THE DIGITALTRANSITION

IMPLICATIONS FOR ADVERTISERS

Television broadcasting is entering a whole new era, and advertisers need to be prepared now.

• On February 17, 2009, analog television transmissions will end. Broadcasters will be required to transmit exclusively in digital.

• Networks will accept commercials in only one format. Advertisers will have to choose to ship either a High Definition (HD) or Standard Definition (SD) format. Some networks already have this requirement.

• The choice of formats will have financial and creative implications for advertisers.

The digital transition could be the biggest change in the industry since the transition from black and white to color television.

The following is intended to provide background and guidance to help advertisers make decisions now as the digital transition approaches.

THE BASICS

What’s the Difference Between Analog and Digital?

Analog is the original standard for TV transmission. Think of analog as a fluctuating wave, much like a radio signal. The signal is subject to interference and it takes up a lot of room within its assigned channel space, thereby restricting picture and audio quality.

Digital Television (DTV) is data transmission which takes up less space within its assigned channel. The benefits to advertisers and broadcasters are higher-quality images, better audio, and additional signal capacity supporting multiple formats (audio, video and text).

Are Digital TV and High Definition the Same Thing?

No. DTV is a mode of transmission. High Definition is just one format that can be broadcast via DTV. In other words, digital transmission simply makes it possible for broadcasters to send out HD programming and run HD commercials.

It is important to note that the transition to digital does not require programs to be broadcast in high definition. Stations can, and will, continue to send out standard definition digital programming, although HD will be much more prevalent.

: “It’s also important to note that the digital transmission requirement applies to broadcast stations only, not cable operators. Cable companies that prefer to do so will be allowed to continue to deliver programs and commercials in analog.”

There are great answers at this web site on the conversion to digital broadcasts. http://www.dtvanswers.com/dtv_affected.html

What’s the Difference Between SD and HD?
Fundamentally, Standard Definition television sets have 480 lines of video resolution and an aspect ratio of 4:3. High Definition television sets have either 720 or 1080 lines of resolution within a wide screen aspect ratio of 16:9. The higher resolution of HD gives approximately 6 times more picture detail than an SD image.

Here is a sample of the graphics being used by Level 3 Vyvx Services in regards to resolutions and frame sizes.

Examples of pillarbox and fit-to fill up conversions from SD to HD:

Examples of center cut and letterbox HD down conversions to SD:

Why Are We Switching to Digital Transmission?

The primary benefit cited by Federal regulators is that digital transmission will free up space for public safety purposes, such as police and fire communications. It will also free up space for more advanced consumer wireless services, such as wireless broadband, which the government will make available via auction.

Broadcasters will benefit by being able to transmit multiple services—including simultaneous programs and enhanced data services, such as current weather and emergency information.

What’s the Penetration of HD Televisions?

Forrester Research estimates that 46 million U.S. households will have HD televisions at year-end 2008, increasing to 55 million at year-end 2009. However, Forrester estimates that only about 55% of people with HD televisions have upgraded their cable or satellite service to receive HD signals. There are currently about 113 million U.S. households.

IMPACT ON ADVERTISERS

Commercial Distribution

Currently, most networks accept both HD and SD commercial masters. They often transmit both versions simultaneously.

After the transition, the networks will accept just one version. In fact, CBS is already accepting just one version and other networks are expected to follow by the start of the fall season or even sooner. Many cable networks will do the same–ESPN is already doing so. The advertiser may submit either HD or SD. The advertiser must choose.

CBS in still accepting content in both SD and HD. If you are submitting HD content to CBS, it is recommended that any text or critical content be center cut protected or it will be truncated when the HD content is viewed on the simulcast SD channel.

Best Practice: Confirm with your media partners the specific requirements each has for commercial submissions.

What Will High Definition Commercials Look Like on Your TV?

HD programming–including commercials–is transmitted in the 16:9 wide screen format. If a viewer has a 16:9 television, HD programming will fill the entire screen. Meanwhile, Standard Definition television sets are 4:3, a narrower screen size than HD.

The SD screen isn’t wide enough to display full HD content (i.e., programming as well as commercials). So when HD content is viewed on SD televisions, it will usually be “down converted” –cropped on the left and right sides in order to fit the 4:3 screen. This means viewers will mostly see information contained in the center portion of the HD content.

This is a 16:9 picture in a 4:3 screen.

