1. vMVPDs To The Rescue

You know how we keep telling you that the “massive wave of cord cutting” is more of a slow-but-steady trickle? 

To wit: In Q3 2022, the biggest MVPDs lost nearly 1 million pay TV subscribers in total, around 8 percent of their total user base.

But… the vMVPDs gained around 1.1 million subscribers in that same quarter. Meaning that Old School Pay TV actually came out ahead.

So why all the doom and gloom headlines? Because if you want to “prove” that cord-cutting is happening you conveniently ignore the existence of vMVPDs.

But that would be a mistake.

Why It Matters

Switching to a virtual MVPD certainly feels like cord cutting.

There’s the whole getting rid of your set top box thing.

And the fact that your TV service is no longer bundled in with your internet as part of a “triple play” package.

Your streaming and your pay TV are no longer accessed via separate devices, which generally means you can scale down to just one remote.

vMVPDs are also still considerably cheaper, even with their recent price hikes.

So it all feels pretty liberating.

But the reality is it’s the same old school linear pay TV you’ve been getting since the 90s, only delivered via a different pipe.

Or as someone put it to me the other day, does it matter if your Amazon package gets to you via FedEx or USPS, so long as it gets to your house? Are you even aware of how it arrives most of the time?

Exactly.

Now about the vMVPDs. 

They are likely to be a mid term solution. Meaning that for most people, they’re somewhere between a short term solution and a long term one, meaning let’s check back on where those subscriber numbers are in about five years.

Many people, as I have noted previously, actually still like cable TV. And if the vMVPDs can provide them with a cable TV experience (and they do—Hulu and YouTube have close to 100 channels each at this point, pretty much every network anyone would want with the exception of some RSNs.)

Which brings up another reason why vMVPD growth matters: the expectation was that people got vMVPDs in order to keep watching live sports.

But Hulu and YouTube don’t even carry YES (home of the Yankees and Nets) and a number of other RSNs because they’re too expensive. 

Which would seem to indicate there are reasons beyond sports that people enjoy watching traditional pay TV.

What You Need To Do About It

If you are an advertiser, remember that we are still in the Hybrid Era, where the majority of viewers are watching a combination of streaming and linear and that vMVPDs will have a critical role in that period as they will allow viewers to think they are keeping up with the times (tech reporters are not the only ones who call switching to vMVPDs “cord cutting” —many consumers seem to as well) without actually, you know, having to keep up with the times.

It’s not that we won’t get to the promised land of a streaming TV ecosystem populated by SVODs and FASTs, it’s just that there will be much wandering in the desert for 40 years until we do.

(Probably more like 10 to 15 years, TBH,  but boy, will it feel like 40.)

If you are a smaller MVPD and you are looking for a way to offer your clients a white label vMVPD-centric bundle, check out companies like MyBundle.TV, as that is exactly what they are up to these days, making it easy for you to ditch with hassle of the pay TV bundle while still being about to offer it—and the stickiness that comes with it—to your customer base.

If you are a company that does research around TV viewing, I’d love to know what the vMVPD consumer journey looks like: how long do consumers stay with vMPVDs once they make the switch? Do they ever go back to traditional cable?Keep us posted.

A quick word about the math: Google does not break out quarterly numbers for YouTubeTV, But given that the last time Google did give YouTubeTV numbers, it was to tell us that they’d gained 2 million subscribers in the 20-month period from November 2020 to July 2022, or around 300K subs each quarter. We went with a more conservative 200K figure for our guess, which seemed like a reasonable number given that rival Hulu had added 400K subs in Q3, to come to that 1.1 million total.

2. The Real Significance of iSpot/TVision

iSpot.TV, whose recent dealings with NBCU seem to have put them at the head of the alternative currency pack, made a $16 million investment into TVision, a startup whose panel technology promises to give advertisers better insight into co-viewing than you-know-who.

 It was an interesting move for a number of reasons, but the fact that Nielsen is currently suing TVision for patent infringement was certainly the most notable.

Why It Matters

The lawsuit is actually not all that big a deal. Nielsen, like certain ex-presidents, seems to use litigation as a tactic.

If nothing else, it got people to sit up and take notice of TVision and likely gave the company more credibility.

