TECH ONE ON ONE WITH RICHARD SCHNEIDER

Why TV Antennas Are Sexy Again

The owner of Antennas Direct turned a hobby into a $10 million-a-year business supplying TV antennas to the steadily increasing number of consumers who are dropping cable for free over-the-air TV. He's bullish on OTA and can't understand why the FCC now wants "to kill it in the crib."

Richard Schneider is no broadcaster, but he may be the most ardent champion of over-the-air TV in the country.

And it shouldn’t come as a surprise. He makes and sells TV antennas. For broadcasters, the ability to beam TV directly to viewers without wires is an edge. For Schneider, it’s everything.

Seven years ago, his hobby of building TV antennas “spun out of control” and into a business. Today, he says, his St. Louis-based Antennas Direct, has $10 million in annual revenue and is growing fast, thanks to America’s rediscovery of over-the-air broadcasting and what a bargain it is.

In this interview with TVNewsCheck, Schneider explains why the TV antenna is the “hottest selling device” for digital video and wonders why the FCC is bent on “committing infanticide” by taking spectrum away from broadcasters.

An edited transcript:


How are sales going?

BRAND CONNECTIONS

It’s actually accelerating. In fact, November was the best month in the history of our company. We topped the amount of units shipped in June of 2009 running up to the digital transition.

How many units do you expect to sell this year?

We will probably be just around the half-million mark. We started online, but now sell mostly through retailers, including big box stories like Best Buy and CostCo.

That’s a lot of antennas.

My goal when I started this was to sell maybe 20 units a month so I could pay for my home theatre hobby. It would be a self-funding hobby and my wife wouldn’t find out how much I was spending on an HDTV projector.

And what do you think is going to happen next year?

We have some other large nationally known retailers that are evaluating our products. If even a percentage of those come through, we think we can grow another 30% for next year.

That’s another 150,000 units.

At least.

What’s the overall market for antennas?

We think the antenna market is anywhere from about four-and-a-half million to six million units a year and we believe that’s growing around 20%-25% percent annually. In dollars, we estimate the market to be roughly $250 million in annual sales in the U.S. We’ll do around $10 million.

And you think that that will continue.

Yes, because here’s where our opportunity is: 80% of the population doesn’t even know you can get over-the-air HDTV. You tell people and they look at you like you’re crazy: “You’re saying I can actually get free HDTV from an antenna?” It’s shocking to a lot of people. So we see this as a great opportunity. Our biggest obstacle isn’t other antenna manufacturers. It’s the fact that most people aren’t even aware that this is an option.

Who is the biggest player in this space?

Well, probably in terms of unit volume, I would say Audiovox . It sells under the names of RCA and Terk. They have a fairly good selection of indoor antennas.

Are there places where antennas are selling faster than the average?

Areas where there’s lots of multicasting are helping to drive a lot of the sales. That’s mostly large markets on the coasts, Los Angeles and the Northeast. As much as I hate to say this, HDTV is secondary to multicasting in driving sales. And in these areas, you can not only get a lot from your market, but potentially from neighboring markets.

What can you tell me about the people buying these antennas?

There’s a perception that it’s the elderly or the indigent that are buying them. But we’re seeing quite a big growth over the last 18 months among younger people, meaning people in their 20s or 30s. They’re using it as a supplement to pay TV or, more frequently lately, as a supplement to broadband.

What they call over-the-top TV?

Yes. We were actually nervous when the Hulu service started, thinking, oh, this is going to be another kind of competitor for us. But what’s funny is, as soon as that service started coming into its own, our phone lines started ringing with a decidedly younger group of people saying, hey, I have decided to cancel my pay television, I am getting what I want from Hulu or Netflix in terms of premium content and I want to get my local live content from an antenna. We noticed this about 18 months ago. People see digital TV as a new technology, a new service. It’s really now becoming a viable supplement to the broadband offerings. It’s given people the rationale they need to cancel pay television.

Let’s talk about the technology a little. Is there anything really new in this space or are we just marketing different sizes for different places?

Antenna design has been a lost art. There really hadn’t been much done in over-the-air antenna design in 35 years. But what we now have is new testing and simulation tools and analytic devices that didn’t exist even three years ago. So we can actually now run through thousands and thousands of iterations of geometries fairly quickly, a process that would have taken months, if not years, 25 years ago. A lot of this has come out of the defense industry.

So, there have been a lot of advancements. We have been able to make antennas much smaller than before and much more reliable, more resistant to interference and much more efficient than something that might have come out five or 10 years ago.

