59,700,000 Cable Cutters

On 8/2/2013, Time Warner Cable (TWC) stopped transmitting CBS programming to 3,200,000 subscribers in key markets.  Associated transmission fees top $400,000 per day.  For the time being, TWC seems to be in the drivers seat, but, if this drags on into the fall, fans of college footbal, the NFL, and CBS programming may look elsewhere for entertainment.  In the long run, TWC may lose more than CBS.

While other premium service providers have been reluctant to poach blacked out customers, Channel Master and RadioShack have both offered discounts to ‘victims’ of the blackout.  Time Warner has recommended its customers turn to broadcast and Aereo for blacked out programming and is giving rabbit ears to its customers.

CBS chief Les Moonves dismisses all of this as a charade…

“Right now over 85% of our viewing is done through satellite, cable, or the phone companies. The remaining 15% are not the most advertiser friendly, appealing to advertising.”

I don’t think Les is right.  I own a home, have two new cars, send a kid to college, and own seven high definition televisions, four desktop computers, three laptop computers, five tablets, three cell phones, and two antennas.  And I watch all the commercials broadcast along side the terrific CBS shows.

I’m not alone.  GfK estimates 22.4 million households representing 59.7 million consumers receive television exclusively through broadcast signals and aren’t subscribing to a Pay TV cable or satellite service.  in other words, seven times the number of households being blacked out choose to watch advertising that arrives through an antenna.  The percentage of broadcast only homes has increased from 14% in 2010 to 19.3% today.  More troubling for the premium service providers, antenna use is rising fastest among younger people and minorities.

According to GfK (via Andrew Dodson)…

  • 19.3% of all U.S. households with TVs rely solely on OTA signals
  • GfK estimates 22.4 million households representing 59.7 million consumers receive television exclusively through broadcast signals
  • Minorities make up 41% of broadcast-only homes
  • 49% of Latino households that prefer speaking Spanish home have a Pay TV service — down from 67% in 2010
  • 28% of TV households where the head of the house is 18-34 in age, exclusively watch TV via broadcast signals, up from 18% in 2010
  • 19% of TV households where the head of the household is 35-49 relies on OTA signals; 17% in which the head of household is 50 years or older
  • Two out of 10 younger OTA households have never purchased a pay TV service
  • 30% of TV homes with an annual income less than $30,000 rely solely on OTA TV — up from 22% in 2010
  • 11% of TV households with incomes of $75,000 or greater rely solely on OTA TV

Manufacturers and advertisers are paying attention. Fox has launched a new Movies! channel and Sony will roll out its own movie channel in the fall.  EchoStar is planning the release of two new OTA DVRs for this Christmas season.  Aereo, Skitter, and Filemon all offer broadcast television over the internet and Google/YouTube and Intel are talking about their own alternatives to terrestrial/satellite offerings.

If you are blacked out or dissatisfied with cable or paying too much for television this might be a good time to consider cutting the cable.  One thing is for sure — you won’t be alone!

By Len Mullen Posted in News, OTA

4 comments on “59,700,000 Cable Cutters

  1. In the last week or two, The Cool TV network, basically music videos stopped broadcasting here in Ct. I’m hoping it will be replaced by something better, tried contacting both TCTV and the MY9 affiliate for more info, but never got an answer.

  2. Les is dead wrong. Those people watching via OTA buy stuff. And what does he man not advertiser friendly. With a cable DVR/STB you are more likely to be skipping through the commercials. When you see it in real time you can’t do that.

    And oh by the way Len, you really own a lot of TV’s. LOL

  3. I do. I love television. One of my TVs is a 36″ Sony 4:3 SD flat screen which is great for the WII — in case I ever want some exercise. It is headed to the basement. Another is a 19″ HD LCD that has a DVD player built in. I got that as a service award at work and we take it camping. It is also great for working on my OTA infrastructure since it is very portable and has a digital tuner. In my living room, there is a Samsung 50″ 720p plasma. That was my first HD TV and we bought it because the PS3 looked so bad on that 36″ plasma. After we bought that, we were hooked on HD and started replacing the CRTs with inexpensive LCDs. A 26″ LCD that started in my bedroom went to college with my oldest and has since returned to my kitchen. We got 32″ LCDs for the bedrooms — one of those is at college right now. My office is in my bedroom. My desk is just below and to the right of the TV and there is a recliner in the opposite corner. I bought a 43″ Samsung plasma mostly to deal with the geometry of the room and the wide viewing angles (gave my brother the 32″ LCD). The last set I bought was an RCA 42″ plasma (Samsung parts) which was on sale for $270 at Best Buy. Right now, it is in College Boy’s room, but the missus and I are moving from the master suite into one of the bedrooms and that will go with us. The 43″ Samsung will remain in the soon to be dedicated man cave.

    That is a LOT of TVs. Funny thing is none of them are on right now. Sometimes I enjoy the quiet 😉

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