The above illustration shows what happens when a 16:9 HD image is down converted and viewed on a 4:3 SD television. : “The 16:9 HD image can also be letterboxed. This means that viewers will see the full 16:9 image, but bars are added at the top and bottom of the frame.” Show an example (you can use the Vyvx picture).

Some ANA members have reported to the association that the left and right sides of their HD commercials have already been cropped off in some instances. CBS did a survey of 800 HD spots and found that 6% of them cropped off vital information on the left and right sides of the commercials. While 94% may initially appear to be a high success rate, in this case almost 50 commercials were negatively impacted. Below is an example.

This is why advertisers producing in HD need to make sure that all essential information—including character action, logos, titles and legal disclaimers—resides in the center portion of the frame. This is called center-cut protection. By placing important information in the center part of the frame, you will ensure that nothing vital is lost when your HD commercials are viewed on SD sets, as in the example below.

Best Practice: Be sure to discuss center-cut protection with your agency early in the creative process. The need for center-cut protection will impact all aspects of production from concepts and storyboards to camera framing, graphics, titles, and special effects.

How Will SD Commercials Look on HDTVs?

In order to fit 4:3 SD images into 16:9 HDTVs, the network will “up-convert” those commercials. This process will place the image in the center of 16:9 sets. No information will be lost, but “pillars” will be placed on the sides. See below.

This is a 4:3 picture in a 16:9 screen.

In some cases networks may even place their own logos or other information within the pillars.

Further, instead of pillars, some networks may stretch 4:3 images to fill 16:9 screens. Depending upon the image, this stretching may impact the look of the picture.

Note: After the transition, standard definition commercials will still fill the entire screen of 4:3 SD television sets. Keep in mind that while HD penetration is expected to increase rapidly, many of those HD households will continue to have secondary 4:3 sets – in bedrooms, guest rooms, kitchens, etc. – and such sets are likely to be around for years.

Considerations for Finishing in HD

1. The cost for editing and finishing in HD is higher than SD, regardless of the medium used to shoot the commercial. According to the Association of Independent Creative Editors (AICE) the cost of editing and finishing in HD (rather than SD) is approximately 10-15% higher – or about $5000-7500 for an average commercial.

“The cost for converting SD spots to HD, while not significant, should be weighed in your decision. So is the quality of the picture, which will remain at the SD level.”

2. Spots with CGI (computer generated imagery) and digital effects may cost substantially more to create in HD, due to longer rendering times.

Best Practice: Consider making an HD master from which other versions can be created. These might include versions for overseas use, down conversion to SD 4:3,or to any alternative media delivery format (e.g., Internet, cell phones, etc.) at any resolution format.

3. The cost for duplicating and trafficking HD spots is higher than SD—approximately 4X higher according to DG FastChannel, for physical delivery of tapes (actual dollars depend upon the media schedule).  As acceptance of electronic delivery of HD tapes increase, those costs will decrease slightly, but will still be higher than SD. Advertisers are increasingly finishing commercials in HD, and more consumers are capable of viewing HDTV. As HD expands, SD spots run the risk of appearing inferior because of:

• lower resolution
• the fact that they won’t fill 16:9 screens and may be subject to pillars or stretching

4. Ad-ID is the web-based system that generates a unique identifying code for each advertising asset. Ad-ID has been upgraded to include a new high definition code capability. The code for a high definition commercial will contain an H in the 12 th character while all standard definition commercial codes will be 11 characters.

Considerations for Finishing in SD

Reasons an advertiser might chose to finish in SD rather than HD include:

• If an advertiser cannot afford the increased costs for HD editing, finishing and trafficking noted above.
• The media buy does not include HD channels or programming.

BEST PRACTICE SUMMARY

• Confirm with your media partners the specific requirements each has for commercial submissions.
• Be sure to discuss center-cut protection with your agency early in the creative process. The need for center-cut protection will impact all aspects of production from concepts and storyboards to camera framing, graphics, titles, and special effects.
• Consider making an HD master the universal master from which other versions can be created.

Acknowledgements

The ANA Production Management Committee has received valuable input from various stakeholders on this digital transition white paper and wants to recognize the following organizations:

AAAA (American Association of Advertising Agencies), ABC/ESPN, Advertising Production Resources, AICE (Association of Independent Creative Editors), Bird Bonette Stauderman, CBS, DG FastChannel, MRA, and NBC.

3/24/08