with cable.

Some analysts agree that multicasting holds more financial promise than HDTV, at least for now.

"The economics are far more favorable to doing multicasting than doing HDTV," said William Meyers, an analyst for BancAmerica Robertson Stephens in New York. "An advertiser isn't going to pay more for a prettier picture."

Sinclair's preference for multicasting over HDTV has ruffled more than a few feathers in Washington. Some lawmakers and consumer advocates accuse the broadcasting industry of using the promise of HDTV to win free access to valuable chunks of the digital spectrum, and then backing away from that promise once the licenses were awarded.

In September, just weeks after Sinclair announced its intention to pursue multicasting, company President David Smith was subjected to a round of hard questioning by members of the Senate commerce committee.

Perhaps noting Sinclair's experience, the networks have generally been low-key about their HDTV strategies. DeMott called Sinclair "the leading proponent of multicasting" and said others may be rooting for it from the sidelines.

"A lot of people would like to see multicasting because you can make more money on it, even though it's not politically popular to say so," he said.

John Earnhardt, a spokesman for the National Association of Broadcasters in Washington, said the industry does support HDTV. "We think that HDTV is really going to drive consumers' acceptance of digital television," he said.

When asked about Sinclair's skepticism toward HDTV, Earnhardt said, "Sinclair's position is one of several that are out there. They've certainly been very vocal about their position."

Sinclair's digital strategy is now entering an important new phase. The company has begun transmitting on digital channels assigned to its WBFF and WNUV stations.

Currently, those trial signals are not intended for viewing, because no commercially available sets can receive them. However, Sinclair hopes to have prototype sets ready to show demonstration broadcasts by the end of April.

The demonstrations will take place at a still-undisclosed location somewhere in downtown Baltimore and will be open only to invited viewers, such as legislators and industry officials.

It will probably be some time before most Baltimore viewers start getting digital broadcasts. Digital sets could be on the market by the end of this year, but they will be very costly at first.

Some stations -- though none in Baltimore -- have committed to introducing digital broadcasting by November. The FCC has set a May 1999 target date for other stations in the top 10 markets to start digital transmissions, while the top 30 markets -- including Baltimore -- are slated to go digital by November 1999.

Ostroff said "it could easily be a year from now" before Sinclair offers digital broadcasting of any kind to its Baltimore audience.

In the meantime, he said, Sinclair is simply trying to determine the best uses of a budding technology. "We're experimenting with the possibilities," he said. "We're very excited about it. It's going to be fun."

Pub Date: 3/23/98

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