Channel Master's DVR+ integrates over-the-air and online content into a pay TV-style channel guide.
NEW YORK Television viewers are starting to get back to their wireless roots. As if traditional pay TV companies don't have enough headaches from all the new over-the-top upstarts such as Sling TV and Sony's PlayStation Vue not to mention HBO Now's recent debut on Apple TV devices the nation's cable, satellite and telco TV distributors have another new over-the-top threat to contend with: TV antennas.
Make no mistake: These offerings aren't your grandfather's rabbit ears. Companies with high-tech, futuristic names like Nuvyyo and Mohu are jumping into the game, along with TiVo, ChannelMaster, Tablet TV and Simple TV, all of which are combining state-of-the-art digital antennas with over-the-air digital video recorders.
New DVRs can snag content from over-the-air TV stations, the Internet and from subscription over-the-top services like Netflix, Hulu Plus and Amazon Prime Instant Video. Cobbled together, free broadcast TV and an online video-on-demand service offer a viable alternative to increasingly expensive pay TV packages.
Digital video recorder pioneer TiVo is probably the most well-known name to enter the space it launched its OTA Roamio product last year and has since debuted a $49.99 version that allows customers to watch and record HD-quality broadcast stations, streaming video and subscription VOD.
In February, Roamio introduced a One Pass feature that allows viewers to track every episode of specific shows they want to catch up on and display them in a My Shows folder. Roamio also includes the intuitive TiVo guide and requires customers to pay a $14.99 monthly fee for storage and guide usage.
Other offerings from Mohu, Nuvyyo, ChannelMaster and Simple TV pair up desktop-size HD antennas that can draw in as many as 40 or 50 digital over-the-air channels in high-quality HD, with DVR capabilities and access to online video and over-the-top subscription services like Netflix, Hulu and Amazon Prime Instant Video, with hopes of extending it to HBO Now, Sling TV and Sony PlayStation Vue.
WHO'S THE AUDIENCE?
While choices continue to grow, the burning question for OTA companies will be just which demographic they are targeting, Telsey Advisory Group analyst Tom Eagan said.
What is the demographic and psycho-graphic of those viewers: Are they willing to pay for a box and a monthly fee? Eagan asked. I think that the TiVo OTA device has potential, but the question is, how many of those 10 million [cord-nevers] will pay?
For that reason, Eagan believes cable operators are safe for now.
I don't think it puts pressure on the MSOs because they don't serve those viewers anyway, Eagan said. But it could serve to add marginal revenue to the programmers which they'll need with the squeeze we expect due to operator consolidation.
The idea is that cost-conscious viewers can significantly slash their pay TV bills by combining free over-the-air service with one or several OTT offerings. While the viewer won't get all the channels they get on cable and will still require a standalone broadband service for the online-video offerings they can get most of the programming they want for a much-lower price.
For example, while a traditional expanded basic-cable package can cost about $75 per month for 150 channels, a consumer with an antenna (with a one-time equipment cost of $49.99 to $149.99) and a Sling TV subscription ($20 per month for around 20 channels and counting) will spend less than half that amount.
Over-the-air transmission is nothing new it was TV's original delivery method more than 70 years ago. But gone are the bulky and unattractive rooftop antennas and the unwieldy set-top rabbit ears that dominated the space for years. In their place are sleek, small and unobtrusive antennas that don't look out of place on a bookshelf or mantle. And when coupled with an over-the-air digital video recorder and an online subscription video-on-demand service, they can offer an attractive alternative to traditional pay TV service.
There are about 12.6 million U.S. homes that watch only broadcast TV, according to Nielsen, versus about 100 million homes that have some type of pay TV subscription. And despite the free nature of OTA, getting access to subscription video-on-demand still requires a broadband connection. In most areas, that means maintaining a relationship with a cable or telco broadband provider.
Pay-TV operators have responded to the competitive threat with attractive bundle pricing: Comcast offers a package of 140 video channels and 25 Mbps Internet service for $79.99 per month for one year (rising to $121.90-$136.90 after the first year). The non-promotional price of standalone broadband can cost about $66.95 per month, making the bundle the better value.
But as consumers grow more frustrated and programming packages become more flexible, the pairing of over-the-air service with skinny video could become more compelling.
In the same way that we've seen an enormous fragmentation of the channels people watch, our view is that over the next 20 years, we'll see a similar fragmentation in the platforms they use to watch these channels, TiVo Chief Marketing Officer Ira Bahr said.
WEB COMPLEMENT
Free OTA television makes an ideal partner with emerging over-the-top subscription video services like Dish Network's Sling TV (which brought ESPN outside of the traditional programming bundle), Sony PlayStation Vue and existing services like Netflix, Hulu and Amazon Prime Instant Video.
You take an over-the-top service whether it be either Apple or Sony or Sling TV or whatever, it really doesn't matter and you marry it with over-the-air signals; that's going to be a powerful proposition for m
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Channel Master's DVR+ integrates over-the-air and online content into a pay TV-style channel guide. 
