Antenna use continues to increase in the U.S., though not as fast as the number of people cutting the cord. The imbalance illustrates the reversal of roles between live TV and online video services. In many homes, linear TV augments online viewing, not the other way around!
1-in-5 broadband homes watch antenna TV
New Parks Associates data says the number of broadband homes in the US using a digital antenna reached 20% in Q3 2017. That is an increase of 4% over 2015. Parks says this coincides with steady growth in the number of cord-cutting homes and steady growth in OTT video subscriptions. Undoubtedly, antenna use, SVOD growth, and pay TV decline are related but it would wrong to say there is a one-to-one relationship: a decline in one does not mean a similar size growth in another.
Data from Nielsen shows that almost all of the growth in antenna use in the U.S. comes from broadband households. The company says that 15.8 million U.S. homes in Q2 2017 used an indoor or outside antenna to watch television. That is an increase of 22% year-over-year and 31% since 2014.
What’s more, this increase is almost entirely due to homes that also have broadband. The number of homes relying exclusively on an antenna for TV has hardly changed at all since Q2 2015, up just 400,000 (5%) to 6.4M. Over the same period, the number of OTA homes with broadband increased 2.7M, or 36%, to 9.4M.
Antenna use is not a replacement for pay TV
The growth in antenna use has not kept pace with the growth in cord cutting. According to Nielsen, the number of pay TV households in the U.S. was 101.6 in Q2 2012. By Q2 2017, that had fallen 5.4 million to 96.2 million. In other words, more than twice as many homes quit pay TV than started using an antenna.
Some have adopted vMVPD services such as Sling TV and Hulu Live. In Dish Network’s Q4 2017 results, the company said Sling TV had 2.2 million subscribers. New data from TiVo suggests DirecTV Now and YouTube TV have a similar number.
As well, consumers that have cut-the-cord almost always cite cost as the primary factor. In its Q4 2017 Video Trends Report, TiVo reports that 87% say it is the cost that was a major reason they cut the cord. 40% said SVOD services like Netflix were a primary reason, and 23% said they use an antenna to get their basic TV channels.
Antenna use is a cord-cutting enabler
Given that almost all the growth in antenna use is coming from broadband homes, it is a fair bet these homes are already big consumers of online video. comScores says that in April 2017, OTT streaming households consumed 49 viewing hours per month. Cord-cutter homes were viewing 81 hours per month, far higher even than homes that never had pay TV (so-called cord-nevers.) Penetration of vMVPD homes was also much smaller a year ago than today, suggesting most of the streaming was from SVOD services.
The role that an antenna, and increasingly vMVPDs, play in the cord-cutting broadband home is not as a replacement for pay television. It is to supplement the already heavy OTT video consumption from SVOD services. There are still important live and local events that cannot be found on broadband. Using an antenna, or vMVPD service, allows people to continue to watch these. In other words, live TV has become an augmentation of the main video diet of online video.
Why it matters
The number of homes using antennas to watch television is increasing, but not as fast as the number of homes cutting the cord.
Cord-cutting homes stream nearly three hours of video per day, making online their primary source of video.
Antenna use, and increasingly vMVPDs, supplement the use of streaming allowing the cord-cutting homes to continue to enjoy essential local events.