It sounds like there is good pricing power for companies selling digital broadcasting equipment (Divicom.)
TV stations brace for digital switch
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Mark Larson Staff Writer
Four of Sacramento's television stations are assessing weighty issues -- literally -- in how they'll make the November 1999 federal deadline to begin digital broadcasting.
They must decide whether their broadcasting towers can handle the extra weight of digital antennas, on top of the analog antennas that are already there.
And that's only the start of the expense items they're looking at. The stations are about to spend millions on equipment in order to broadcast in both modes on separate channels for a few years as viewers trade in their old analog sets for digital ones.
"We're working hard on it," said KCRA-Channel 3's general manager, Greg Kelly. "There are antenna issues for everyone in town. We're already ordering gear."
The four big network affiliates are immediately affected: NBC affiliate Channel 3; CBS affiliate KOVR-Channel 13; ABC affiliate KXTV-Channel 10; and Fox Network's KTXL-Channel 40.
The market's remaining four TV stations have up to five years to make the conversion, under federal deadlines. Stations in the 10 largest markets -- about 35 percent of the national audience -- must change over by this coming fall.
One of the big issues is the "wind load" that broadcasting towers can tolerate. Most of the local towers are in Walnut Grove, south of Sacramento. They sway in the wind, and too much weight could cause them to topple.
"You don't want one of those things falling down, believe me," Kelly said. A 2,000-foot tower goes for about $4 million. So far, Channel 3 hasn't placed its order for a new one.
Channel 10 and Channel 13 are co-owners of a tower that tops out at 2,000 feet above sea level. They have applied to the Federal Aviation Administration to raise it by 49 feet -- just enough room for digital antennas. But the application is waddling like a tortoise.
"We've had the request in now for eight or nine months," said Rod Robinson, Channel 10's chief engineer.
Channel 40 is trying to figure out what to do with its tower. The station leases part of it to public TV station KVIE-Channel 6, said general manager Mike Fisher. He's not sure if Channel 40 can add a digital antenna without overloading it.
The stations will need additional tower space only until analog broadcasting is phased out in 2006, noted Channel 6's chief engineer, Michael Wall. He thinks it might be wise for stations to go into joint ownership of temporary towers until then.
If new towers are needed, however, they must be ordered within the next two to three months, because it takes six to nine months for delivery.
Aside from antennas, other equipment must be bought. There are few bargains to be had on digital equipment, Kelly said, because the conversion is mandated by the Federal Communications Commission. And for an independent station owner like Kelly Broadcasting Co., the prices are going to be steeper than for large chains that can negotiate group rates.
Kelly will say only that the conversion to digital and then high-definition television will cost his company "multiple millions of dollars over a six-year period." Last year, he guessed the conversion costs could go up to $40 million.
Channel 40 -- one of 18 stations owned by Chicago-based Tribune Co. -- probably will spend about $5 million.
"Am I going to get any of that back? I don't know," Fisher said.
Channel 6 has more time -- until 2003 -- to convert to digital at an cost estimated between $3 million and $5 million, said general manager David Hosley. He's hoping federal money will provide about 40 percent of the cost and that the state might help.
Channel 10 engineer Robinson is putting together a $13 million, 10-year conversion plan.
It is getting set to order other digital equipment in the coming months.
"We want the equipment delivered about this time next year," he said.
Channel 10 also figures that high-frequency digital broadcasting will suck up about $300,000 worth of electricity a year. That's a 150 percent leap. Currently, the station pays electricity bills of about $120,000 a year to broadcast.
The equipment Channel 10 is getting ready to buy might not be readily available, judging by what Robinson saw at the recent National Association of Broadcasters conference in Las Vegas, Nev. Digital transmitters seem to be available, but analog-to-digital signal converters are scarce. And, he noted, "no digital TV sets are on the market yet."
Regulators hope that high-definition TV signals are offered during prime-time and special events right from the start. The 2000 Summer Olympics in Sydney, Australia, and possibly upcoming Super Bowls are expected to be among the first global events to be showcased on HDTV, and that could stimulate sales of HDTV sets.
But broadcasters are skeptical. The format won't take hold, they say, until a critical mass of viewers buy digital and HDTV sets. And that makes broadcasters nervous, because they have no idea how long that will take. "Nobody knows how the public is going to embrace this," Kelly notes.
KXTV has been assigned digital channel 61. KOVR will have digital channel 25. KCRA will have channel 35. Until analog signals are closed out in 2006, viewers would select the digital channels as channel 10-1, 13-1 or 3-1.
During the changeover, Kelly said, it will be tricky to figure out ratings, which measure the size of the viewing audience and which, in turn, are a factor in setting advertising rates. Stations will have to combine their analog and digital channel ratings.
Overall, said Channel 3's Kelly, "It's a major capital investment in trying to reinvent an industry."
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