What’s This?
For those too young to know, this is a roof antenna, similar to those that were used to receive television signals before cable and satellite TV were possible. TV broadcast stations had transmitting antennas on towers, usually at the highest point they could find near the broadcast facility, and signals were transmitted to rooftop antennae like the above so we could watch out favorite programs, as long as the weather was good and the station was broadcasting (many stations ended broadcasting in the evening). When satellite dish service became available and then cable, US households began to transition away from OTA (over-the-air) service.
Estimates for antenna households can be a bit shaky considering that some have both an antenna and other TV viewing sources, but a study done in 2020 indicated that 40% of TV content viewers over the age of 18 reported owning an antenna, which was up from 29% in 2019. This translates to ~48m households based on Neilsen’s (NLSN) 121m TV household estimate for 2021. That same survey indicated that 5% of TV content viewers also indicated that they were planning to get an antenna in the next year and 9% said they were ‘very likely’ to get one after being presented with details of what is called NextGen TV, and another study, connected with a promotional campaign to let potential viewers know about NextGen TV indicated that 40% of consumers were aware of the technology, up from 25% the year earlier. Even more amazing was that the same survey indicated that 74% of those who viewed ads for NetxGen TV were likely to purchase a TV set from the manufacturers mentioned in the ads, up from 60% the year before, although ~30% actually made such a purchase.
Surveys and promotions aside, what makes NextGen TV so attractive (at least to survey participants)? ATSC 3.0, which is the technical name for NextGen TV can deliver 4K HDR video, enhanced dialog, on-demand viewing options and better overall reception, all for free (if you have an antenna) and is now available in 46 US markets, which is said to cover roughly half of the US. That said, there is a catch. You need to have a TV that can receive ATSC 3.0 signals, otherwise you remain with the old standards that have been around for years. A number of TV brands introduced ATSC 3.0 compatible TVs at CES 2022, with China’s Hisense (600060.CH) being the first Chinese brand to join Samsung and LG (066570.KS) in providing ATSC 3.0 tuners in their TVs.
That said, when we said TVs, those with NextGen tuners tend to be high end TVs, with Sony (SNE) the only company offering ATSC 3.0 tuners in all of its TV products. Mediatek (2454.TT) has made an agreement with a broadcast industry trade group that will help to bring down the cost of ATSC 3.0 component development but that will not happen until 2023, with much of the momentum in 2024 and 2025, but there are alternatives, such as an external tuner that can accept those signals, even if your TV cannot, although they start at ~$200 and can be a bit difficult to set up, or you can try an ‘OTA DVR’ (~$300) but that has to be hard wired to the TV and would not make the OTA 3.0 signal available to others in the household.
All in, while NextGen TV is eventually going to give a select group of potential users a step up I their TV quality, it is certainly not going to happen overnight and will take a few years before it will become inexpensive and commonplace and while the surveys and data from industry groups promoting the technology will continue to espouse the enthusiasm that participants say they have toward the technology, coverage, cost, and content (there is little 4K OTA content available currently) will make the reality of NextGen TV a bit less than the surveys might indicate. We are all for it, but as always, we are a bit careful about the path toward consumer acceptance. It will eventually help those that cannot afford the myriad of streaming or fiber-based services, but its going to take time before it has real traction.
Estimates for antenna households can be a bit shaky considering that some have both an antenna and other TV viewing sources, but a study done in 2020 indicated that 40% of TV content viewers over the age of 18 reported owning an antenna, which was up from 29% in 2019. This translates to ~48m households based on Neilsen’s (NLSN) 121m TV household estimate for 2021. That same survey indicated that 5% of TV content viewers also indicated that they were planning to get an antenna in the next year and 9% said they were ‘very likely’ to get one after being presented with details of what is called NextGen TV, and another study, connected with a promotional campaign to let potential viewers know about NextGen TV indicated that 40% of consumers were aware of the technology, up from 25% the year earlier. Even more amazing was that the same survey indicated that 74% of those who viewed ads for NetxGen TV were likely to purchase a TV set from the manufacturers mentioned in the ads, up from 60% the year before, although ~30% actually made such a purchase.
Surveys and promotions aside, what makes NextGen TV so attractive (at least to survey participants)? ATSC 3.0, which is the technical name for NextGen TV can deliver 4K HDR video, enhanced dialog, on-demand viewing options and better overall reception, all for free (if you have an antenna) and is now available in 46 US markets, which is said to cover roughly half of the US. That said, there is a catch. You need to have a TV that can receive ATSC 3.0 signals, otherwise you remain with the old standards that have been around for years. A number of TV brands introduced ATSC 3.0 compatible TVs at CES 2022, with China’s Hisense (600060.CH) being the first Chinese brand to join Samsung and LG (066570.KS) in providing ATSC 3.0 tuners in their TVs.
That said, when we said TVs, those with NextGen tuners tend to be high end TVs, with Sony (SNE) the only company offering ATSC 3.0 tuners in all of its TV products. Mediatek (2454.TT) has made an agreement with a broadcast industry trade group that will help to bring down the cost of ATSC 3.0 component development but that will not happen until 2023, with much of the momentum in 2024 and 2025, but there are alternatives, such as an external tuner that can accept those signals, even if your TV cannot, although they start at ~$200 and can be a bit difficult to set up, or you can try an ‘OTA DVR’ (~$300) but that has to be hard wired to the TV and would not make the OTA 3.0 signal available to others in the household.
All in, while NextGen TV is eventually going to give a select group of potential users a step up I their TV quality, it is certainly not going to happen overnight and will take a few years before it will become inexpensive and commonplace and while the surveys and data from industry groups promoting the technology will continue to espouse the enthusiasm that participants say they have toward the technology, coverage, cost, and content (there is little 4K OTA content available currently) will make the reality of NextGen TV a bit less than the surveys might indicate. We are all for it, but as always, we are a bit careful about the path toward consumer acceptance. It will eventually help those that cannot afford the myriad of streaming or fiber-based services, but its going to take time before it has real traction.
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