Commentary

As vMVPDs Experience Slower Growth, Where Will TV Consumers Go?

by Wayne Friedman , Staff Writer, October 30, 2018

A day after AT&T's DirecTV Now -- its digital live, linear service of TV networks -- showed slowing business, NBCUniversal says there appears to be a slowing of its networks getting carriage by such services.

Steve Burke, CEO, NBCUniversal, says there is an overall “flattening” of its deals with virtual multichannel video programming distributors (vMVPDs).

Burke was talking to analysts about the growth for NBCU cable networks with regard to new subscribers coming from virtual pay TV providers. Traditional TV network groups have looked to these new services to counter significant cable TV subscriber declines.

AT&T, which had signed up nearly 350,000 new subscribers for DirecTV Now in the second quarter, witnessed a sharp drop to just 49,000 in the third quarter. At the same time, AT&T said it was reviewing the so-called “skinny” bundle offering.

No surprise here. But the bigger question is: What next? These digital vMVPDs were supposed to be the savior of cable networks looking for big customer growth.

Where then, will modern TV consumers go? Head to other non-“premium” digital media video content? YouTube, its original ad-supported video-on-demand platform, is still growing.

Some believed there had been a saturation of all things media. Currently, media consumption is at its highest level. Is that usage “flattening” as well?

Back in August, Dish Network said its live, linear TV network digital service Sling TV was slowing down -- all due to increased competition in the space.

In the second quarter, Dish says Sling TV -- one of the bigger, established digital services -- only added 41,000, to a current total of 2.344 million subscribers.

Media analysts say these providers already operate at slim profit margins -- largely attributable to similar cable, satellite and telco TV networks' carriage costs.

Can these virtual operators really afford to make their packages even skinnier, dropping pricing below a basic package with a price tag of $20 a month?

It's not just a flattening of the market, but a shakeout and more media disruption.

digital, media, tv

5 comments about "As vMVPDs Experience Slower Growth, Where Will TV Consumers Go?".

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Ed Papazian from Media Dynamics Inc, October 30, 2018 at 9:44 a.m.
One place that some consumers are going to forTV content, Wayne, is over-the-air reception. As we will report in "TV Dimensions 2019", due out in January, about 13-14 % of U.S. TV homes now get their content the old fashioned way---a huge increase over the situation prevailing about 7-8 10 years ago when less that 10% fell into this category.
Reply

Marc Schacher from MSS Consulting replied, October 30, 2018 at 2:20 p.m.

In theory it what make sense that cord cutters or cord nevers would use over the air for local stations to supplement their OTT services. No?

Michael Greeson from TDG, October 30, 2018 at 7:11 p.m.

To Ed's point, TDG's research suggests that 15% of broadband households use OTA, not at all surprising given that 22% do not subscribe to a pay-TV service, legacy or virtual.

M Cohen from marshall cohen associates, October 31, 2018 at 2:09 p.m.

Cable is expensive. Over the Top streaming services are inexpensive but you need many of them and that gets confusing. OTA provides LOCAL. And Local is, still, absolutely necessary to consumers. (and hard to measure, BTW).

Paula Lynn from Who Else Unlimited, November 1, 2018 at 9:55 a.m.

Read a book. It is about time, limited time in life. Reading books are way less expensive - see free libraries and can even rent movies. Yeah, it's not as exciting, but it works especially when you exchange that one or two hours a day. It can cut $100/mo or more and when HHI net is less than $1000/mo, it means something. You'd be surprised how many people fall into that category. No they are not in tech.