Sinclair Broadcasting Group is developing an "overlay network" to supplement the programming its affiliated stations air—especially in daypart segments, which now carry a variety of syndicated programming.
"We don't envision creating a new network to compete" with existing networks, Sinclair President and CEO Christopher Ripley said during a presentation to the Media Institute's monthly luncheon in Washington on Tuesday, June 20. He described the "overlay" as a "supplement to enhance existing networks we already carry."
Ripley also emphasized Sinclair's "keen focus" on local news, which he called "the most dependable part of our business…a jewel." He said that a major part of the $40 million investment Sinclair made after acquiring Fisher Communications' 20 stations and Allbritton Communications' seven stations in 2013 went into bolstering local news capabilities.
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He also hinted at visions for expanding Sinclair's "Comet," "Charge! and "TBD" secondary network transmissions, which now consist almost entirely of library content.
Ripley said he "expects to" add more original programming after the Tribune Media deal closes, noting that "Sinclair will be more vertically integrated."
As for the current pending purchase of Tribune Media, Ripley said he expects the merger to be completed by the end of the year after federal approvals. He used the deal as an example of broadcasting's relatively small role in the communications ecosystem.
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"When you look at the entire communications industry, broadcasting is a pimple," he said.
"Even as larger broadcasters, we are tiny compared to telephone companies. That's the ecosystem we play in," Ripley said, adding that "Thankfully, [FCC] Chairman [Ajit] Pai has an action to reassess rules" that restrict broadcasters' ability to compete against other media.
"The internet is vacuuming up every industry and broadcasting will not be immune from that," Ripley said. "All the rules that govern this industry are antiquated, from a bygone era." He cited data showing that local TV stations account for only 16% of local advertising now that more online sites are offering localized and targeted commercials, often including 15- and 30-second video ads that look like TV commercials.
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Big ATSC 3.0 Visions
Ripley extolled the values of the evolving ATSC 3.0 format (also called "NextGen TV"), which Sinclair is heavily backing. He emphasized that the planned simulcasting of 3.0 and existing 1.0 digital transmissions "will require broadcaster cooperation at the local level," but that it "won't require public funding" as did the 2009 digital transition.
Stressing the "mobile first" value of NextGen TV, Ripley also acknowledged its capability to carry up to five times the amount of data as existing digital broadcast and that for the consumer it will offer "lower costs than conventional wireless systems."
"3.0 will ultimately not just be used for TV or mobile video," he said, “but rather it will be the foundation for all types of as-yet unimagined applications." He cited a recent test of 3.0 with an automaker in Michigan, which developed 3D mapping. "It was a perfect use case that we didn't even know existed," Ripley said, indicating that 3.0 will find applications in the Internet of Things and other evolving ventures.
"You need scale to provide free services," he said, again to support his view that Sinclair's near-nationwide footprint will be achieved via acquisitions or the consortium of local stations that it is spearheading.
During a wide-ranging on-stage discussion with Media Institute Chairman Richard Wiley of the Wiley Rein law firm, Ripley also explained more visions for the Tribune Media acquisition. He said the alliance will "help us expedite 3.0 for a national rollout."
Ripley also acknowledged that the Tribune deal may involve some divestitures, although he repeated his stance that there is "no competitive reason" to divest stations.
Responding to Wiley's question about the widely held opinion that Sinclair supports politically right-wing positions, Ripley explained that, "Some of our shareholders have a conservative bent, but that doesn't define what Sinclair is."
"If we were as conservative as we're accused of [being], our success wouldn't be as great as it is," he insisted. "It's about having broad appeal to our audiences."
He also described plans to focus Sinclair's local sales into a more marketing-driven organization, but offered no details.
As for the viewership cap and the UHF discount, Ripley said that, "There is no other industry regulated by the FCC that has a cap."
"The usefulness of the cap no longer makes sense," he said. But he waffled at Wiley's question about buying more stations.
"It's a commercial inevitability," Ripley said. "If we don't do it, someone else will."
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Citing Sinclair's acquisition and deals with antenna maker Dielectric and Acrodyne Industries, Ripley said that the company intends to expand its role on the equipment supply side of the business. In particular, Acrodyne's single-frequency network (SFN) technology can expand the reach of broadcast stations using several transmitters simultaneously.
In response to a question from B&C about Sinclair's investment in Saankhya Labs, a chipmaker in India that has developed ATSC 3.0 chipsets to power consumer devices, Ripley described the goal as expanding use of Saankhya's mobile technology. He said that company was an ideal fit because it has a major presence in India, which is "perfect for 3.0," especially because the UHF spectrum there is underused.
He said that the ATSC 3.0 chips from Korea are TV-only oriented, and that Saankhya's technology is "a way for us to accelerate the marketplace" for other services.
But Ripley insisted that Sinclair's "global aspirations" are strictly on the technical side.
"We seek to take strong brands in the U.S. and extend them to the rest of the world," he said. And then he added a mysterious line: "But it's early days."
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Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.