Las Vegas: It is surely no coincidence that the Eurythmics song Sweet Dreams (Are Made of This) and Bruce Springsteen’s Waiting on a Sunny Day greeted attendees of the opening address at the 2003 National Association of Broadcasters convention. Both songs reflect an optimism that good times lie ahead for the U.S. broadcast industry – and, by extension, Canada’s as well – if each sector does its part.

NAB reports widespread adoption of digital television in the past year. Twelve months ago, 225 U.S. stations had turned on their digital signals; the number is now 809, and NAB chair and CEO Edward Fritts forecasts that it will soon break 1,000. This is particularly pertinent to Canadian broadcasters, which have been playing a wait-and-see game with their American counterparts and will soon have to deal with competitors sending high-definition signals that can be received in Canadian homes.

Fritts went on to applaud U.S. broadcasters, which have doubled their offerings of HD programming in the past year. More than half of the three major U.S. nets’ primetime shows are currently available in HD.

Undoubtedly a major factor in the progress of DTV in the U.S. is government regulation of the major players. Broadcasters have had the 2006 switchover deadline hanging over their heads for years now, and, as of last August, the regulator has laid out a timetable for manufacturers to ensure HD capability of their TV sets.

The one remaining sector that needs to be brought on board is cable. Broadcasters want cable to carry dual signals – both digital and analog – throughout the switchover, with the purpose of advancing digital technology while providing protection for the millions of homes presently equipped with analog sets. But the cable carriers will only provide HD programming when they see it as profitable.

Only 13% of DTV stations are getting carriage, said Fritts, adding that it is high time cable is put under mandate to carry digital signals. The packed house chimed in with loud applause.

What is so evident at NAB is that digital technology has outpaced the marketplace. There are seemingly endless rows of booths where companies show off their cutting-edge digital production, post, broadcast, satellite and new media innovations, but unfortunately in many cases the broadcast industry has yet to find a way to make these applications profitable.

The NAB2003 launch took on a predictably patriotic flavor, as a thunderous rendition of the U.S. national anthem played over a montage of symbolic American images, followed by a prayer for ‘an end to all wars and conflicts’ and Fritts commending broadcasters for their coverage of the War on Iraq, citing the 600 ’embedded’ U.S. reporters.

Fritts – taking the stage ahead of keynote speaker Barry Diller – called TV the medium of choice for public information and acknowledged the networks foregoing of millions of dollars in revenues in their war coverage.

The thorny issue of deregulation is currently top of mind in the U.S. industry. Wall Street is forecasting increased value of broadcast company stocks, based in part on the Federal Communications Commission’s upcoming bi-annual review, in which it is expected to loosen media ownership rules. NAB supports a rule whereby two competing small-market stations with market shares under 10 could merge and share resources.

The FCC is also likely to reconsider the ownership cap that restricts the major nets from owning more than 35% of U.S. TV stations nationwide. There could be additional revisions to local newspaper-broadcast cross-ownership restrictions.

NAB and the FCC are working closely for what they call ‘reasonable and moderate deregulation,’ although many fear that competition within broadcasting will take a hit as a result and soon only a few independent voices will be heard across the country. In fact, keynote speaker Diller, recently resigned head of Vivendi Universal and chair and CEO of USA Interactive, countered NAB and FCC by commenting, ‘We need more regulation, not less.’

Diller questioned the widely held belief that consolidation is the only model for media companies in the current climate. Instead of a handful of vertically integrated monoliths striving for world media dominance, he suggested the public good is better served by diversity, localism and competition. He also expressed his concern that these monolithic companies (which, north of the border, could include the likes of CanWest Global, Bell Globemedia and Alliance Atlantis) find themselves on both ends of every business transaction and yet no one is complaining too loudly.

Meanwhile, the immense trade show floors at the Las Vegas Convention Center, which earn NAB the nickname ‘the world’s largest electronic media show,’ were packed with exhibitors and attendees. This speaks optimistically of the plight of manufacturers and broadcasters as well as the relevance of the convention itself. People returned to the desert oasis for NAB2003 in droves, despite some anxiety that the war would have a negative impact on attendance. Organizers expect the trade show to equal last year’s 92,000 attendees.

-www.nab.org