Television Broadcasters'adoption of Digital

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Television Broadcasters'adoption of Digital TELEVISION BROADCASTERS’ ADOPTION OF DIGITAL MULTICAST AND ANCILLARY SERVICES: AN ANALYSIS OF THE PRIMARY CORE, SUPPORTING, AND ENVIRONMENTAL DRIVERS By TODD ANDREW HOLMES A THESIS PRESENTED TO THE GRADUATE SCHOOL OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS IN MASS COMMUNICATION UNIVERSITY OF FLORIDA 2008 1 © 2008 Todd Andrew Holmes 2 To all who have inspired my intellectual curiosity and academic pursuits, and to all who have supported me in reaching this milestone 3 ACKNOWLEDGMENTS First and foremost, I would like to thank my chair, Dr. Ostroff, for the enormous amount of time and guidance he gave to me in helping me to complete this research study. His support and direction were absolutely critical in the successful completion of this paper. I also would like to thank the members of my committee, Dr. Chan-Olmsted and Dr. Brown, for their thoughts and ideas concerning my research topic. Second, I would like to thank the nine television executives who took time out of their busy schedules to meet with me and who very openly and willingly shared with me their thoughts on the research topic. Their help was absolutely vital to the completion of this study. Third, I would like to thank my parents who continued to keep me moving along on the thesis through their inquiries and encouragement. Their own academic achievements have continued to inspire me throughout this process. Lastly, special thanks go to all my friends, the Gator Guzzlers and many others, who heard me talk about this thesis for months and with whom I had to skip out on a lot of activities. I appreciate their understanding and their always entertaining comments regarding this research study. 4 TABLE OF CONTENTS page ACKNOWLEDGMENTS ...............................................................................................................4 LIST OF TABLES.........................................................................................................................10 LIST OF FIGURES .......................................................................................................................12 ABSTRACT...................................................................................................................................13 CHAPTER 1 INTRODUCTION ..................................................................................................................14 Digital Television Rollout is Far Reaching ............................................................................14 Broadcasters Face Competition from Various Sources..........................................................15 Origins of Digital Television..................................................................................................16 Early High-Definition Broadcasts ..........................................................................................18 Consumer Adoption of Digital Television Technology .........................................................19 Comparison of Adoption of High-Definition TV to That of Color TV ..........................20 Consumer Adoption of Interactive Services....................................................................21 High-Definition Gains Momentum.........................................................................................22 Consumer Education...............................................................................................................22 Current Figures on Consumer Understanding of Digital TV ..........................................22 Consumers Not Very Familiar with Interactive TV........................................................23 Voluntary Actions to Increase Awareness ......................................................................24 Public Safety Concerns...........................................................................................................25 First Responders Need Analog Spectrum........................................................................25 Over-the-air Television Critical During Emergencies ....................................................26 New Digital Technologies Enhance Consumer Safety ...................................................27 Purpose and Value of This Research......................................................................................27 Conclusion ..............................................................................................................................29 2 LITERATURE REVIEW .......................................................................................................30 Proposed Framework of New Media Adoption by Media Firms ...........................................32 Core Factors.....................................................................................................................32 Firm characteristics ..................................................................................................32 Media technology characteristics .............................................................................35 Supporting Factors...........................................................................................................38 Strategic networks ....................................................................................................38 Perceived strategic value..........................................................................................39 Managerial knowledge of and incentives to seek alternatives .................................39 Environmental Factors.....................................................................................................39 New Media Technology Adoption ..................................................................................40 Social Movement Theory .......................................................................................................41 5 Broadcasters and Their Entry into the Digital Age ................................................................43 Regulation/Federal Communications Commission Rulings...................................................44 Three Key Recommendations of the U.S. General Accounting Office ..........................45 Mandate for all TV sets to be digital over-the-air compatible and digital cable- ready .....................................................................................................................46 Certain date for cable carriage to switch from analog to digital ..............................47 Debate Over Dual Carriage by Cable Systems................................................................49 Broadcasters and Cable Industry Square Off on Issue of Multicasting...........................49 Broadcasters’ viewpoint...........................................................................................49 Cable operators’ stance ............................................................................................51 Broadcasters Denied Carriage of Multicast Channels.....................................................54 Lack of Public Interest Programming..............................................................................55 Coalition of Consumer Activists Enter Debate ...............................................................55 Retransmission Consent and the 1992 Cable Act............................................................56 Major Network Digital Initiatives ..........................................................................................57 National Broadcasting Company (NBC).........................................................................57 American Broadcasting Company (ABC).......................................................................58 ABC AccuWeather...................................................................................................58 ABC News Now.......................................................................................................59 Columbia Broadcasting System (CBS) ...........................................................................60 Fox Broadcasting Company, The CW Television Network, and My Network TV........62 Specialty Digital Networks.....................................................................................................63 Qubo Network .................................................................................................................63 LATV Network ...............................................................................................................63 Motor Trend TV ..............................................................................................................63 World Championship Sports Network ............................................................................64 Multicast (Standard-Definition) Business Model...................................................................64 Model of Program Choice ...............................................................................................64 Dual Carriage in a Multicast Environment......................................................................65 Advantages of Multicasting.............................................................................................66 Improved affiliate/network relations: Complementarity..........................................66 Creation of new national networks: Newness ..........................................................66 Ability to target advertising to particular
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