Hulu and Sling Are Winning The vMVPD Wars
The vMVPD market is continuing to boom (well, with one notable exception) and the latest stats from one of the only sources we actually trust on this, Moffatt Nathanson, has the total market at about 9 million subscribers, many of whom are counted as “cord cutters” by those less familiar with the television industry. (See what we did there?)
The big winner seems to be Hulu Live TV, which Moffatt Nathanson has at around 2.7 million subscribers, with Sling close behind at 2.69 million and YouTube TV in third place with 1.6 million.
Why It Matters
I’m not just a fan of Hulu Live TV, I’m a customer and the reality is it’s a damn good service. As in I am not aware of having given anything up as a result of having switching from MVPD pay TV, and, even with Hulu’s $10 “boil the frog” price increase this month, I’m still way ahead of what I was paying for set top box TV.
Hulu Live TV has a great interface that has learned to intuit what I want to watch, and, with over 80 channels, including all the major network groups, there’s nothing other than PBS that I want to watch that I can’t get access to. Plus I get SVOD Hulu included in the price, and Hulu is getting even better now that FX is going to be a part of it.
So there’s that.
It’s also worth noting that Sling and Hulu offer opposite ends of the vMVPD experience—Hulu is a “mesomorph” bundle with every major network group represented, plus my local RSN.
Sling, OTOH, is a relatively skinny bundle that’s missing CBS and the CW and a number of other options.
That’s right now.
We suspect that as the Flixcopalypse unfolds, viewers will start to push back against their cable bundles, given that they’re (a) spending a lot of money on said Flixes, and (b) they’re no longer watching most of the channels they are paying for.
That behavior will likely force vMVPDs and MVPDs to offer super-skinny bundles consisting of just the four major broadcast networks.
News channels and RSNs can be bolt ons which viewers can subscribe and unsubscribe to as needed. (e.g., you might only want an RSN during basketball season or a 24 hour news channel in an election year.)
This development should work to the vMVPDs advantage however, given that their apps can live on viewers Rokus, Fire TVs and smart TV interfaces along with the apps for the Flixes they watch which makes it easier to switch from one to the other. That, and they won’t have to pay monthly rental fees for all sorts of unnecessary set top box equipment.
What You Need To Do About It
If you’re an MVPD or vMVPD, start thinking about what those super skinny bundles are going to look like and how you’re going to negotiate your deals for them.
And once you’ve got that nailed down, think about bundling your pay TV offerings together with whatever Flixes your viewers are subscribing to in order to create a single interface—that’s a plus for viewers and creates greater stickiness too.
If you can get a cut for selling and managing those subscriptions, even better.
If you’re a smaller, less popular cable network, and viewers don’t really know what you’ve got on offer…now is the time to fix that. And remember that moving to a studio model and licensing your programming to one or more Flixes may ultimately prove to be your best move.
2. FASTS Go Even Faster
Lots of news from the FASTS (Free Ad-Supported Streaming TV Services) this week—VCBS-owned Pluto now has 20 million monthly active users (and 3,500 unique brand advertisers), Tubi launched a huge ad campaign (“Not On Netflix”) and is the first FAST to launch on Amazons Echo Show device, while Xumo signed a deal with ABC News.
Why It Matters
The FASTS are still the surprise success story of the year, given that their content offering is pretty much old sitcoms, hit movies from the 80s and 90s and news clips strung together.
That may be a bit harsh, but it’s pretty much what they all have on their home pages, and because hardly any of it is exclusive, there’s massive overlap between their offerings.
In addition to the three aforementioned services (Pluto, Tubi and Xumo) there’s the Roku Channel and Amazon’s IMDB TV.
So a lot of FASTS.
As best we can tell, they’ve done a great job of getting themselves onto the interfaces of smart TVs and streaming devices where people stumble on to them and decide they’d rather half-watch Caddyshack with half as many commercials while they do the laundry than anything they can find on linear TV. (The VOD, start-and-stop-when-you-want aspect of the FASTS can be very appealing.)
And as viewers are paying more and more for subscription services, FASTS are going to prove to be a nice alternative to paying for cable TV.
Something many cable networks ought to bear in mind.
What You Need To Do About It
If you’re one of the FASTS, keep doing things to set yourself apart from the other FASTS, things that help you create a unique brand identity. That can be the state of your interface, the type of programming your have and/or the image your brand advertising creates.
If you’re a minor cable network, the FASTS are your competition. You need to give viewers a reason to want to watch your service enough so that they’ll continue to pay the MVPDs for that privilege. Which is not going to be an easy task.