nScreenMedia OTT multiscreen media analysis

Over-the-air TV growth driven by OTT integration

Nielsen broadcast only households

Support for free over-the-air TV is showing up in some very unusual places these days. With the help of pay TV operators, game consoles, and broadband, the 76 year old commercial television industry is gaining a new lease on life.

For a while it looked like free over-the-air (OTA) television might disappear completely. In the second quarter of 2010, Nielsen reported that the number of OTA households had fallen to just 10.9M. It hovered around that mark for next 4 years. Since Q2 2013, 1.2M new households have turned to OTA television, bringing the number of homes to 12.3M. Ironically, it looks like broadband could be the reason. Nielsen reports that the number of homes relying on broadcast and broadband for entertainment increased from 5.3M in Q1 2013 to 6.2M in Q4 2014.

The pairing of OTA TV with broadband is a good one for some consumers. While library TV titles are ably handled by services like Netflix and Hulu, the very latest linear TV favorites like Big Bang Theory and local football games aren’t freely available outside of pay TV. OTA delivery solves that problem.

The folks at Xbox realize that while gamers may not be interested in watching regular TV they are interested in shows like Big Bang Theory. The company is now bundling the Hauppauge TV Tuner for Xbox with a Mohu Leaf 50 antenna for $99.99 from the Microsoft store. Gamers can watch TV full screen or have it in a pip (picture in picture) while they play games. And if the gaming action gets too intense, the TV feed can be paused for up to 30 minutes. Sadly DVR functionality is not provided at this time, but hopefully will come later.

Far from battling the threat of cord cutting, as many are doing, Cablevision appears to be embracing it. The company is offering a “cord-cutter package” which combines 50 mbps broadband with an OTA antenna and access to 1.1M WIFI hotspots for $44.90 a month. This might at first seem a little crazy. After all, everyone in Cablevision’s broadband footprint can also get pay TV from the company. Isn’t it potentially encouraging its own customers to cut the cord?

Perhaps not, according to new data from TiVo. The company surveyed 500 recent purchasers of the Roamio OTA DVR, and found that a third had formerly been satellite DVR customers.

DVR+ EPG with OTT Content

ChannelMaster DVR+ EPG with OTT

Cablevision is not the only pay TV operator courting cable cutters. Frontier Communications has recently signed an agreement with TiVo to make the Roamio OTA DVR available to all its broadband customers. Frontier President and Chief Operating Officer Dan McCarthy said this allowed the company to deliver “…the best of broadcast television, seamlessly integrated with over-the-top video, bundled with Frontier’s high-speed data service.”

For people that really love the traditional grid guide but still want to watch online video, Channel Master announced its LinearTV technology at CES. It allows online broadcast channels to appear in the linear channel guide of the DVR+ alongside over-the-air broadcast channels and Internet services like YouTube and Pandora.

With all of these moves combining OTA TV with broadband and OTT content, it looks like the number of homes (re)turning to OTA TV is set for a big increase.

Why it matters

Over-the-air TV looked to be in serious decline in the US at the beginning of the decade.

Consumers are beginning to recognize that OTA plus broadband content could be a compelling substitute for high-priced pay TV.

Many companies, including pay TV operators, are bringing solutions to market to capitalize on this trend.

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