They’ve also been herding stations into the upper VHF and UHF bands. That has made our job a lot easier because when you’re designing antennas for a narrower set of frequencies, you can make them more effective and more powerful and also have better luck in rejecting interference.

What about the VHF band? Is there anything that can be done to improve performance there?

We came up with a new antenna for high V called the ClearStream5. It’s a loop in front of a wire reflector tuned for chs. 7-13. We have had fairly good results with that. Low V is actually a lost cause. We do have a couple of antennas for low V, but there are so many obstacles on the low V band that there’s really nothing we as an antenna manufacturer can really do to overcome that.

As a matter a fact, we’re developing some new amplifiers with filters that actually block out low V and we’re finding we get much better noise performance and overload resistance. We’re thinking of maybe extending that not just to all the amplifiers, but maybe even to the antennas themselves, filtering out anything below ch. 7. We’re finding that we’re delivering a lot less interference and garbage to the tuner by doing that.

What do you think of the FCC chairman’s push to shift 40% of TV spectrum to wireless broadband?

The FCC is about 180 degrees from what is going on in the marketplace. We’re kind of baffled at why they’re committing infanticide. The digital transition was one of the most successful initiatives undertaken by the government and now they’re going to kill it in the crib.

They are completely out of step with the realities of the marketplace. We visited the FCC and we were met with a lot of skepticism when we explained how popular over-the-air was. We invited them to come out to our warehouse and see all of the shipments that are leaving the dock. One staffer mentioned, “Well, I don’t watch over the air” and his peer group doesn’t either, implying no one in the country does, as if they’re representative of the country.

Do you think TV stations do enough to promote over-the-air TV?

No, I really don’t. A handful do get it, but I think there’s a number of them that don’t realize what percentage of their viewership actually does get their signal over the air. That number has been undercounted for years. We have gone to some stations, partnered with them and have handed out antennas to their viewers. Their station managers were surprised at the turnouts that they have gotten. Sometimes thousands and thousands of people have shown up for a chance to get 100 antennas. It’s opened up some eyes among station managers: “Wow, I didn’t realize that this many people weren’t getting our signal over the air.”

You know that broadcasters now have an incentive not to drive viewers to antennas because they get a share of the cable money through retransmission consent.

Yes, we’re aware of that and so we’re not trashing the cable providers. But there is an inexorable movement away from pay television to broadband. This shift is happening regardless of whether we promote over the air or not and some stations do appreciate having a good percentage of their viewers — a healthy percentage of their viewers — over the air. It gives them a little bit better contract position when carriage fee disputes go on.

How would you like to sum this up?

What we’re trying to do is overcome the perception that over the air is in a state of decline. People are surprised that antenna sales have accelerated since the digital transition. The irony is that in the broadband age the hottest selling device for digital video is a TV antenna. I don’t know what it takes to get the word out: the best picture quality now is over the air.


Comments (24)

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Elaine Scharfenberg says:

December 9, 2010 at 12:15 pm

On one hand the FCC says their is a spectrum shortage and needs to compact the band and take back frequencies. On the other hand, they say their are unused channels that unlicensed transmitter services can use (Whitespace). Which is it? This is part of the problem as well for it seems politics is determining spectrum policy and little else.

Ellen Samrock says:

December 9, 2010 at 1:38 pm

What?! You mean FCC staffers don’t watch any FOTA television and yet they regulate our industry? Well, that explains much of the lunacy behind the TV spectrum take back proposal.

    Cassandra Hamilton says:

    December 10, 2010 at 3:40 pm

    Exactly. They look down on OTA users as poor people who do not matter. The possibilities of multicasting and Mobile/Handheld are lost on them.

Christina Perez says:

December 9, 2010 at 1:51 pm

I’m surprised Antenna Direct’s tag line isn’t this: “Free HD with every order.” This piece is the most important item I’ve read recently in any TV trade pub or site. Schneider’s depiction of the FCC as out of touch and elitist should be enough to generate a congressional investigation into possible conflict of interest and backroom dealmaking.

People are churning off cable like never before, for precisely the reasons Schneider enumerates. The unstated fact is that broadcasters doing multicasting should be able to generate new revenues that far exceed any retrans payments.

Technophobes may stick with cable, but the trend in this difficult economy is clear: Broadband for on-demand premium programming such as movies and commercial-free high-end series; and ad-supported broadcast TV for the mass audience. The second renaissance of OTA is upon us, and this brief interview signals its coming. Let me end with a plug for those little hand-held 4-inch DTV sets, which deliver great performance out in the field with no cellphone video charges, as long as the viewer stands or sits relatively still while watching (which most people do anyway…).

