I don't think anyone can predict how things with the big 4 networks are going to shake out since there's a lot of uncertainty about the future. The networks will keep making the local affiliates pay more money, the local affiliates will keep making the cable/satellite/streaming operators pay more money, and the cable/satellite/streaming operators will keep charging customers more and more for locals.
Every dollar the rates go up, the more the "hassle" of putting up an antenna becomes worth it to consumers. ATSC 3.0 has features that may allow people who currently can't get OTA to get it in a few years. It uses OFDM modulation which is much better at resisting multipath interference, and single frequency networks - if affiliates actually implement them - will make it easier for people in places that have poor/no reception to get great reception.
My only question is - what's the incentive for local stations to go to the expense of implementing single frequency networks...they talk about it a lot but it seems like a net loss for them. They spend money so that more people can pick up their signal for free, instead of paying for it through an MVPD who then pays the local station.
Another factor is whether streaming MVPDs will do like Sling and make it easy to integrate OTA so people who don't want to pay for local stations and can't get them through the streamer of their choice can put an antenna.
Like I said, a lot of uncertainty... If I owned a local station group the only SFNs I'd approve would be to replace translators, but I wouldn't want to improve coverage at all. And I'd make damn sure that when I negotiated with MVPDs that I required them to pay me based on their total number of subscribers, not their total number of subscribers who have a package including locals - to prevent them from letting people save money by dropping locals and using an antenna. Those seem like obvious business decisions, but who knows maybe there's something I'm missing.
Yes, good points. I've read (and posted) a lot about ATSC 3.0 over the past few years. And I've gone from being excited/hopeful about the technological advances that ATSC 3.0 will bring (free 4K HDR content; improved reception in homes; free OTA TV on mobile phones; interactivity via an internet-based return path) to being increasingly skeptical (or at least uncertain) about the future of free OTA TV, and the longstanding network/affiliate model, from a business perspective.
Because, as you say, what incentive is there really for local broadcasters to improve the quality and ease of reception of their signals, since that would only encourage more cord-cutting and thereby reduce the amount of retransmission money they get paid by MVPDs? And yet many of the biggest broadcast groups, including Sinclair and Nexstar, seem quite gung-ho on 3.0. Why?
Apparently they think that the benefits outweigh the risks. I think that they see more and more US consumers dropping MVPDs and going to streaming services, which could potentially harm their retrans compensation due to reduced subscriber numbers. They also see that their network partners are embracing their own paid streaming services -- Hulu and CBS All Access -- as online homes for their content, largely cutting the local network affiliates out of the picture. So if retrans comp is going to eventually trend downward (although, so far, it's only been going up, as rate increases offset declines in subscriber numbers), local broadcasters figure that they can make up for that with more ad money (along with using their 3.0 spectrum for businesses other than free TV, such as IoT datacasting and various subscription services).
They figure they'll get more ad money in two ways with 3.0: through greater OTA viewership (thanks to improved signals, as well as viewing on phones) and through internet-delivered targeted ads, which fetch higher rates from advertisers. To me, embracing 3.0 looks like local broadcasters saying "We can't sit by while video increasingly shifts to online apps, away from us. We have to take our futures into our own hands, regardless of what our network partners do." And, frankly, support for 3.0 among the networks (who, of course, do own a lot of their affiliates in large markets) has been between lukewarm and non-existent. As I say, it's been the large non-network broadcast groups (Sinclair, Nexstar, Scripps, etc.) who loudly promote 3.0.
So let's say that 3.0 is as good as its promoters say it will be. (And the real-world technical tests so far are promising.) With retrans fees continuing to rise, while 3.0 makes it easier than ever to get high-quality TV from ABC, NBC, CBS and Fox for FREE (with better picture quality than you might get from cable, satellite, etc.), then surely that would only add fuel to the cord-cutter fire. As you mentioned, yes, MVPDs could begin optionally offering STBs based on Android TV (or other platforms) that can integrate free OTA TV alongside their own pay TV in a unified program guide/DVR, thereby letting the MVPD drop that $8 "broadcast fee" from your bill. Sinclair, Nexstar, etc. may be OK with that, given their increased ad revenue and other 3.0-related revenue streams, but I don't see the networks being happy about it. Because a big chunk of that retrans money get passed from the local affiliates back to the networks in exchange for the right to air their content. And that amount would eventually go down as cord-cutting goes up. (At some point, increasing per-sub retrans rates will result in less, not more, total retrans money as higher fees only encourage more cord-cutting.)
So then you're in a situation where both sides -- the networks with their OTT services like Hulu; and the local affiliates with ATSC 3.0 -- are making strategic moves that undermine the other. And look at other developments we're seeing among local broadcasters. It's very common for them to put the local news content that they own online for free (with ads) through their own apps and/or third-party apps that aggregate news from lots of stations. We're also seeing large broadcast groups developing national content to be shared among their stations, in effect acting like their own network. And news just came out that Sinclair is taking their own national content production to the point where they're going to launch their own OTT service that will feature news/opinion (right-wing competition for Fox News), plus series and movies.
In the end, I believe that pretty much all content is going to be delivered OTT direct from the content owner to the consumer. And that ultimately means a breakdown in the very old national network/local OTA broadcaster model. I think you're going to see Disney pulling back more and more of their content spending from ABC and toward Hulu and their forthcoming Disney-branded OTT service. Likewise with CBS and their Showtime and CBS All Access services. (Also, midsized CBS Corp. is ripe for getting acquired by one of the FAANG tech giants and/or merging with another midsize media player like Lionsgate or Sony.) Fox is basically getting out of the expensive content game, selling their film and TV production arms to Disney, and they'll focus their Fox network more on cheap-to-produce news, talk, reality, and game show stuff, plus sports (which, due to their popularity and live-broadcast nature, are increasingly what's keeping broadcast TV afloat). It's rumored that NBC wants to launch their own OTT streaming service and I suspect that they'll sell off their 30% stake in Hulu once Disney becomes the majority owner. So NBC will have an entertainment service that competes against Hulu and CBS All Access, which they'll offer nationwide OTT and probably seek to bundle in with their Xfinity cable TV packages. What happens to the major sports broadcast contracts is the ultimate question, because the fate of not just broadcast networks, but linear TV channels in general, largely rests there.
