TV antennae are back!

Although Canada shut down analog TV transmissions almost 10 years ago, broadcasters didn’t stop broadcasting, they just switched to digital. And, according to a survey Deloitte did in January of 2020, so have about 15 per cent of Canadians, or about 5.5 million of us, more than double the number who watched some or all of the TV using an over-the-air terrestrial TV antenna back in 2015. (97 per cent of Canadians live within reach of an over-the-air TV signal.)

If that growth didn’t shock you, then the demographics might. Antenna TV is least popular with older Canadians, and most popular with their children or even grandchildren: although 13 per cent of those 55-plus use an antenna, that number rises to 17 per cent for 18 to 34 year olds.

This matters for Toronto: we’re a big part of the $7 billion 2018 Canadian TV broadcast industry, direct spending on domestic TV production in Ontario was more than $700 million in the same year.

But there’s an epidemic of TV cord-cutting and “cord nevering” (those who have never had cable) going around. As of 2017, 18 per cent of Canadian households either had stopped paying for cable or satellite TV, or had never paid for either, up from seven per cent in 2012. And the number for Canadian households headed by those under 30 was almost 45 per cent.

Based on meetings I had in Toronto in January, dozens of people told me they cancelled the traditional cable/satellite bundle (saving an average of about $60 to $75 per month), self-installed a $30 to $60 digital TV antenna, and get around 25 channels depending on where they live in the GTA, many in full HD, for free, forever. Almost of all of them supplement their antenna TV viewing with a mix of streaming video services such as Netflix, Amazon Prime, Crave or Disney Plus, usually for a combined monthly cost of around $30 to $40.

Why does this matter for Toronto TV broadcasters?

The assumption by many is that millions of Canadians have stopped watching traditional TV entirely, and they’re not coming back. The reality is that they haven’t left TV, they have just changed (distribution) channels.

The first bit of good news for broadcasters is that millions of viewers are still watching some TV, which is better than them not watching any at all. To be clear, overall traditional TV viewing is in decline in Canada: weekly viewing hours fell 6.7 per cent from the 2016-2017 broadcast year to the 2018-2019 broadcast year, with viewing declines for the key 18-to-34-year-old group down 16.7 per cent in the same period. But antenna TV is likely helping keep those declines from being even steeper.

The second bit is that the demographics are also good: not only are antenna TV viewers young but Canadians with higher incomes, university degrees and kids are also more likely than average to engage in over-the-air viewing according to our Deloitte survey.

The third bit of good news is that antenna TV viewing is actually better for those trying to sell ads than cable, satellite or telco TV distribution. In all of those systems, there is a set-top box which almost always includes a PVR for recording shows and viewing them later. Nothing wrong (from a broadcaster’s perspective) with time shifting video — unless viewers use the fast-forward function to skip ads.

In contrast, most antenna TV viewers don’t own or use recorders, meaning that almost all of the ads are seen, not skipped. “In the U.S. in 2019, cable viewers watch 14 times more minutes of recorded TV than antenna viewers, which means they skip many more ads than antenna viewers who watch almost everything live.”

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By the way, antenna TV isn’t just a Canadian thing: two billion people globally get some or all of the TV over the air, more than any other way of getting a signal. Further, that number is growing in countries other than Canada: up by almost half since 2011 in the U.S., and there are 11 million homes in the U.K. that only have antenna TV, many of them also with subscription video on demand (SVOD) services such as Netflix.

Growth in TV viewing via an antenna is not a panacea. Traditional TV is still losing ad share to digital ads, although it is growing very slightly (about one per cent in Canada in 2020) in absolute dollars. But up one per cent is better than down, and broadcasting owes at least some of its relative resilience to antennas. They are like a lucky rabbit’s foot. Or perhaps rabbit ears.

Duncan Stewart is the director of research for tech, media and telecom for Deloitte Canada.