OTA + OTT: The new TV bundle

Much has been said about the impact of streaming on the way audiences engage with TV, but the extent is no better exemplified than by the behavior of audiences in TV homes who don’t pay for cable or satellite programming. A specific subset of these homes, which rely on a digital antenna for free, over-the-air (OTA) programming, watch the most broadcast programming of all U.S. TV households, but that’s starting to change.

The significant amount of broadcast TV viewing within these homes certainly isn’t surprising, given that’s what digital antennas provide access to. But increased connectivity and the growing abundance of over-the-top (OTT) content is shifting the viewing behavior among these former broadcast programming stalwarts to provide more of a balance with their news and sports-heavy TV diets.

While audiences in OTA homes still watch more broadcast programming than those in broadband and cable plus¹ TV households, they are watching less of it than they have in the past (1:54 per day vs. 2:25 in 2018), complementing their broadcast TV consumption with streaming video viewing. In fact, audiences in OTA homes now watch more streaming content than audiences in homes with cable or satellite programming.

Perhaps most interesting amid the changing behaviors of TV audiences is the overwhelming stability of this portion of the U.S. TV household universe. While the percentages of broadband and cable plus households have shifted dramatically over the past few years, the percentage of OTA homes has remained very stable. In fact, it’s actually increased.

Despite their broadcast-focused roots, the shifting viewing behaviors of audiences in OTA homes mirrors that of the general TV population, with streaming content moving to the forefront. According to a recent Nielsen TV custom survey², 80% of audiences in OTA homes say they also subscribe to a streaming service. And among the homes with access to OTA and streaming content, two-thirds of the audience say they watch more streaming content than broadcast programming.

This consumer behavior tracks with Nielsen TV panel data, as the percentage of OTA homes without any additional SVOD or virtual multichannel video programming distributor (vMVPD) service is steadily declining. The median age in these OTA-only homes is 61, compared with 45 for those with SVOD and 49 for those with SVOD and vMVPD.

Cost has always been a factor for many OTA homes, and that factor is also reflected in what they stream, as 50% of the OTA viewers in our recent survey said they watch free, ad-supported streaming services, twice the percentage of TV viewers with other programming options (cable, satellite, etc.). Among all TV viewers, just under 70% of OTA audiences say they spend less than $100 each month for their TV programming. But when asked about the features they look for most in TV service, OTA audiences rank “ad-free” and “ad skipping” at the bottom of their priority lists, presenting significant upside for brand advertisers.

Despite the ongoing evolution of TV viewing, there are two key constants:

Consumers will continue gravitating toward streaming content.
News and sports content will continue to attract significant audiences (last year, sports accounted for 98% of the top 50 most-viewed TV programs.

These constants present both stability and opportunity for the OTA market, given what we know about OTA audiences: They watch more local news (local and national), sports and daytime TV than other audiences, and they are growing their streaming diets.

But all TV audiences love news and sports programming, which is where the opportunity is for broadcasters, largely because many audiences don’t know enough about the OTA options in their areas, or how to access them. Among the audiences who said they aren’t likely to buy a digital antenna, 35% said it was because they don’t know what channels are available to them. When asked non-OTA audiences how likely they would be to buy an antenna once they knew they could watch broadcast TV without paying a fee, 60% said they were somewhat or very likely.

Notes

Cable plus homes are those that can watch television programming through a traditional cable, satellite or telco provider.
The Nielsen TV consumer survey was conducted in English-only from March 9-24, 2022, via an online survey. It was based on a representative sample of 1,500 U.S. adults 18+ who currently use any TV services in the home.