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Why Old-Fashioned, Over-the-Air TV Is Booming

January 15, 2019, 5:49 PM UTC

About one in seven American households is watching old-fashioned, over-the-air television broadcasts, an increasingly appealing choice for former cable customers who have “cut the cord” but still want to catch up with their local news and network stations.

The new data from market research firm Nielsen shows that over-the-air viewing increased to 14% of all homes last year from 9% in 2010. At the same time, the percentage of households subscribing to cable or satellite TV peaked at 88% in 2010 and has since sunk to 79%, according to surveys by the Leichtman Research Group. Catching free over-the-air broadcasts simply by adding an antenna that cost $50 or less likely appeals to many cord cutters who dropped cable TV because it was too expensive.

But there are two distinct groups watching broadcast TV, Nielsen said. About 40% of over-the-air viewing households watch no other video services from the internet. These households skew older, with a median age of 55, and are less likely to own smartphones and tablets than the average house. Only 27% have children in their home and only 20% have an internet connection and devices capable of watching online video services.

The other 60% or so of over-the-air viewing households also subscribe to online video services like Netflix and Hulu. They have a median age of just 36 and own more connected devices. And 52% have children and 86% have online video accessibility at home. The entertainment industry is rushing to create more options for these viewers, with Apple (AAPL), Disney (DIS), and others expected to debut their own streaming services this year.

The two viewing groups also differ by how much over-the-air TV they watch. Not surprisingly, the homes without online video alternatives watch almost five hours of broadcast TV per day on average, Nielsen said. The homes that also have online video services, by contrast, watch only about one and one-half hours of broadcast TV per day.

Within the group that watches online video, a small but growing number of households don’t watch over-the-air TV, but instead catch their local channels online via services like Google’s (GOOGL) YouTube TV or AT&T’s (T) DirecTV Now. So far only about 1% of Americans, or 1.3 million households, watch that way as of May, 2018, Nielsen said.