The Associated Press reported this week, "The Netherlands ended transmission of 'free to air' analog television [Dec. 11], becoming the first nation to switch completely to digital signals." The U.S. is scheduled to follow on Feb. 17, 2009, two years and two months from now, when it's likely that government officials and broadcasters alike will be in Dutch with many viewers. But just how many?
Nearly three years ago, using 2003 data, Andrew Cotlar of the Association of Public Television Stations and I worked on an estimate using market-by-market data from the FCC and from Nielsen Media. The estimate, which adjusted for people subscribing to cable and alternative delivery services (ADS -- largely DBS, but also including MDS, large backyard dishes, broadband, et al.), was that 19.3 million households (17.8% of TVHH) were relying exclusively on over-the-air viewing for television services -- the equivalent of the top four markets (New York, Los Angeles, Chicago and Philadelphia) plus the Louisville DMA.
I've just redone the estimate using 2006 data (sources linked below). They now bring in an estimate of 15.4 million households (14.0% of TVHH), the equivalent of New York, Los Angeles, Boston DMAs and change. So in that three years, some 3.9 million households abandoned OTA for at least their primary receiver in favor of cable or ADS (but see update below).
Looking at it on a market-by-market basis, the same patterns emerged in the 2006 data as in the 2003 data. While 14.0% of TVHH are exclusively OTA (Baltimore and Greenville-Spartanburg-Asheville-Anderson SC are prototypical) the number varies greatly across DMAs. Three markets exceed 30% OTA exclusives: Harlingen-Weslaco-Brownsville-McAllen TX with 37.9%, El Paso TX-Las Cruces NM with 32.7%, and Boise ID with 30.8%. Twenty-nine more are in the 20-26% range, including "top 50" DMAs Salt Lake City (24.4%), Houston (23.1%), Portland OR (21.7%), Dallas-Ft. Worth (21.4%), Milwaukee (21.0%), Los Angeles (20.6%), and St. Louis (20.0%). Also above average is Chicago at 18.8%. At the other end of the scale, 45 DMAs have less than 10% OTA exclusives, with West Palm Beach-Ft. Pierce FL the lowest at 5.4%.
Ironically, the two most powerful advocates for a quick end to analog television, Sen. Ted Stevens of Alaska and Rep. Joe Barton of Texas, will be getting more nastygrams from their home town constituents than most legislators (Fairbanks 26.2%, Anchorage 20.2%, Dallas-Ft. Worth 21.4%).
Even some low percentage markets have large numbers of OTA-exclusive households. The following DMAs comprise half of the OTA-exclusive households (in thousands):
| Los Angeles | 1,139 |
| Chicago | 639 |
| New York | 573 |
| Dallas-Ft. Worth | 500 |
| Houston | 447 |
| Minneapolis-St. Paul | 394 |
| San Francisco-Oak-San Jose | 301 |
| Phoenix (Prescott), AZ | 272 |
| Philadelphia | 266 |
| St. Louis | 244 |
| Washington, DC (Hagrstwn) | 241 |
| Portland, OR | 239 |
| Cleveland-Akron (Canton) | 234 |
| Seattle-Tacoma | 234 |
| Detroit | 225 |
| Denver | 214 |
| Sacramnto-Stktn-Modesto | 207 |
| Salt Lake City | 198 |
| Milwaukee | 185 |
| Atlanta | 179 |
| Tampa-St. Pete (Sarasota) | 178 |
| Indianapolis | 172 |
| Miami-Ft. Lauderdale | 161 |
| Cincinnati | 161 |
| Boston (Manchester) | 155 |
An accurate estimate of numbers and distribution is important to broadcasters because the economic value of OTA households is greater to them than that of cable or DBS households. We urgently need more research to judge just how much more, but my gut feeling after looking at various indicators is that an OTA household is in the neighborhood of double or triple the value of a cable or DBS household.
The loss of OTA exclusive households has come almost entirely from DBS subscriptions, fueled by local-into-local carriage. The chart to the right shows the trend for the last 28 sweeps for one of the largest and the lowest OTA market (click on image to enlarge). That can also be seen in the drop in people subscribing to both cable and DBS from 1.7% in the average market in the 2003 data to 0.86% in the 2006 data (that is, DBS subs who get a basic subscription to cable for local channels). Arguably, that growth may have peaked, but HD local-into-local is on its way and that may result in another rise in DBS subs.
Sources and notes: A PDF showing OTA estimates for all markets is available here. A list of DMAs and their households is available from Nielsen Media Research. Cable and ADS penetration by DMA is available from the Television Bureau of Advertising (Nielsen Media Research data). The New Orleans DMA was not reported for 2006, so I adjusted the number of households to 83.8% of pre-Katrina households then used the 2003 cable+ADS percentages. The FCC's 12th Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming is available here [large MS Word file].
Update 18 Dec. 2006:
The numbers above were updated today to correct a minor error in the formula I used to estimate OTA households. The revision lowers the OTA number by only 0.2% of total TVHH. More importantly, I meant to note in the original post that, in the original study, it was safe to assume that most ADS households were also OTA households, albeit of likely lower economic value than OTA-only households. Because ADS HH are predominantly DBS, and because DBS local-into-local has become widespread across DMAs, it's likely that those households are now relying on DBS for their local stations rather than OTA. So the true drop in OTA is equal to the 3.9 million HH that are neither ADS nor wired cable plus some unknown but probably large percentage of the 2003 ADS HH. In the 2003 data, the OTA and ADS numbers were nearly identical (19.3M vs. 19.5M, respectively). In the 2006 data, they are 15.4M vs. 26.7M, respectively, reflecting the large growth in DBS HH. In the chart here (click for larger image), ADS got about 3.5M HH from wired cable and 3.8M from OTA in that three-ear period. As Steve Bass points out in a comment below, it's the OTA-only HH that have the largest membership value for those of us in public television.
Updated 24 Dec. 2006:
Broadcast Engineering is reporting that 19% of HDTV HH in the U.S. and receive HD programming do so via OTA broadcast. See Wanted: HD OTA viewers. Link: Broadcast Engineering. --Dennis
It's worth noting that the Prime Time research undertaken by CPB has some interesting data related to OTA households. Most importantly, the "measured and engaged" segment (measured in their use of television and engaged with public television) constitutes 8% of all prime time TV viewers and 75% of this segment is OTA only. This is an enormously important segment for public television and one that we need to help migrate the impending end of analog transition.
Posted by: Steve Bass | Sunday, 17 December 2006 at 19:44