nScreenMedia OTT multiscreen media analysis

1-in-6 cancel cable for a vMVPD. The rest cut-the-cord.

US vMVPD summary Q4 2019

44% of vMVPD subscribers say they signed up directly after canceling a traditional pay TV service. However, the rate of growth of these cord-shifters isn’t even close to keeping up with the 6+ million canceling cable, satellite, and telco TV service in 2019.

vMVPD customers skew younger, are happier

There were about 9.3 million vMVPD subscribers at the end of 2019. The top service, Hulu Live, had 3.2 million customers, followed by Sling TV with 2.6 million, and YouTube TV with 2 million.

According to new research from Leichtman Research, vMVPD subscribers skew much younger than traditional MVPDs. Two-thirds of vMVPD subscribers are in the age range of 18 to 44 years. 18% of adults in the 18-44s have a vMVPD service, while only 9% of these over 44 years old have one.

Overall, vMVPD subscribers are happy with their provider. Three-quarters say they are very satisfied with their service. As well, 14% say they are very likely to switch services in the next six months, down from 27% in 2018.

It looks like vMVPD customers are much happier with their services than traditional pay TV subscribers. Sling TV, the first vMVPD service to launch, has consistently received a higher satisfaction rating than all cable, satellite, and telcoTV services. ACSI’s customer satisfaction ratings from mid-2019 gave Comcast Xfinity a score of 57 with the highest-ranking traditional provider, U-verse, receiving a 69. Sling TV received a rating of 74.

vMVPD customers love SVOD too!

Not unsurprisingly, vMVPD users are much likely to use other Internet TV services. According to Leichtman, 95% of vMVPD users also have at least one of either Netflix, Amazon Prime Video, or Hulu. 74% of traditional pay TV homes have at least one of these services, as do 77% of non-vMVPD subscriber TV households.

Overall, 79% of U.S. households have an SVOD or direct-to-consumer streaming video service. 44% have at least three of them.

True cord-cutting reached 5 million in 2019

Where vMVPD user got TV beforeMost people with a vMVPD service switched directly from a cable, satellite, or telcoTV service, according to Leichtman. 44% said they switched from a traditional pay TV provider, and 26% said they had both MVPD and vMVPD. 18% switched from another vMVPD, and 12% didn’t have a live TV provider before they subscribed to a vMVPD.

However, it would be wrong to assume that most people that cut the traditional pay TV cord subscribe to a vMVPD service to replace it. In 2019, cable, satellite, and telcoTV lost 6.1 million subscribers. Over the same period, vMVPD services gained 1.2 million subscribers. In other words, at least 5 million traditional pay TV subscribers truly cut the cord, rather than cord-shifted to a vMVPD.

Are the 5 million cord-cutters rejecting traditional live TV altogether? Some of them may have switched to using free-to-air (FTA) TV. In 2019, the number of households watching FTA increased by 0.5%, or 600,000 homes, according to Nielsen. However, some of the 5 million cord-cutters may have already been watching FTA. It could be that FTA users are more likely to cut-the-cord because they will still retain at least some live TV.

vMVPD usage spikes

One thing that vMVPDs and traditional pay TV providers have in common is dramatically higher usage due to shelter-in-place orders. Sports focused fuboTV told nScreenMedia that sports fans have shifted their viewing to news and entertainment. Daily unique users are watching the service for 6 hours per day.

Sling TV sees a similar spike in news consumption. Warren Schlichting, Group President of Sling TV, told nScreenMedia there had been a 120% in live linear news viewing.

Nielsen reports that TV consumption could increase as much as 60% during the crisis.

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