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How Sinclair Blew the Chance to Change Its Narrative

More bad news from the controversial company obscured what should have been the time to showcase its innovative ways at this week's NAB Show

As public-relations nightmares go, it’s hard to top the one that can’t seem to die down at Sinclair Broadcast Group.

The notoriety of the largest TV station owner in the U.S. went nuclear thanks to a viral video published March 31 that showcased Sinclair’s controversial practice of mandating its anchors read a message suggesting the news media was politically motivated perpetrators of fake news.

While the notion that Sinclair itself has ethical shortcomings isn’t exactly new, the backlash from the video shone a brighter spotlight on the company’s conservative tilt than ever before. Journalism school deans banded together to condemn the company, which also saw some of its own staff publicly criticize their employer’s propagandist proclivities.

It’s only gotten worse this week. As a fresh round of criticism came to greet a series of promos Sinclair issued aggressively defending its anchor-mandated messages, the company’s CEO, David Smith, gave a rare interview to the Guardian in which he acknowledged meeting with President Donald Trump to pitch him on utilizing new technology he was developing. It was another example of the uncomfortably close relationship between the two men as Smith seeks regulatory approval for the acquisition of Tribune Media. Moves Smith has made to sell off select stations in advance of the $3.9 billion deal have drawn fresh FCC scrutiny, The Wall Street Journal reported Tuesday.

That all of this played out in recent days made the NAB Show in Las Vegas this week seem like a bizarro alternate universe. Because while Sinclair loomed large over this annual showcase for broadcasting technology, it’s for an entirely different reason than the one that has kept the company in the headlines recently.

While Sinclair may be widely known as the instigator, the company is cutting a profile in Sin City as more of an innovator, the driving force behind the deployment of a new technology with the potential to save the challenged TV-station business. Too bad that’s been largely overshadowed by all the company’s non-stop contretemps.

The technology in question is known as ATSC 3.0, or Next Gen TV. It represents a quantum leap for the set of standards by which local broadcasters send their signals. Next Gen TV is capable of customizing what different viewers within the same market can see, enabling nifty content like weather reports that vary from neighborhood to neighborhood and revenue-rich targeted advertising opportunities. The new technology can also support multichannel audio, 4K HDR resolution video and beam to a wide range of devices beyond TVs, even those on the move in cars.

Another Next Gen TV attribute is a more sophisticated emergency alert system, a feature that seems to resemble what Smith has admitted in his Guardian interview to talking about with Trump, giving the federal government the ability to broadcast directly to the nation’s cell-phone users.

Think of Next Gen TV as the marriage of OTT (over-the-top streaming) and OTA (over the air free TV), bringing together broadcast and broadband in a way that transforms the traditional one-to-many transmission into a two-way exchange that returns user data more easily measured by the stations. This may be the best opportunity to counteract the rise of platform giants like Google and Facebook, who are feasting on the local and direct response advertisers who also happen to be the station business’ bread and butter.

“It’s going to take a couple of years to find the secret sauce but broadcasters are going to flock to opportunities that represent new and enhanced monetization,” said Mark Aitken, VP of advanced technology at Sinclair, in a panel discussion at NAB on Tuesday.

If there was any one technology that was garnering the most buzz among the grab bag of production tools that are the focus at NAB, it was ATSC 3.0. Sinclair execs like Aitken were everywhere at the confab touting its prospects, from a joint demo with South Korea’s SK Telecom at the Wynn hotel to a “Road to 3.0” exhibit at the Las Vegas Convention Center where NAB was held. Just outside the exhibition hall, Sinclair even sponsored an autonomous shuttle that piped a Next Gen TV signal into this moving vehicle.

But all of that is really window dressing for preliminary Next Gen TV market trials currently under way from Cleveland to Raleigh, North Carolina, where NBC affiliate WRAL supported a live 4K transmission of the Winter Olympics from South Korea in February. In addition, a consortium of 12 stations known as Pearl TV just flipped the switch on a Next Gen TV test run in Phoenix.

Sinclair is also experimenting in a few spots across its vast footprint, including outside Baltimore and in Dallas. The company has clearly been Next Gen TV’s biggest proponent for the past few years, including the formation of a think-tank facility devoted to its development. But even more important is that Sinclair is not alone, having helped attract a wide range of companies necessary to make Next Gen TV work, from consumer electronics giants active in test-bed markets like Samsung, LG and Sony Electronics, as well other media giants like Fox, Univision and NBCUniversal.

But for everything it has going for it, Next Gen TV also faces huge obstacles. For one thing, it’s not backwards compatible, which means the current set of devices in the marketplace are not capable of receiving ATSC 3.0 transmissions. That will require new products embedded with special equipped chips, which, while a good opportunity for manufacturers and big-box retailers to find a new marketing hook to sell 4K TVs, still runs up against the reality that consumers don’t buy new TV sets all that often.

Then there’s the questionable buy-in from a number of other core constituencies: consumer-electronics giants have yet to commit to putting new chips in devices beyond the current experimental phase, advertisers who are notoriously averse to deviating from traditional buying practices, and then there’s the stations themselves, only a fraction of the 2,000 or so currently active in the U.S. have signed on for this. Many are balking at the expenses associated with upgrading their infrastructure.

Sinclair itself has its share of critics who have accused the company of trying to railroad the technology to profit from the patents it possesses, something the latest disclosure of chumminess between Trump and Smith should do nothing to dispel. Some of Sinclair’s critics, however, have their own agenda, like pay-TV distributors who don’t want to help stations reclaim the local ad dollars that pad their own advertising revenues.

As for Sinclair, it’s rumored to have a new streaming venture in the works, which the company is currently planning for under the code name Hummingbird. It’s a reminder that everything the company is doing from M&A to tech development is a response to the tech giants who already eating Sinclair’s lunch. But given it’s likely going to be a number of years before ATSC 3.0 is deployed at mass-market levels, it couldn’t be more urgently needed.

Next Gen TV may be the best hope the company or any other station group has of getting back in the game. That’s a message that might have come through loud and clear during a week when so many other controversies regarding Sinclair weren’t drowning out what could have actually helped improve its reputation.

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