In the ever-changing world of delivering video to TVs and homes, real bellwether moments can sometimes slip by us. But the appearance on the scene of the awkwardly named vMVPDs (virtual multichannel video programming distributors) could well be such a moment. These “skinny bundle” services offer a variety of broadcast and cable networks via on-demand streaming -- and at least some channels are available to stream “live” when broadcast.
The potential of this new OTT wrinkle is huge. Delivering live programming and events as they happen has been a key differentiator for traditional pay TV services as they try to fend off streaming service providers. Now, services like DirecTV NOW, Sling TV, and PlayStation Vue can begin to offer competing live programming – the opening of a potential floodgate in video media.
We measured vMVPDs for the first time this year in our long-running The Home Technology Monitor™. The new Ownership and Trend Report shows that 3% of TV homes subscribe to one of the vMVPDs listed above. (It was too early to measure either Hulu with Live TV or YouTube TV).
Now, three percent may seem like a “blip” if there ever was one – but every real innovation has to start somewhere. And this one in the media industry has definitely found to be worth watching.
That is why we decided to collect additional information on vMVPD homes -- but, as there were only 82 of them, consider the following to be directional findings, not definitive. Looking at those homes which report DirecTV NOW, Sling TV or Playstation Vue subscriptions, we find very similar levels of adoption among the three – there is not a dominant player at this point in time by any means.
Perhaps most interesting is where these vMVPD homes came from, in terms of reception. A small minority – just one in six – of these homes were “uncorded” before subscribing to their vMVPD service. Half cancelled regular pay TV service. And almost exactly one-third report they also have “regular” pay TV service. And all report having a TV set and almost all say they stream to a TV set in some manner. Thus the vMVPD home is far from the cord-cutting, TV-less home some may have expected.
However, if one counts vMVPD homes in the same bucket as “pay TV” – something on which there was not a consensus from our Home Technology Monitor subscribers – then the pay TV home decrease is offset, and its level holds relatively steady compared with last year. This is a definite silver lining in these difficult days for cable networks, if not their traditional MVPD partners.
vMVPDs with live TV will likely remain a hot topic in 2017, as additional competitors join in -- whether streaming-first brands (Hulu and YouTube) or, as rumored, traditional MVPD services. These services are banking on consumers accepting a smaller selection of networks and the promise of an improved viewer user experience compared with traditional providers.
While vMVPDs will certainly be of interest to a sizable viewer niche, expansion outside the obvious Cord Cutters/Cord Never targets will require a high level of consumer satisfaction and the ability to deliver desired content. People may have many complaints about their interactions with their cable providers and their costs, the actual delivery of television to the home by pay TV tends to be very reliable – which can’t always be said for video streaming. We also see many local TV markets are still unserved by the new “live TV” streaming from broadcast networks because of affiliate agreements – the network O&Os are available, but availability outside of those markets is still sparse.
But these are still early days, and several more years will likely be needed to accurately assess the long-term traction of vMVPD-type services. With several notable players all in on vMVPDs (Hulu, YouTube, AT&T, DISH and Sony) and several notables sitting it out (Amazon, Apple), it will certainly make for an interesting period for researchers, competitors and consumers.
Get similar insights – and many more – as soon as they get published by subscribing to The Home Technology Monitor in 2017. Aside from our annual Ownership and Trend Report, our report topics this year include Commanding Media (voice commands), Over-the-Top TV, TV Everywhere and SVOD Digital Purchase Journey.
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