BIA/Kelsey forecasts that by 2013, over-the-top homes will exceed the number of cable homes.

“Over The Top” video refers to a group of Internet-based technologies and business models that provide linear and nonlinear television services over a third party’s bandwidth to connected television sets.This includes both free (ad-supported) and pay (subscription, video on demand, etc.).

For example, a new Sony Bravia set can be connected to Verizon’s FiOS Internet service to get to the Roku Channel Store for on-demand viewing of broadcast network news — all without subscribing to the basic or premium FiOS TV service. Similarly, Hulu provides access to prime-time network programs.

Companies interested in local broadcasting need to pay attention to the trend as it is on a fast trajectory and will have an impact on local television station business models.

Everyone is fighting for a better, more cost-efficient way of producing content for Web sites. But is the so-called “content mill” search optimized approach of a Demand Media, Associated Content or Examiner.com the only way to achieve this?

Whether you agree or disagree with the characterization of these companies (we largely disagree), alternatives are out there. One alternative is presented by Helium, a 29-person, Boston-based firm that brings in text articles from 160,000 writers and editors, filters content via peer review to let the best voices rise to the top, and allows media partners to generally choose from multiple entries for the best fit.

Helium was founded in October 2006 and has received $16 million in Series A funding. Most interesting to us, it is also 20 percent owned by mega publisher RR Donnelly. Indeed, RRD, with 1,200 sales reps, is its principal reseller to local media clients including TV stations, radio stations, newspapers, Yellow Pages and Web pure plays.

Using Helium, media partners can personalize the content for their own purposes.

One TV company we recently talked with said it liked Helium’s approach more than the others because it had confidence in the quality of the articles since they are refereed, and it is able to let local reporters add their own touches to pieces that run on its Web sites. It isn’t so much about using outside content as “letting the company’s talent do more,” it said.

This company would be among Helium’s pay-by-the-article customers. The cost can range anywhere from $30 to $50 for general interest content, to up to $1,000 for a high-end medical specialty piece. There are also monthly plans. The company’s content is also distributed on its own ad-supported Web site, which receives 9 million page views per month, growing 5 percent to 7 percent per month.

CEO Mark Ranalli tells us that writers are paid on an algorithm based on a portion of ad revenues. The payment scheme is similar to that of Demand Media, Examiner.com or Associated Content. “Many, many writers receive from $5,000 to $10,000 a year,” he says — enough to be a good source of supplemental income. But that also does not differentiate the company. The difference, he contends, is that the content may be “reviewed better than professionally written material.”

“We are not oblivious to what the search engines are doing,” says Ranalli. “You want to be on Google at the end of the day.” And the other content creators may have been perfectly optimized for Google. But instead of producing articles specifically to top the search engine, Helium is bent on producing the best article. “That’s perfectly aligned with Google,” which really just wants to highlight the best content, he says.

Some speculation (and new details) about Apple’s pending and well-expected reboot of Apple TV found its way last week into The New York Times just before the holiday break. My guess is that the new and obvious name will be iTV and the functionality will mimic other Apple devices running its OS — iPod Touch, iPhone, iBook and iPad.

The time is certainly right for someone to make sense of the TV, which is perhaps the most important information and entertainment device. Just imagine if the next version of Apple TV (a.k.a. the first version of iTV) offered the consumer a user interface as simple and elegant as the iPhone. The iPhone would function as the remote, and we’d do away with the current morass of clickers and remotes that dot the living room landscape.

Of course, Google is not going to sit idle and watch this happen. It is pushing its own Android-like model to counter the much anticipated reboot of Apple TV working with Sony and Intel — two of the most important names in consumer electronics.

And then there’s Microsoft. It would probably like to forget its 1997 acquisition of WebTV for several hundred million dollars. That was 13 years ago — and to date consumers have seen little evidence of the potential of IPTV. Rather, most of us just sit and hope and pray that someone will come along and make the process of watching TV as intuitive and pleasurable as it is to buy and listen to music on iTunes.

Today we announced our revised forecast for the television industry. Previously we had been somewhat more conservative in our estimates because it was difficult to read which way the economic winds were blowing. And while the first half of this year showed that the winds were moving in the industry’s favor, we also feel that in the second part of the year the sails will be let down for good, but equal, third and fourth quarters similar to those in 2009.

Our estimated $18.1 billion in income is a 10.9 percent increase compared with last year’s $16.3 billion. We think there are a few contributors to this respectable gain. First, there is a growing swing in advertisers returning to television, as evidenced in a recent story in Advertising Age and a point that we’ve often made at BIA/Kelsey that you still can’t deny the large amount of people you can reach with a local television station ad, despite DVRs, the Internet and other distractions.

Second and equally important, we have seen a pattern of advertising growth in non-election even-numbered years going back a decade, as evidenced in the below chart. Notably, in the years coming off a recession the industry picked up double-digit increases. Arguably, it’s easy to say that there’s nowhere to go but up after a negative year. However, we note that with consistency the industry always seems to be rediscovered after the times are bad, and we don’t see that changing anytime soon.

Our predictions for the half of the next decade remain positive and upward. Television remains poised as part of the invaluable media ecosystem; we’re always happy to report that.

Will the iPhone soon be able to not only receive FM and HD Radio stations but also provide an electronic program guide? Apple Insider reported on a patent filing (”Digital Radio Tagging Using an RF Tuner Accessory”) this week. The filing notes that “enhanced metadata and searching can provide the listener the ability to refine station choices without having to listen at length to any particular station . . .” Sounds like a simple electronic program guide. The key listener benefit of such a system is the ability to discover more easily the stations and programming they want to hear. Video systems offer this service but broadcast radio never has.