    Cassandra Hamilton says:

    December 10, 2010 at 3:48 pm

    This is the shame of the dummies who developed the ATSC standard. We were watching NTSC OTA in the Mobile/Handheld market for years. We were using small INDOOR antennas for NTSC OTA. How could they develop an standard for a 120 inch long antenna mounted 30 feet in the air to be used with DTV? We need the DTV Mobile/Handheld devices out quickly to show that OTA can deliver some of the convinience OTA used to.

Karen Matthews says:

December 9, 2010 at 3:08 pm

The article is great, but it fails to mention that FOTA HDTV quality surpasses both cable and satellite services, if you were able to compare absolute video quality, then you would see the artifacts of their compression of even the OTA services.

Rick Ruth says:

December 9, 2010 at 3:22 pm

Jim, did you read the last line of the article?

    Christina Perez says:

    December 9, 2010 at 3:56 pm

    FCC, CONGRESS, TAKE NOTE-A:

    THE PEOPLE WANT THEIR FOTA!

    WHY WON’T GENACHOWSKI SEE…

    THE BEST HDTV IS FREE!

    BEFORE BROADBAND STEALS THE SHOW

    THE G-MAN HAS GOT TO GO…

    mike tomasino says:

    December 9, 2010 at 5:49 pm

    Nice rhyme Philly!!!

Ben Gao says:

December 9, 2010 at 5:00 pm

Infantcide – what a great way to describe the non-engineering lawyers that sit in the ivory tower at The FCC. And the FCC is 270 degrees from what is going on with Free OTA TV. I get artifacts on digital cable, but my attic antenna looks pure and clean HDTV. My only comment is that he should keep not only channels 7-13, but include an antenna that will ALSO receive the FM broadcast band – which may or may not be increasing interference. What about the FCC push to use the absolutely POS Channels 2-6 for HDTV? They are smoking something. Let broadband and the cellphone lobbyists play with that useless POS chunk of bandwidth, or give it to the FM broadcast band, because it’s worthless for HDTV. Also, there’s a ton of US Government frequencies that the wealty cellphone industry can buy instead of stealing what belongs to the people!

michaela radziszewski says:

December 9, 2010 at 5:14 pm

Mr. Schneider is right on with his comments. Our sales have increased by 300% and growing. I don’t think the FCC has a clue as to what is going on out there. In the last few years the antenna customer has become younger and is more tech savy. They’re looking for an alternitive to pay TV. Most people don’t even know free TV exist. It’s the best kept secret around.

Denny Duplessis
TV Antenna Source
http://www.dennysantennasrvice.com

    mike tomasino says:

    December 9, 2010 at 5:51 pm

    I think thats: http://www.dennysantennaservice.com

    Christina Perez says:

    December 9, 2010 at 7:22 pm

    The marketing of free TV is virtually non-existent. People pay a premium for OLED and 3D HDTV, then they unknowingly acquiesce to cable-compressed reception that pales in comparison to OTA. We still have Comcast cable, but I routinely switch to the OTA bowtie I discreetly installed inside a window screen. Thing is, I only can get WPVI-TV Channel 6 Philadelphia on an upstairs set. I read somewhere that Ch. 6 actually wanted to stay on its traditional VHF channel for marketing purposes — which makes no sense at all, since the DTV tuners automatically seek out channel assignments regardless of the flagship number. I estimate that WPVI-TV would increase its audience share by at least 5 percent if it won the right to return to the UHF channel that it occupied during the DTV transition. While it may not seem related, the campaign to kill OTA is another good reason why broadcasters should vigorously oppose the Comcast-NBCU deal. Make no mistake, Comcast’s ultimate goal is to make all TV, pay TV.

Amy Warren says:

December 9, 2010 at 9:01 pm

When we will see FOTA internet, with some range and coverage area like FOTA TV?

Patricia Kehoe says:

December 10, 2010 at 9:16 am

Great success story on a great company. Got two of their antennas in my attic and I get a dial full of Atlanta stations 70 miles away. The FCC is a huge roadblock to common sense and capitalism. Why don’t they talk to the viewing public who’s embracing OTA as a way to experience HD and multicasting? Too many folks in DC without a clue of the real world.

Joel Ordesky says:

December 10, 2010 at 9:47 am

Fantastic story! Richard is right on with everything he said. The irony of this is that the broadcasters who have the most to gain (namely more reach into their DMA) are in the best position to promote FOTA, and they’re NOT DOING IT. It pains me to go to a broadcaster’s website and find little or no help in getting their signal over the air, but on the same site seeing banner ads for cable or satellite companies. Broadcasters should advertise their FOTA product on the air, and provide assistance to people who want to learn about FOTA. Their websites should include sources and recommendations for antennas, signal strength and a list of qualified installation companies that serve the DMA. This is critical to the survival of broadcasting as we know it. A broadcaster without spectrum is no longer a broadcaster!

