Which way OTA?

The Federal Communications Commission released its 15th annual report on video competition last week, which concluded, among other things, that the number of U.S. households relying exclusively on over-the-air broadcast signals to receive TV programming held steady in 2012, at 11.1 million, the same as in 2011. Because of a slight dip in the number of TV households, that 11.1 million represented 9.7 percent of total TV households last year, compared to 9.6 percent in 2011.

That’s roughly half the number and percentage estimated by GfK Media & Entertainment in a report released last month. According to GfK, some 22.4 million U.S. households are OTA-only for linear TV, representing 19.3 percent of total TV households. That’s up from 17.8 percent of households last year, and from 14 percent in 2010.

The time periods covered by the FCC and GfK reports do not line up precisely; GfK’s estimate of 22.4 million OTA households includes data from the first quarter of 2013, whereas the FCC’s estimate is as-of year end 2012. There may also be some slight differences in the definition each is using for OTA-only. But the differences in the estimates and the trend lines are so great you’d think the two were looking at totally different markets.

What’s going on? I really don’t know, but the answer potentially is important. The market portrayed in the GfK report is a lot more dynamic than the FCC’s portrayal, with over-the-air broadcast rapidly becoming a bigger and more important component of the TV distribution system, whether for economic reasons or because consumers increasingly rely on a patchwork of delivery methods to access the content they want where and when they want it and use OTA in combination with OTT services.

“Over-the-air households continue to grow, making up an increasingly sizable portion of television viewers,” GfK senior VP David Tice said in a statement. “Our research reveals that over-the-air broadcasting remains an important distribution platform of TV programming; this year’s results confirm the statistically significant growth in the number of broadcast-only TV households in the U.S., which we identified in 2012.”

Given all the other moving parts rights now in the TV distribution system, and the FCC’s own plans for repurposing some broadcast spectrum for wireless broadband use, it would be nice to have a clear idea of what’s actually going on in that segment of the market.

Relevant Analyst

Paul Sweeting

Principal Concurrent Media Strategies

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