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Most Cord-Cutters May Be OTA 'Opt-Ins': GfK Research

About 21 million homes rely on over-the-air TV, according to the latest data from GfK Media's (Knowledge Networks) "Home Technology Monitor" report.

That is 17.8% of all TV homes, compared with a consistent 14%-15% over-the-air only percentage for each year since 2008, according to GfK.

Those broadcast-only homes continue to skew lower-income and minority, but also younger households, the study found. And although cord-cutting has been popularly tied to migration from pay TV to online video viewing, GfK media researcher David Tice, in a blog about the data, confesses up front to be a cord-cutter skeptic, at least to the argument that the flight is from pay TV video to online video.

He says the research shows that over 70% of those who have cancelled pay TV service said it was due to cost-cutting, with cord-cutting because of online alternatives cited by less than 20%.

Tice is not saying that online video options are not an important part of the equation, but said their data does not support suggesting it is a primary driver of cord-cutting.

"So, if people without pay TV aren't necessarily flocking online, what are they doing?" he asks. "With the completion of the digital TV (DTV) transition, homes now have access to an enhanced digital broadcast signal providing much better video and audio quality," Tice blogged. "Another benefit of digital broadcasting is that homes also have over-the-air access to numerous digital side channels, offering a variety of programming in addition to the main broadcast channels."

That is an argument broadcasters have been making for wanting to hold onto their channels in the face of government pressure to give them up for auction.

"Obviously this demonstrates that, contrary to conventional wisdom, over-the-air TV viewership is growing, not declining," said National Association of Broadcasters spokesman Dennis Wharton. "That shouldn't surprise anyone given the pay TV cord-cutting phenomenon. This demonstrates that tomorrow's world will be both broadcasting and broadband and that local TV stations have an exceedingly bright future."

NAB purchased the annual study, which GfK sells to a number of clients, said Wharton, but it did not commission it. Tice confirmed that it has a number of paying clients for the study.

Tice maintains the answer to why the cord is being cut may have to wait until the economy picks up, if it does. "Then we'll see if people maintain their broadcast-only status," he said. "That's when I'll decide if I'm a convert to classifying homes as ˜cord-cutters,'" or, he added, "maybe some new term like ‘cost-cutters,' or even OTA [Over-the-air TV] opt-ins.'"

The online study is of 3,200 households, with a margin of error of 1.5, plus or minus, with 95% confidence. Although the poll is online, it does not self-seclect for online-only households. Instead, it selects a cross-section of the population and those that do not have online service are given a computer and dial-up for purposes of taking the survey.

"We make sure the sample is representative of everyone in the country," said Tice.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.