    Christina Perez says:

    December 10, 2010 at 10:02 am

    Dave Walton for President (of NAB)! Smith sounds like he’s sipped the Kool-Aid on spectrum auctions…

Dave Buckowski says:

December 10, 2010 at 10:07 am

Having spoken with Richard several times his passion for OTA comes through load and clear (pun intended). We also can confirm what he is stating as our business has also seen an increase that coincides with the decline of “subscription services”. That being said the “industry” is trying to suppress these statistics as there are certain “players” that do not want the general public to know what the spectrum grab is really all about. It is being masked as these frequencies are needed for the American public for broadband use, and if we don’t get them we can no longer progress as a society. If the Amercian public truly understood the meaning of the real spectrum grab there would be more publicity on this, but as of now 75% or more don’t even know FREE TV even exists. You will begin to see more publicity on multiple fronts as we continue to spread the word along with RIchard and others who join in, and will not go down easy. As they say we have only just begun to fight. Please help both Richard and I by supporting our companies as we take this fight and message to the American public on the alternative to “pay” television. Brad Eckwielen. President/DigiTenna, LLC http://www.digitenna.com & http://www.watchvii.com

    Ellen Samrock says:

    December 10, 2010 at 11:47 am

    Unfortunately, all the attention and press has been focused on net neutrality and retrans. This has to change. The TV spectrum take back proposal is just as serious an issue as the others, with potentially devastating consequences for consumers. The time to get the word out on this has passed.

james mauritzen says:

December 10, 2010 at 3:12 pm

In conducting some OTA DTV measurments in the Hi VHF band, measurments base upon SNR only, there are incidences where the FM signals decrease the DTV SNR readings below the cliff edge of ~ (<15.1 DB). It would be handy where a FM trap could be switch in if needed to be.
The wire & satellite providers have done a great job of selling the public on HDTV reception thru their systems. Sure would be nice if there was a demo between OTA HDTV & Wlre line sat HTVD.

Sandy Gullion says:

December 10, 2010 at 3:57 pm

My one and only problem with Richard Schneider and Antennas Direct is that he has turned me onto a such a new and interesting hobby that I occasionally neglect other, more prosaic things! 🙂

Prior to the DTV transition, this former radio guy didn’t give a hoot about OTA television. But with my 91XG (UHF) and C5 (VHF) duo from Antennas Direct, RF has again become quite fascinating to me. In fact, I even got a Sencore signal analyzer to observe BER/MER values and see the waveform on the spectrum analysis. There are sometimes when the signal analyzer is more compelling than the actual programming. 🙂

In particular, the C5 is a most impressive accomplishment. It’s light and actually quite tiny compared to larger yagis — yet it meets or beats its larger cousins in the VHF comparison testing I’ve done.

Kudos to Richard and others who are making a most compelling case for broadcast television and for those fighting the good fight against the spectrum grab.

Brian Bussey says:

December 10, 2010 at 4:58 pm

The broadcast groups, under siege from “visionless” bean counters, should be using retrans dollars to populate their sub channels with movies. Their domination of viewer shares would continue and increase. Of course the bean counters refuse to look out farther than 3 months so the logic of building a second audience essentially for free is lost on them. They are to scared of losing their new found revenue stream.

g h says:

December 11, 2010 at 1:05 am

We still live in an Analog world, since all the Satellite transponders, Cable Amplifiers, and HDTV (8VSB) transmitters are Analog devices. The signals they provide are analog representations of digital signals. Same is true of DSL and Cable Modems. Now originally HDTV was pristine when it used the full Bandwidth of a DTV Transmitter, about 19.4 mb/s and now we see broadcasters compress their HDTV down to as little as 9 mb/s. We even see Broadcasters run 6 Standard Definition Channels on one channel with poor video quality programming, when that should look fairly good with good quality source material. By the way HD radio “Digital (Again Analog really) FM” was ruined when the encoder manufacturer reminded Broadcasters to compress the pristine sound, again depending on source material, of HD Radio so it sounded exactly like the old Analog FM signal, so when the receivers switched between modes as in fringe areas it would not annoy listeners. Wow, how we can take a good thing and screw it up consistantly amazes Me.

John Wolfe says:

March 25, 2011 at 9:24 am

Richards.. I would like to help you with your campaign… Let me know how I can reach you. I have stations and would be great if we can run a spot educating the viewers?


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