Bunny Ears Redux?

Here come antennas and over-the-air broadcast, again
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When cable TV came onto the scene, the question of the day was, “Who will pay for TV when TV is free?” The answer, as we all know by now, was most people. And most people were willing to pay because the promise of the day was that cable TV would provide a better, more reliable picture without having to fiddle with the position of the antenna or worry about how a thunderstorm might impact the broadcast.

Stephanie Wong

Stephanie Wong

Additionally, cable allowed for a breadth of entertainment, news and sports content that had never been seen before. For a long time, it seemed like cable TV was going to be the way of the future, the gold standard, and the antenna would drown in the wake of cable TV’s wave. And for many years, that’s what we saw.

Then, less than 15 years ago, YouTube and Netflix began streaming video content, and everything changed again. In the years since YouTube and Netflix changed the game, the era of innovation in video has not slowed down. Apple TV announced its streaming service in March, Disney just released pricing for its Disney+ product, and Warner Bros. and NBCUniversal are expected to release details about their direct-to-consumer subscription video-on-demand services later this year. Outside of the digital ecosystem, advancements in broadcast and cellular technology are improving video delivery outside the traditional pay TV ecosystem, and this is leading to a re-emergence of that once cast-aside technology: the antenna.

Antennas Rise Again

As more and more viewers begin to rely on streaming, but are unwilling to cut out live and broadcast television completely, they are turning back to antennas. According to Horowitz’s State of Pay TV, OTT & SVOD 2019 report, a full third (34%) of TV content viewers today use an antenna at home.

Qualitatively, from several projects that I have worked on, I have seen the antenna serve different purposes in the home. In some homes, the antenna is only for football games; in others, it’s for local broadcast; still in others, there are six TVs and the head of household is just not willing to pay for six cable boxes but still wants some access to TV content on every set.

Today’s antennas are a far cry from what many of us may think about when we think about antennas: many of them are sleek, unobtrusive and a few are downright stylish. Innovations in antenna design are helping it shed its reputation as an antiquated piece of technology. In fact, today’s antenna owners skew toward a demographic that is traditionally thought of as tech-savvy: young, male, and heavy streamers. Antenna owners are also more likely to subscribe to an SVOD service: 78% of antenna users subscribe to Netflix, Amazon, or Hulu (not including Hulu with Live TV) (vs. 66% of MVPD subscribers), suggesting that antennas are helping fill in the live, local, and broadcast gaps for those who have made streaming a central part of their TV viewing diet.

It’s never just about design though: the technology also has to work — and here, too, we are seeing innovations and improvements that are creating an increasingly better over-the-air experience.

Creating a ‘Cable Experience’

Newer technologies, including TiVo’s Bolt OTA, Plex, and Amazon’s Fire TV Recast, allow for DVR’ing over-the-air content. This DVR capability is empowering viewers to piece together a “cable experience” using subscription video-on-demand services — which provide the breadth of content that for so long was one of cable’s differentiators — and over-the-air broadcasts, often at dramatically reduced costs.

Perhaps most importantly, TV and video streaming technology has improved to the point where accessing different video sources as easy — or, in some cases, easier — than navigating a cable set-top box menu. It used to be that, in order to access streaming services, you would have to change HDMI inputs; on some of the latest models of TVs, antenna TV shows up as just another app, as if it were Netflix.

ATSC 3.0 and 5G will bring yet another layer of complexity into the TV viewing ecosystem. ATSC 3.0 will introduce stronger signals, making over-the-air more accessible to even more viewers, 4K and HDR support, appeasing the picture purists, improved mobile support, giving viewers on-the-go access and programmatic advertising, allowing brands to better reach the demographics they want to target.

So now, we find ourselves asking the same question we were asking when Horowitz was founded in 1985: who will pay for TV when TV is free?

Stephanie Wong is director of insights and strategy at Horowitz Research, a consumer market research provider specializing in media content, services and technology.

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