TVision uses an eye-tracking technology to monitor the viewing habits of 5,000 opted-in households across the U.S.

That is less than the 40,000 households Nielsen tracks, but, as per last year’s NBCU “Look Book,” sometimes those Nielsen panels can be as small as 10,000 people. 

Besides which, the new investment should also help TVIsion expand their base.

That aside, let’s turn to the more pressing issues, which is why panels are suddenly hot again.

To begin with, ACR data only measures what’s being watched on the TV, not who is watching it. So knowing which household members actually saw a show or ad (aka “co-viewing”) is key for both advertisers and programmers.

At present, they mostly rely on probabilistic extrapolations, e.g. if there is an NFL game on and a 55 year old male in the house, it is probable that he was watching. Probable but not definite, hence the desire for more precise data.

More than that though, more than just about anything actually, there’s the issue of transparency, something we look at in detail in our upcoming report on Advertising on the FASTs.

“Transparency” is one of 2022’s Big Buzzwords, and has come to basically mean anything about the programmatic sale of streaming TV inventory that drives traditional TV ad sales teams and brand marketers crazy. 

So a lot.

Specifically, it refers to the fact that someone buying traditional linear TV knows exactly where their ads will run, right down to the position in the ad pod.

That is rarely the case with any sort of programmatic buy, open programmatic in particular, where, at best, the brand learns that the ad ran “somewhere on the platform… last week” but since it hit the target, why do they even care where it ran?

That’s TV’s culture clash in a nutshell.

For digital buyers, the goal is to reach the target, wherever that target may be. Banner ads rarely if ever evoke emotion and thus the “where” part is unimportant—hitting the target is key.

TV commercials, OTOH, with their sight, sound and motion often rely on that emotional connection so context—where they run—is very important. 

Especially on TV, where the content itself also invokes an emotional response.

We unpack the whole issue (the above is just the tip of the iceberg) and possible solutions in much more detail in the report, but suffice it to say that having person-based data to back up the household-level ACR data, helps brands feel that they are hitting the right streaming consumers in the right places.

Which is why panels are so hot right now and why you will be hearing a lot more about TVision and its competitors in the year to come.

What You Need To Do About It

If you are an ad buyer and your clients are looking to increase their ad spend on streaming but are wary of how that’s going to play out—if you often hear things to the effect of “I want to know how that’s going to change people’s image of our brand, not how many five dollar razors we can sell!”--then the introduction of persons-based measurement and greater transparency into streaming is going to help.

Ditto TVision’s focus on “attention” (literally and figuratively) as people often use TV commercial breaks as bathroom and snack breaks and thus the ad goes unseen. Knowing who is watching and how actively they are watching are going to be key stats.

If you are a programmatic buyer and you are still new to streaming TV, remember that it’s very different from display, that sight, sound and motion create an emotional connection and that’s not something your software can account for—at least not yet. So it’s not just that your client is being dense or unreasonably old school.

It’s that context matters.

If you are TVision and iSpot, well done. Two companies we think highly of coming together is always a good thing, especially when the stated goal of the deal is one that will help the industry move forward.

If you’re the rest of the measurement industry, I have no doubt you are all working on related solutions. (As in I actually know that you are.) The sooner we can flesh out all that household viewership data, the less client pushback streaming will get, the more money you will all make. 

Random Observations

The “death of late night TV” may have a lot to do with the post-pandemic adoption of healthier habits. In particular, people seem far more aware of sleep, and the value of sleep to mental and physical health these days and so staying up till 1AM to watch a TV show whose highlight clips will be available on YouTube the next day anyway will have less and less appeal. That, or I’m just getting old.

The fact that none of the social media/tech giants have tried to roll out any sort of Twitter-like feature to take advantage of the turmoil seems to speak to the difficulty of fixing that platform. Because if it was anything other than Very Difficult, there would at least be rumors of someone else (Meta, Google) toying with the idea.

Asking Google “Where can I watch X?” is still the easiest way to find many shows and movies. Too many streaming services are so caught up in micromanaging their own data and not letting their OEM hosts steer consumers to their shows that it hurts the overall user experience. The questions we’re looking at is how much does this actually bother consumer and, if it does, who do they ultimately blame?