October 25, 2019
Then Again...
TDG's Weekly News Wrap & Commentary
Expectations high for Apple TV+, at least according to Morgan Stanley

Precis – Morgan Stanley  forecasts  that Apple TV+ will generate $9 billion in annual revenue and have 125 million worldwide paid subscribers by 2025. 

TDG –  Now that’s an optimistic forecast! Morgan Stanley assumes that one-in-ten Apple customers in 2025 will subscribe to the service, which is not unreasonable, especially given Apple’s decision to include a 12-month free trial with the purchase of any new Apple device. For some, this will make spending $150 on an Apple TV streaming box a bit less painful. The question, of course, is whether those that enjoy a free trial of the new streaming video service will choose to pay $5/month once that trial expires. A high conversion rate is key to the service’s viability, and the quality of content and experience will be key to conversion. 
ATSC 3.0: The long & winding road

Precis – Though “NextGen TV” will appear in televisions at 2020 CES, advocates admit that it will take at least  five years before broadcasters grow significant revenue , even longer to achieve a ROI. Station owners promised to launch NextGen TV in 61 markets in 2020, though it will take years before infrastructure is fully built out in those markets (think 5G deployments but without the billions in funding). Achieving a national transmission infrastructure will take 10-15 years and cost billions.

TDG – ATSC 3.0 is a long-term game, with sparse and incomplete regional deployments expected during the next five years. Now expand the time frame to 10-15 years, and you can imagine the roadblocks likely to pop up. For one, TV OEMs could lose patience and move on to other new technologies and features. Yes, there are a few OEMs onboard early efforts, but they are a fickle bunch. If sales fail to ramp in a reasonable time frame, they are highly likely to lose enthusiasm as they look for the next "big thing." Second, in the next five years, residential broadband services will top 90% penetration. As such, any IP-based value-added service that ATSC 3.0 delivers will already be available in most US homes. Thus, in the end, the only real differentiator for the technology would be (wait for it) free over-the-air broadcasts, only now in 4K. Then again, given how expensive pay-TV prices will by that time, free 4K broadcasts could prove much more compelling to consumers than it is today.

Such is the path forward for ATSC 3.0, but the road is long and winding, with a number of roadblocks to address.  
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