- Households Are Changing to OTT, Not OTA
- Over-the-Air Broadcasts Are Dead
- Regrab the Spectrum & Auction It Off
The CEA wants the government to take away the spectrum that local TV stations are using for over-the-air (OTA) broadcasts that require an antenna and auction it off to the cellular and Wi-Fi wireless networks.
Only 8% of Americans say they rely on OTA TV, according to a new CEA report. The survey of 1,256 adults said few US households are considering dropping their pay-TV service because of the allure of the recently expanded and now HD local broadcasts. Local TV stations now have three to four broadcasts, some in high-def, but they do not offer the many pay-TV networks such as CNN, TBS and ESPN. Everything they offer on their main channel is also on the pay-TV service.
Additional proof is that most US households no longer have an external antenna. They rely on their pay-TV service to bring them the local channels.
As we have said repeatedly, the threat to the pay-TV services is from the OTT online video services. The threat takes two forms:
- The loss of viewer’s time by the pay-TV services as consumers increasingly spend time watching Netflix, YouTube, Vudu and other online services. Maybe the time is being taken from watching DVDs, whose sales are declining, but somebody is losing eyeballs.
- The young, who have grown accustomed to using OTT services like Hulu and Netflix plus pirated downloads and who are not rushing out to sign up for pay TV.
The CEA survey said, however, the adult audience shows very little desire to cancel their pay-TV service for online video or over-the-air broadcast TV. Just over three-quarters (76%) said they were “unlikely” or “very unlikely” to cancel their pay-TV service.
However, it also said a tenth of households were “likely” or “very likely” to cancel pay-TV services. That’s a very, very high number so early in the era of smart-TVs, which only started shipping in large quantities this year.
The report said that more and more consumers were viewing OTT video from Hulu, Netflix and others on their TVs.
“Over-the-air TV was once the defining distribution platform,” said Gary Shapiro, CEA president and CEO.
“The only cord being cut these days is the one to the antenna. It’s time we accept this shift away from over-the-air TV as an irrevocable fact of the TV market. The numbers tell the story.”
Antenna makers won’t like that, and many will dispute it. The combination of OTA for local channels and OTT for TV shows and movies is attractive for many who are sports fans.
Shapiro wants the US government to take away spectrum that local TV stations use and make it available to wireless networks like the telcos. He said the survey showed that using wireless spectrum to deliver TV to homes no longer made economic sense.
He has a valid point in that the local broadcast stations have not taken advantage of the spectrum, which they got when they upgraded from analog to digital broadcast, for must-see channels and mobile TV. Mostly they show repeats of the last local news show, a weather/traffic monitor and very old TV shows. There is no free mobile TV as the stations had promised.
FCC chairman Julius Genachowski wants to take back the spectrum too. In April he said at the broadcasters’ convention that “The record is clear: America needs more spectrum for mobile Internet access.” He wants to grab back 500 MHz of spectrum in the next decade for wireless broadband. He said the grab is “certainly not limited to, but includes, broadcast spectrum.”
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