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Virtual MVPDs Creating a New Narrative for Pay TV

Cord-cutting doesn't necessarily equate to full-blown rejection of traditional bundle 6/09/2017 1:00 PM

It seems the industry is inundated with study after study that implies a battle of good versus evil has developed between traditional linear cable viewers and young, cost conscious cord-cutters and cord-nevers.

There’s no denying that fewer viewers are subscribing to cable packages -- the U.S. pay TV industry just had its worst-ever Q1, losing 762,000 video subs during the first quarter, according to research company MoffettNathanson -- and that viewers are streaming more than ever. A recent Horowitz Research "State of Pay TV, OTT and SVOD 2017" report said seven out of every 10 TV viewers stream at least some of their content through digital subscription video-on-demand services.

Nonetheless, viewers' growing penchant for streaming content doesn’t necessarily equate to a full-blown rejection of the traditional cable bundle. Rather, Horowitz Research senior vice president of insights and strategy Adriana Waterston said, services such as Netflix and Hulu are giving viewers a more seamless and user-friendly way to view programming.

A majority of viewers still want access to the live news and sports programming that the traditional cable bundle provides, along with the binge viewing-friendly digital services: 57% of consumers have both an SVOD service and a pay TV subscription, according to Horowitz’s report, which was presented during the Annual Cultural Insights Forum June 6 in New York.

Waterston pointed to growing interest in new virtual MVPDs such as Sling TV, DirecTV Now and YouTube TV that offer consumers the best of both worlds – bundles of live TV channels at various price points that can be accessed on mobile phones, tablets and computers, as well as the big screen TV.

Three in 10 TV viewers – and 40% of millennials -- would consider subscribing to one of the new vMVPDs, according to the Horowitz report.

“A new narrative is emerging – one that doesn’t pit people who are willing to pay for pay TV against those who cord-cut,” Waterston said. “The new narrative is about those who choose to stay with a traditional provider against those who might choose to go with a new provider offering comparable services in a new way. They all want the perks of traditional providers, but on their own terms.”