Lessons From USDTV’s Demise

LESSON'S FROM USDTV'S DEMISE
[SOURCE: Broadcasting&Cable, AUTHOR: John M. Higgins]
Is there any way to make money from the all-new capacity created by the switch to digital broadcasting? The conversion to digital gives every station in the country a tremendous expansion of capacity. In the same amount of spectrum occupied by a conventional analog signal, a broadcaster can fit a high-definition feed of its main station and still have space to create three additional channels. A station that chooses not to broadcast an HD signal can create up to five additional channels. In one sense, this is a tremendous windfall in an industry that faces slim growth prospects in its core business. Think of it as a government grant of ritzy beachfront real estate given exclusively to people who already live in the neighborhood. The downside is that creating that much new property out of thin air produces a glut. Digital puts more TV real estate on the market than there are immediate viewers or advertising dollars to support it. “Unless broadcasters create a viable economic model, the industry may have spent billions upgrading stations without any obvious return on investment. If that’s true, it may a classic case of “be careful what you ask for, you might just get it!,” says Bear, Stearns & Co. media analyst Victor Miller.
http://www.broadcastingcable.com/article/CA6355397.html?display=News