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Cut the Cord, Plug In an Antenna: It's Prime Time for Subchannels

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Cord-cutters come in all shapes and sizes, but not everyone cutting out the middleman—aka the cable company—from the live linear media consumption transaction is eager or even willing to hand their hard-won additional discretionary funding directly to another middleman, even in the form of apps offered directly by the premium content providers whose channels form the backbone of basic cable.

The reasons why—convenience, catalog, and cost, in that order—should be a wake-up call to our industry.

Let’s first consider the convenience factor. Sometimes it’s just hard to watch linear content on a device other than a traditional television hooked to a cable box. While writing this article, I clicked on a link from Fox.com to watch live-linear Fox content, the same content I would watch if I were a cable subscriber. Instead of video, though, I got a cryptic message: “Sorry there was a problem accessing your video on Fox.com.”

Clicking on a help link brought me to an equally cryptic and highly confusing page, which offered no less than six steps—including restarting the computer, with the helpful advice that “in most circumstances, this ... allows the video to load”—and an additional five steps to consider if I am using Safari as a browser.

If I actually took the time to follow all 11 steps, it would probably take about the same time as would be required to unpack, mount, and automatically program an HDTV digital antenna. If I had taken the time to plug in the digital antenna, though, I might have been as pleasantly surprised as Forbes’ Scott Kramer, who recently reviewed two different digital HDTV antennas from Antennas Direct and Mohu. (One is from a company that says it has enjoyed double-digit compound annual growth in digital antenna sales over the past 5 years.)

Kramer gave a balanced review, stating that he was able to pull in around 50 stations from his rural home between San Diego and Los Angeles. When he watched the content, he was impressed by the quality of over-the-air (OTA) broadcasts of sports content—quality that sometimes surpassed what he found on cable.

The channel-changing speed on the digital antenna, though, left a bit to be desired—it took 4 seconds between channels. Still, 4 seconds is about one-third the time of changing between apps on an internet-streaming set-top box, and the latency of actual OTA delivery is on par with or slightly better than what most cable channels deliver.

Kramer wrote that he got about 50 channels in his review test, with fewer in the evening— albeit at more consistent quality—and more during the daytime. The basic stats from the National Association of Broadcasters (NAB), an organization championing the continued use of OTA spectrum for broadcast purposes, indicate that most digital antennas can pick up channels in a 50-mile radius as long as these paper-thin internal HDTV antennas can be mounted in a window facing in the general direction of television broadcast towers.

That brings us to the catalog question, or what exactly a cord-cutter would watch if a cord-cutter could watch ... whatever he liked to watch.

One reason Kramer received almost 50 channels was due to the rise of what is being called the diginet, which is short for digital networks. These are the subchannel-only stations one finds when programming an HDTV digital antenna. They are designated by the “-2” or “-3” that comes after the OTA station’s channel number. In other words, if the traditional OTA station was Channel 9, the main station would be 9-1, while the diginets would be 9-2, 9-3, and maybe 9-4.

Typically, these subchannels are broadcast in 720p with the understanding that the standard 19.2Mbps that was originally reserved for MPEG-2 Transport Stream (M2TS) single-channel 1080i broadcasts can be subdivided into three 6Mbps subchannels broadcasting in 720p.

Typical cable channel broadcasts hover around 5.5Mbps, which may account for Kramer’s quality perception difference: He was, indeed, more likely watching better-quality (higher-bitrate) content over the air than he’d been used to on his cable television set-top box.

What types of content do these diginets provide? Until recently, it’s primarily been reruns or syndicated content. The major players in this space went by names like Antenna TV, Bounce TV, and MeTV. Most played content like classic Batman episodes, The Beverly Hillbillies, or even The Twilight Zone.

There’s even a CMT alternative called Great American Country (GAC), which was a pre-Trump concept. (It probably didn’t hurt GAC to be associated with that particular New Yorker during the campaign frenzy.) It’s as if The Nashville Network—once it became TNN and was acquired by Viacom—dropped all of the syndicated content mentioned earlier and split into a half-dozen OTA subchannels that all began broadcasting the same thing.

As part of the rush to understand Middle America after the unexpected—to bicoastal elites, at least—election upset in early November, advertisers and ad agencies alike are giving these diginets a second look. An influx of advertising dollars may put these fledging diginets on track to begin offering higher-quality content in the same way that CW and WB morphed into original premium content engines a decade or so ago.

Marc Berman, writing for Campaign, notes this very thing is occurring. As original programming comes to Bounce TV, which has seen an uptick in blue-chip advertisers, Berman notes that an original show called Saints & Sinners had an impressive opening last March with 1.3 million viewers.

“Bounce TV, in fact, bested competing BET among the African American audience in seven of the eight Sunday nights the first season of Saints & Sinners aired last spring,” wrote Berman.

Berman quotes an industry executive who makes the case for the diginets.

“In many cases the audience deliveries for these nostalgia diginets are actually outdelivering many of these networks that have been around forever,” said Robert Russo of RNR Media Consulting. “Even on the local end there seems to be interest.”

Now let’s talk about cost, the final consideration our cord-cutting neophyte might consider when deciding whether to fully cut the cord and walk away from any recurring monthly fees.

The initial cost of an HDTV digital antenna is around $60–$75, and installation takes no more than 10 minutes, based on my experience with setting up an HDTV antenna last year.

There’s also a move afoot to drop the overall cost to zero. A recent “TV Liberation Tour” by NAB, Sinclair Broadcast Group, Inc., and other supporters of OTA digital broadcasting sought to put 300 digital antennas in the hands of consumers from Little Rock, Ark., to Asheville, N.C., to Baltimore. The intent of the road trip was to “inform consumers that they can access dozens of local broadcast TV channels via an advanced digital antenna in high-definition for free,” according to a Broadcast & Cable magazine article.

The question of content cost often comes up when frugal—not cheap, frugal—cord-cutters express the uncertainty of trading a large cable television monthly fee for a series of smaller fees required to stream live-linear, cable-like content.

Not that the cord-cutter would even be able to hand over these multiple small amounts directly to media conglomerates if she wanted to: Several cable-only networks have opted to appease the Charter Communications, Comcasts, and Time-Warner Cables of the world by blocking anyone without a cable subscription from viewing linear “TV Anywhere” content. Some, however, are going straight to the consumer. For example, HBO is letting cord-cutters subscribe to its HBO Now service for a monthly fee, even if they don’t have cable subscriptions.

HBO tends to be a first-mover when it comes to media consumption technologies, and the move from a bundled HBO Go to an unbundled HBO Now represents a path the market should follow in terms of unbundling premium content from the cable television stranglehold.

But the one caveat is that cord-cutters are not likely to warm to the idea of paying incrementally to every content provider to access exclusive or original content, especially when it means they may ultimately face a stack of bills that cost more than they were paying for a bundled cable service.

All of this means 2017 will be an interesting year for prime-time content in search of an online audience. We will likely end the year with at least two content aggregators that—a decade from now, if not before—will look remarkably similar to today’s content aggregation behemoths that we generically call “the cable company.”

[This article appears in the January/February 2017 issue of Streaming Media Magazine as "Prime Time for Prime Time?"]

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