TV antennas? Really? I jumped back into vinyl records, but what’s going on here?
Most of my memories of TV antennas consist of a safe comedy of Lucille Ball and Vivian Vance trying to install an antenna of their own – hijinks ensue – to Homer and Bart Simpson with their ceiling antics. Others may rely on calf-colored memories of a shirtless Brad Pitt fixing Leonard DiCaprio’s rooftop antenna in LA in the 1960s in Once upon a time in Hollywood.
None of this sounds like a fundamental element of the media business in the 2020s. But surprise, surprise – antennas have made a real comeback, and in a challenging economic environment, their importance may increase and they may represent a more so much for the packaged TV ecosystem.
The EW Scripps Company, one of the old-line names in publishing and broadcasting, recently provided an overview of the latest developments in the digital TV antenna market, and Jon Marks, the company’s Chief Research Officer, helped shed further light on the analysis of theirs. First of all, for many people who still have visions of rooftops in their heads, two-thirds of the digital TV antennas sold today are indoor units – small, flat, square discs that easily mount on a wall next to a TV. These antennas won’t bring you traditional cable networks like outdoor dishes do, but instead are an inexpensive means of receiving over-the-air (OTA) signals, which today include not only major network affiliates. streaming, but a bunch of streaming “dignets” (more on those later).
The antenna business is real and growing. According to the Consumer Technology Association (CTA), U.S. consumers bought 8.5 million set-top boxes in 2021 alone. That seems like a mere blip compared to the more than 200 million TVs sold globally last year, but it’s pretty impressive when you realize that DISH Networks, which has been in business for nearly 30 years, has a total of approximately 8 million satellite home subscribers. In fact, as Scripps and CTA point out, nearly one-third of all TV households in the U.S. now have a digital antenna, and half of those homes rely solely on antennas to receive broadcast signals. Scripps projects (using insights from Nielsen and CTA) that the total U.S. antenna market will exceed 53 million homes by 2025. By then, this will likely be roughly equal to the total number of traditional cable subscribers and US satellites (which has apparently been declining for years).
Having broken the first law of strategy advice – start with why – you may now ask why so many families are flocking to the antenna market. The rationale ranges from old-fashioned geography to the riches of newer technological advances. Since the earliest days of broadcasting, if you lived in a rural area far from a broadcast station’s antenna or in an urban area surrounded by tall buildings, you probably got pretty bad TV reception. Today’s digital antennas still address those OG problems, and for a low one-time price of about $25. And, even with millions of video options and dozens of streaming services to choose from, broadcast stations still uniquely possess live sports, major events and (for some) live local news that you can’t find anywhere else but through an inscription. broadcasting station.
The new element of technology comes with the world of “genies”. Diginets are new broadcast and cable networks powered by the expanded digital broadcast spectrum available to any television broadcaster. Broadcast owners often prefer the term “multicast network” which should not be confused with “Multichannel Networks” or MCNs such as Machinima, Next New Networks and others that were all the rage on YouTube in the 2010s.
Still confused? Do not be. Diginets were FAST channels (free, ad-supported TV) long before FAST channels were cool. There are more than three dozen of these networks, with Scripps as the most prominent creator/distributor, with a group of 8 multicast networks including bounce, jamming, TV court, tidings and more partially acquired through the company’s acquisition of Katz Broadcasting in 2017. Other such networks include Weigel’s MeTVNexstar’s TV antennaNBCUniversal’s Television queuesof Sinclair TBD, and CBS chart. Much of this content is what we used to call “reruns” and is now often labeled “classic TV.” It’s comfort food for the eyes. Viewership for these networks has collectively increased by 69% in the past 5 years versus a 31% decline in cable viewership over that period (off a much higher base, of course). As one senior ad sales executive in this space told me: “I don’t know how people find this stuff, but they do.”
Scripps identifies households that combine streaming apps with free content from antennas as “self-aggregators.” The company estimates that these households typically spend roughly $58 per month on their video versus an average of over $148 per month for those who combine cable or satellite packages with streaming services. In an inflationary environment, where the value equation is becoming increasingly important, this is massive savings for many consumers. At a NATPE panel earlier this year, Sinclair’s SVP of Growth Networks and Content Scott Ehrlich described these self-contained families as “among our fastest growing businesses.” He simply noted that “consumers will always like free.” This is a troubling proposition for Comcast
This is not entirely a business slam dunk. There are important market education issues to develop, both among consumers and advertising executives. The power of inertia remains strong in the ad buying community, and traditional broadcast and cable networks will likely maintain a disproportionate control of advertising for some time to come. But the perfect storm of price hikes for cable packages, an abundance of free content and a weakening economic environment are likely to cement digital antenna’s place in the TV firmament. And you don’t have to be afraid of heights either.