Commentary

Should Virtual Pay TV Services Pursue Adding Streamers More Aggressively?

The NFL continues to be a big driver for virtual pay TV services -- the likes of Hulu+Live TV, YouTube TV and Sling TV -- especially now, the start of the new TV season.

Last year, at the start of the NFL season, there was a 77% increase in signups for those virtual pay TV platforms, estimated to total around 2.9 million in September 2023. 

The NFL drives virtual pay TV subscriber growth because NBC, CBS, ABC, and Fox continue to air football games on broadcast networks -- key programming content for those virtual pay TV businesses.

All in are in the midst of a decade-long deal with the league. In addition, games also run on their respective streamers -- NBCU’s Peacock, Paramount Global’s Paramount+, and Walt Disney’s ESPN+.

Although cord-cutting will continue, how will packages of TV networks change for vMVPD (virtual multichannel program distributors) in the future?  

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Hulu+Live TV, YouTube TV, DirecTV Stream and Sling TV exist in the same internet-space as those premium individual streaming services like Disney+, Paramount+, Peacock, Hulu, and ESPN+. But that’s where similarity ends. 

Put this into the context of evolving new traditional pay TV bundles (cable, satellite, and telco) which are changing -- increasingly including streamers in those packages for consumers. 

Virtual pay TV providers were long believed to be the saviors of the legacy pay TV system -- helping to stem cord-cutting that has occurred with cable, satellite and telco distributors.

While there has been some growth -- especially for YouTube TV and Hulu+Live TV -- others are now losing subscribers, as cord-cutting has migrated to these platforms. 

Analysts may assume that virtual pay services should act more like Roku or Amazon, or more recently, traditional pay TV companies like Charter, Comcast and DirecTV -- which it comes to bundling traditional live TV networks with that of premium streamers.

This has occurred, to an extent. For example, with DirecTV Stream, you can get Max, Paramount+, MGM+ and other streamers. And of course, on Hulu+Live TV, you can get its sister Disney streamers -- Disney+ and ESPN+.

If the growth curve still exists for YouTube TV and Hulu in future years, one might imagine virtual pay TV services to be more aggressive in following consumers to their pursuit of all things streaming -- all the while hanging onto live, linear TV networks at the same time, especially for live sports like the NFL and news programming.

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