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5m US homes cut the cord and rely on free to air TV

More than 17 million US households representing 45

By PETER WHITE

Published: 16 June, 2011

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More than 17 million US households representing 45.6 million consumers, receive television exclusively through broadcast signals (OTA), according to new research by Knowledge Networks. The 45.6 million, it said, is up from 42 million a year ago.

The report also said that 4% of TV households, about 5 million, cancelled their pay TV service in their current home at some point in the past and now rely only on over the air reception. That’s an alarming number for the pay TV companies calculating how much revenue per year they’re losing. Even at a low $10 a month, it’s a sizeable amount.

The numbers do not at all agree with those the pro-wireless Consumer Electronics Association put out last week.

Knowledge Networks said the demographics of exclusive OTA-users skew towards younger adults, minorities and lower-income families.

"As we’ve seen for the past few years, over-the-air households continue to make up a sizeable portion of the television viewing landscape," says David Tice, VP and group account director of KN’s media practice. "Our research reveals that over-the-air broadcasting remains an important distribution platform of TV programming, and that the estimated number of broadcast TV households in the US has grown."

Of the cord-cutting homes, the report said most cited overall cost-cutting (71%) or not enough value for cost (30%) as the reason. Respondents could give more than one reason. They did not list the Internet and over-the-top (OTT) as a reason for cutting-the-cord.

Minorities make up 40% of all broadcast-only homes. One-fourth of Asian households and 17% of African-American households use OTA exclusively. Also, 23% of Hispanic homes are broadcast-only, which increases to 27% among homes in which Spanish is the language of choice.

Homes headed by younger adults are also more likely to access TV programming exclusively through broadcast signals. Twenty percent of homes with a head of household age 18 to 34 are broadcast-only, compared with 15% of homes in which the head of HH is 35 to 54, or 13% of homes in which the head of HH is 55 years of age or older.

Lower-income households trend towards broadcast-only television, with 23% of homes with an annual income under $30,000 receiving TV signals solely over-the-air. In comparison, 11% of homes with incomes greater than $30,000 rely exclusively on OTA. The young and poor among the minorities are unlikely to know that the FCC wants to do away with their local stations extra channels.

The survey results appear to show a great opportunity for the likes of Sezmi, which offers a combination of OTA and OTT for as little as $5 a month. There is an affordability factor though. The price of the Sezmi box has been reduced to $149 to make it more attractive and the home has to have broadband.

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