WILL THEY ROPE 'EM WITH DIGITAL IN DALLAS?
Big Tex, the world's only 52-foot-tall, talking-and-waving cowboy, wasn't the only larger-than-life attraction at this fall's Texas State Fair. In addition, Dallas television station WFAA managed to captivate fairgoers with a preview of the lushly detailed high-definition images that it will begin broadcasting on Nov. 1.
Indeed, many TV-station-owners wonder whether HDTV is nothing more than a wildly expensive carnival attraction--requiring millions of dollars of new equipment for broadcasters and new TV sets on the part of consumers. Some broadcasters across the country are scrounging around for other uses for the digitized airwaves.
Not WFAA-owner A.H. Belo Corp. Dallas-based Belo is betting big that high-definition TV will help it lasso more viewers, as people begin buyIng the sleek new sets. The company has earmarked $137 million to convert its 17 stations, which stretch from Honolulu to Norfolk, Va., by 2003. Through its affiliation with ABC, WFAA's first high-definition broadcasts will consist mainly of movies and sports.
NOSE FOR NEWS. But Belo executives arecounting on this programming to keep viewers tuned to his channels and even to boost viewership of what really matters to Belo's bottom line: top-rated local newscasts. News programs make up about 20% of WFAA's lineup, yet they bring in 45% to 50% of all revenues, and an even higher percentage of profits. Belo's stations reported earnings of $48 million, on revenues of $163 million, in the quarter ended June 30. The higher the station's audience ratings, the better it does in Dallas' $500-million-a-year TV-advertising market. ''We really believe the high-quality product will win out,'' says Ward L. Huey Sr., president of Belo's broadcast division.
Fellow station-owners don't all share Huey's zeal for HDTV. (Even so, all of the country's 1,576 stations will be required to convert to digital broadcasting in the course of the coming decade.) Among the skeptics is Baltimore's Sinclair Broadcast Group, which owns or programs 56 stations. Instead of using the airwaves allocated by Washington for high-definition broadcasts, it plans to transmit more standard-definition TV. Once they are digitized, as many as six regular channels can be compressed into the same space as a high-definition television signal. That opens up the possibility of broadcasting popular shows in multiple time slots, carrying new channels, or using spectrum for other services, such as paging.
Why no HDTV? Sinclair serves mostly midsize markets and doesn't share Belo's news focus. Plus, the smaller the market, the longer it will take for sales of HDTVs to justify broadcasting in the jazzy format. Even those who are bullish on high-definition don't expect to air it all day. In fact, broadcasters may also choose to transmit high-definition images that are not of the highest clarity (low-high definition, if you will), conserving spectrum for other uses. ''The way we're looking at the digital spectrum is: We've got a commodity that we think lots of uses are going to develop for,'' says Dennis J. FitzSimons, president of Tribune Broadcasting Co., which owns 18 stations. ''We think there's ultimately a lot of value out there.''
HEAVY ON JUICE. The payoff won't come in the short term, however. WFAA need look no further than its own half-finished digital control room to realize that there is a complicated scramble going on. With its HDTV launch just days away, WFAA has yet to install more than half the equipment it needs--including a master control switch and a studio-to-transmitter link. ''Debugging will happen on the air,'' says Bob Turner, Belo's vice-president for engineering.
There's also the expense of maintaining both an analog and digital channel. All but one of Belo's 17 new digital frequencies are UHF--and a UHF signal consumes $30,000 a month in electricity, compared with $1,000 for VHF. For big markets such as Dallas, analysts think the added cost of HDTV is worth it. Says William Myers of BancBoston Robertson Stephens: ''There's no direct economic return, but it enhances the quality of their overall product.''
It's no wonder, though, that Belo has tried to hasten the acceptance of HDTV with public demonstrations. The broadcaster can only hope that, by next year, high-definition TV will be so enticing that some Texans will skip the State Fair and stay home to watch it.
By Steven V. Brull in Dallas
Updated Oct. 15, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.