Broadcast TV: The Second Coming?
We're bringing broadcast back.
A new study from The Nielsen Co. released September 11 found that the US homes receiving broadcast signals (but not cable or satellite TV) had grown steadily, up 41% over the past five years, to 15.8 million households.
The study, sponsored by ION Media, owner of 60 full-power broadcast stations in the US, found that broadcast-only homes were increasingly popular among millennial households as well. In fact, the median age of viewers in a broadcast-only home was 34.5 years, compared with 39.6 years which is the average for all TV households.
Also surprising, broadcast-only homes are also more likely to have children (39%, compared with 34% among all TV households) and are more likely to have "a greater composition of working head of householders than total TV homes, with 67% in the labor force," according to the statement from ION Media.
And they are more diverse, with 42% being Hispanic, African-American and Asian households compared with 30% of total households.
The fact that broadcast-only homes are increasing is not surprising. With the steady rise in the cost of pay-TV and the growth in cord-cutting, it does make sense that people would be looking at alternatives. The top four local broadcast stations still account for the most viewed TV programming among US households, so trading an expensive full-fat pay-TV bundle for free over-the-air channels makes perfect sense. And viewers can always top-up with an OTT service.
But what is most interesting in this study is the composition of broadcast-only households. Firstly, I would expect that households with children would be more likely to subscribe to cable, simply because they would want more programming for their children to watch. The fact that broadcast-only households are more likely to have children suggests that parents are already looking first to OTT sources for their children's video entertainment rather than cable TV. If that's true, that's an ominous sign for children's cable networks -- and maybe a positive one for Disney's planned OTT service. (See Disney Joins OTT Bandwagon.)
The other interesting finding is that broadcast-only households are more likely to have a working head-of-household than total TV homes. This would imply that cost alone is not the major driver for dropping pay-TV, since these homes are more likely to have a steady income.
Still, even with the 41% growth, only about 12.5% (by my calculations) of US households are broadcast-only today. There's a reason pay-TV took off in the US originally, and that's because not every home can receive TV signals. Buildings, mountains, other people's houses -- they can all block signals. And setting up a rooftop antenna is a project that not everyone wants to get involved with, especially in a country where it's not very common.
Plus, there is a trade-off in terms of the number of channels you can receive -- but more importantly, which ones. Some of the larger TV markets in the US could have 20-plus local channels, but they aren't necessarily the ones you want. Cable does offer programming that appeals to viewers -- that's how it has built up an audience.
It's likely broadcast-only households will keep growing as cord-cutting continues, but it's likely to stay a niche.
— Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation
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