The latest threat to cable: Over the air DTV


Some may blame it on the economy; others are now saying with all of the extra multiplexed DTV channels out there in markets across the country, cable and satellite subscribers are not necessarily “cutting the cord’ to save money, but are instead realizing how many new choices are out there from their local broadcast stations. A recent story from the Milwaukee Journal-Sentinel pointed out that one local viewer was a cable television subscriber for 10 years until he found that he could get 51 TV channels – including HD channels – from an antenna at his suburban Milwaukee home. And that’s Milwaukee—just think about the choices in Houston, NYC and LA.

The story noted that the percentage of broadcast-only households in Milwaukee is the fifth-highest among the top 210 television markets in the U.S. Nearly 23% of TV households in the Milwaukee area are broadcast only. The national average is 9.6%, Nielsen statistics show.

Many TV stations, including Class A and LPTV, can now offer quite a few video channels. With units such as the Tandberg Multiplexer, some can do 10-12 video channels, a few audio channels and mobile apps. Take a look at All of the multicast channels are listed (many stations are currently not using their spectrum). In many markets where people are cutting the cord at $80-$120 per month, there are so many multicast channels that it almost makes up for it, at least in number of channel choices.

While many think Netflix and Hulu are stealing eyeballs from cable and satellite, multicast offerings are starting to become a viable alternative for viewers, at least those willing to wield a proper antenna. There are more programming choices and many are getting hyper-localized. With must-carry, many of these channels are being carried by cable as well.

The proof in the pudding also rests with evidence of how fast antennas are going off the shelves. The story noted Richard Schneider, president of St. Louis-based Antennas Direct, one of the nation’s largest antenna retailers, said November was the best month in the history of his seven-year-old company. He expects to sell about 500,000 antennas this year, mostly through electronics and home-improvement stores, for about $10 million in sales. We’ve heard he is running ‘round the clock with three shifts.

Advances in antenna design have helped drive the chageovers as well. The newer units are smaller and less obtrusive than the classic rooftop modern art.

RBR-TVBR observation: Cable is already fighting back with lower cost packages with less channels. Time Warner Cable’s recently-launched TV Essentials package offers about 50 channels. But the renaissance of over the air offerings — which include everything from classic TV, movies, local weather and news, foreign language, and specialty PBS channels – will only increase with new entrants in the field and new technology to bring it there. The real pressure may end up forcing more and more a la carte offerings from cable to compete.