NBCU’s Burke ‘Skeptical’ That OTT TV Will Thrive

Says new entrants have not had ‘material’ effect on NBCU's business

Virtual MVPDs are spreading like wildfire these days, but a top programming exec isn’t convinced that they’ll scorch the market.

“It’s a very tough business,” Steve Burke, CEO of NBCUniversal, said Thursday on  Comcast’s Q2 earnings call. “As we’ve said before, we’re skeptical it’s going to be a very large business or profitable business…they’re off to a slow start.”

Those new entrants are adding subs, but not enough of them to overcome the losses in the traditional pay TV business.

Earlier this week, for example, AT&T said DirecTV Now, its virtual MVPD service, added 152,000 subs in Q2, but lost 351,000 “traditional” video subs (DirecTV satellite and U-verse IPTV).  DirecTV Now is competing in the sector against other OTT players that include Sling TV, YouTube TV,  PlayStation Vue, and fuboTV.  Notably, the latter two recently cut deals with the National Cable Television Cooperative, a group that represents tier 2/3 cable ops. Those deals could help those operators counter the pay TV cord-cutting trend by offering a video product option that appeals to broadband-only subs.  

“The over-the-top services that have been launched so far are doing about as we expected they would do, and that is they're not all that material to our business,” Burke said.

But NBCU has “very favorable” deals with all of those new OTT entrants, according to Burke.

“From an NBCU point of view, if someone goes to an over to the top provider, it's actually slightly better,” he said.