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Cable Technology Feature Article

December 06, 2010

Over-the-Air TV Gaining in Popularity

By Susan J. Campbell, TMCnet Contributing Editor

Is it the return of the rabbit ears? A recent New York Times piece focuses on the emerging phenomenon where people are relying on old technology to pull free TV signals out of the air.

Fed up with skyrocketing costs associated with sub-standard viewing, customers throughout the country are buying antennas and tuning in to a significant number of free broadcast channels – and loving it.

The challenge is that interference can be a true problem for seamless viewing, yet dedicated fans say that the price (Free!) is hard to beat. And, as introductory rates expire for TV viewing, many subscribers are finding that exorbitant costs for viewing – especially with alternatives available – just isn’t worth the higher cost.

In fact, from April to September, cable and satellite companies had a net loss of roughly 330,000 customers. According to Craig Moffett, a long-time cable analyst with Sanford C. Bernstein, the consensus of industry execs is that customers are leaving for the antenna.

Many execs also argue that this trend is merely a recessionary byproduct and subscribers are likely to return. In fact, 90 percent of American households still pay for some sort of cable or satellite programming and this number has been slowly and steadily rising.

Of course, the switch last June to digital broadcast signals has left the overall industry in flux. The change provided opportunities for pay TV providers to gain new subscribers in those who were worried that their old TV sets would not pick up new signals. Analysts point out, however, that many of these individuals have gone back to free signals.

The rise of Internet video is also forcing a change as users view this as a viable alternative to paying for high cost subscription plans.

As for penetration on antennas throughout the industry, hard figures are hard to come by. Volumes should be strong, according to Antennas Direct president, Richard Schneider. His projections show Antennas Direct selling 500,000 antennas this year, up from 385,000 in 2009.

And, this technology is a far cry from the wire-hanger versions that permeated the industry a generation ago. The circles encased in plastic more resemble a certain cartoon mouse than any bunny. Plus, they can pick-up high definition signals that can actually be crisper than cable or satellite.

Schneider believes the push is among a number of 20-somethings who view over-the-air as the new basic cable. With free TV and Internet channels, people are finding what they need to end a bad relationship. And, broadcasters believe it benefits them.

Is this the new trend that will change the viewing landscape? We may not know for sure until we start to see subscriber prices come down and broadcasters demand changes. As long as they benefit from more viewers – paid or free – they can still drive ad dollars, which won’t help cable or satellite partners, but could keep free TV growing.

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan’s articles, please visit her columnist page.

Edited by Tammy Wolf