BIA/Kelsey, along with Broadcast Signal Lab and Unique Interactive, received support from NAB FASTROAD to design, develop and field test an Electronic Program Guide solution for HD Radio. For the full details see the EPG reports at www.nabfastroad.org.We developed a fuller featured EPG and field tested it in the adjacent Boston, MA – Worcester, MA – Providence, RI, markets to really put the system through its paces of identifying and displaying in devices equipped with the EPG client, what’s on local radio.

What does this have to do with iPhones?

Well, we know that the 3G iPhone includes a chip with FM tuning capability based on an analysis of the bill of materials by iSuppli. However, without an adequate FM antenna and software to run the FM radio, it’s an incomplete solution. Apple has added full FM and HD Radio capabilities to the iPod Nano and accessory devices.

The soon-to-be-released 4G iPhones and iPads and their successors may one day see activated FM/HD Radio as a feature set. We certainly see that Apple is rounding out the software suite.

Of course, local radio station broadcasters would love to see Apple’s iPhones and iPads all have the ability to receive and add value to the over-the-air listening experience. At Digital Strategies for Broadcasting 2010, Emmis CEO Jeff Smulyan spoke not only to the urgency of having FM radio on cellphones. Local radio stations on cellphones not only add value, but can also be a safety matter since they provide Emergency Alert System alerts and warnings. Click here for the video of Smulyan’s keynote on this topic.

OTTcon East focuses on the emerging “over the top,” or OTT, distribution channel of providing television and video service packages over broadband connections to TV sets rather than over cable, satellite or telco subscription services. The so-called “cord cutters” are a younger demographic which do not subscribe and may never have subscribed to cable services and get their video online via streaming services such as Netflix, Hulu or directly from network television and other content providers.

The technology is maturing quickly but the business and content licensing models are still evolving. There is very little awareness, let alone activity, at the local media level in the OTT segment. However, the value local content, brands and sales resources that local media can bring to the OTT party has significant upside as part of an overall business strategy.

Local media companies can partner with firms already active in the OTT services provision space. That means mostly cable (e.g., TV Everywhere) or telco initiative such as those led by AT&T U-verse and Verizon FiOS. Or in the case of local broadcasters, they can bring the same kind of collaborative interplay among ecosystem players going on with the Mobile DTV initiative and extend this beyond the mobile platform to other platforms and devices.

Actually, this is pretty critical to the future of local media. The service models of the not-too-distant future will involve services portability across networks and devices. This is being driven by the vision and needs of national and global players at the moment. Local media need to become part of the process to protect and extend their revenue models.

DataSphere, which creates hyperlocal blogs and sells advertising packages to small businesses on behalf of local broadcasters, will now do the same for Gannett Broadcasting.

The deal initially covers 10 of Gannett Broadcasting’s 19 markets, including Atlanta; Washington, D.C.; Tampa; Buffalo; Sacramento; Grand Rapids; Little Rock; Portland, ME; and Macon, GA. Gannett is keeping the DataSphere arrangement separate from Ripple6, its social media marketing unit, which was recently merged with PointRoll, Gannett’s rich media services company.

Seattle-based DataSphere, which received $10.8 million in funding and is partially owned by Fisher Communications, now has deals with at least five media companies and powers more than 300 local news sites. Among its media partners are Fisher, Raycom Media, Local TV and Hubbard Broadcasting. More than 1,000 SMBs are served by the Fisher sites in Seattle, Portland and Boise. The service had also been tested out on a limited basis by Cowles.

Perhaps the most controversial part of the FCC’s recent National Broadband Plan (NBP) was the possible reclaiming of 120 MHz of spectrum presently being used by local over-the-air television stations. In the NBP the FCC suggests that some broadcasters may voluntarily turn back their spectrum, “hook up” with another local broadcaster and co-locate at that facility, and share in some of the auction proceeds that the auction of their old spectrum would generate. The FCC hopes that enough broadcasters voluntarily participate in this program to lead to this spectrum being used for broadband deployment.

Broadcasters are concerned about this proposal for fear that it will not just be voluntary participation. They expect that if the FCC does not get enough volunteers it will later take possession of this spectrum and force broadcasters to share facilities. This concern as well as other issues related to this part of the NBP was center stage during an extremely lively debate at the 6th Annual Broadcast Policy Summit, with David Donovan of the Association of Maximum Service Television representing the broadcast industry and Christopher Guttman-McCabe of CTIA-The Wireless Association representing the other side.

One of the central points that Mr. McCabe made during the debate was whether the use of the spectrum by local television stations was efficient. He cited the fact that many channels go unused in many markets unlike the wireless system where every part of the spectrum is reused in all markets. Mr. Donovan did not disagree with the fact that channels in markets are not allocated but pointed out that is necessary due to the interference that would be caused if all channels in all broadcast markets are used. The system of broadcasting in the U.S. was established for many local facilities to broadcast over wide areas, hence the need for unused channels to minimize interference.

The problem with Mr. McCabe’s argument is that he is just looking at the technical use of the spectrum and concluding that the broadcast use is not efficient. What he is overlooking is the economic and public good aspects of the present system of broadcasting. By having a widely distributed (and interference free) system of broadcasting with over 1,600 local television stations, the U.S. has an incredibly efficient system of providing audiences for local advertisers, local news and information for local audiences, and a emergency alerting system for first responders, among other benefits. These benefits are often overlooked when just examining the use of MHz in a particular band of the spectrum in a particular geographic area.

This debate will undoubtedly continue. As was mentioned several times during this conference, the demand for additional spectrum continues to grow. And, while there are steps that companies can do to better utilize their existing spectrum, there will be need for more spectrum. Given the spectrum that is presently being used by local television stations, and its physical qualities, that spectrum will always be discussed as possibly be reallocated. Yet, before that occurs, a full understanding of the present uses and its benefits needs to be considered.