The linear pay TV business had its worst third-quarter ever with about 889,000 subscribers cutting the cord, according to an analysis by MoffettNathanson.

Traditional cable, satellite and telco distributors lost 11.7% of their subscribers compared to a year ago.

The new virtual multichannel video programming distributors — such as YouTube TV — are not picking up all of the customers dropping traditional subscriptions, MoffettNathanson found. Only 21.7% of cord cutters signed up for a vMVPD in the third quarter, down from 31% a share ago, the equity research firm said.

That left total linear TV down 7.3% in the quarter, compared to a 5.6% dip a year ago.

“The picture is not one that suggests that a plateau in the rate of decline is coming anytime soon,” MoffettNathanson said.

The cord-cutting dropped pay TV penetration — including vMVPDs — to just 54.8% of occupied households, the lowest since 1989.

MoffettNathanson estimates that YouTube TV is the biggest of the vMVPDs with nearly 7 million subscribers, or about 40% of all 17.999 million vMVPD customers. That total is up from 16.910 million at the end of Q2 and 16.419 a year ago. 

In the third quarter, YouTube TV added 350,000 subscribers, boosted by its acquisition of the NFL Sunday Ticket out-of-market package.

Federal Communications Commission chair Jessica Rosenworcel said Thursday (November 30) that those looking for the agency to start regulating video streamers should look to Congress instead.

Rosenworcel has said before that she does not think the FCC has the authority under either the Communications Act or Cable Act to regulate virtual multichannel video programming distributors (MVPD) and she doubled down on that opinion at an FCC oversight hearing.

She was pressed on that point by House Energy & Commerce Committee chair Kathy McMorris Rodgers (R-Wash.), who wrote Rosenworcel earlier in the year signaling she did not want the FCC to reopen the issue.

Asked by Rodgers if she would commit to not taking any action, Rosenworcel said that while the FCC was combing over the law and considering “adjacent” copyright issues, shr “fundamentally” believes vMVPD regulation is an issue “where those who want us to act will have to go to Congress.”

Democrats on Capitol Hill have pushed the FCC to reopen its 2014 proposal to define some video-streaming services as MVPDs subject to agency regulation.

By contrast, Republicans, including Rodgers and Communications Subcommitte chairman Bob Latta (R-Ohio), have told the FCC to keep its regulatory hands off streamers.

Also Read: Rodgers Warns FCC to Stay in Regulatory Lane

With the backing of broadcasters, who have been trying to get more money for their online content, including by pushing for an antitrust exemption from Congress to negotiate for aggregated news content, Senate Commerce Committee chair Maria Cantwell (D-Wash.) wrote Rosenworcel asking her to revive the 2014 inquiry with a focus on good-faith negotiation rules related to edge provider aggregation of news content from print and broadcast sources.

While the inquiry was revived, its prospects, given the chairwoman’s view, are not bright.

“Chairwoman Rosenworcel was extremely clear again today on the FCC’s ability to regulate streaming services," Bryce Harlow, spokesperson for the Preserve Viewer Choice Coalition, said. “[C]ongress is the only one that can regulate streaming video in the manner that large station groups seek. Her thoughtful remarks reaffirm her prior sentiments and are a win for streaming viewers across the country whose ability to access high-quality and affordable content we’re fighting hard to protect.”

Preserve Viewer Choice Coalition members include streaming power players Hulu, Fubo, YouTube TV, Paramount, Fox and NBC.

Adding an estimated 600,000 customers in the third quarter, YouTube TV ended September with around 6.5 million customers, according to Leichtman Research Group’s quarterly tally of the top pay TV operators serving 96% of the U.S. market. 

LRG’s user-base estimate for YouTube TV seems light to us — another research group, Antenna, just projected that the Alphabet/Google platform has around 7.3 million customers — but either way, it pushed the overall virtual MVPD category past a notable milestone. 

With Hulu Plus Live TV, Sling TV and Fubo all adding customers in Q3, the vMVPD category now controls, for the first time, more than 20% of U.S. pay TV customers.

Google/Alphabet doesn't often break out numbers for its six-year-old YouTube TV service, but depending on whose tally you believe, the vMVPD may have already surpassed Dish satellite TV as America's fourth largest pay TV platform. 

Many U.S. tier 2 and tier 3 cable operators have given up on offering their core broadband customer base unprofitable linear video and instead are directing these customers to YouTube TV under marketing partnership agreements. 

Likewise, during its nearly two-week blackout of ESPN in early September, Charter Communications also directed its football-hungry subs to YouTube TV. 

Meanwhile, LRG’s quarterly pay TV tally includes another key estimate, with DirecTV platforms said to have lost another 500,000 subscribers in Q3. 

Congress continues to press the Federal Communications Commission on the issue of regulating streaming services as it does MVPDs, and it looks like a majority of commissioners and potential commissioners support at least a new look at the issue.

As FCC chair Jessica Rosenworcel suggested at a House oversight hearing Wednesday (June 21) that cable video-related regulation provided for in the 1984 and 1992 Cable Acts did not apply to online video providers, at a separate Senate Commerce Committee FCC nomination hearing Thursday (June 22), chair Maria Cantwell (D-Wash.) pressed the issue.

Cantwell pointed to a 2014 inquiry — led by then-FCC chair Tom Wheeler — into the agency’s authority to regulate online video, and said she would be sending a letter to Rosenworcel asking her to reopen that inquiry, specifically looking at whether online video services should be required to bargain in good faith with content providers, including broadcasters.

"I write to urge the FCC to update its record in Promoting Innovation and Competition in the Provision of Multichannel Video Programming Distribution Services, MB Docket No. 14-261, which sought comment on whether the definition of “multichannel video programming distributor” (MVPD) should be updated to reflect the growing amount of video services that are provided over the Internet," the letter reads, according to a copy supplied by Cantwell's office.

Cantwell asked nominee Anna Gomez and sitting commissioners Geoffrey Starks and Brendan Carr, who are up for renomination, if they would support reopening the inquiry. She suggested there was a need for good-faith bargaining regulations on streaming services to ensure broadcasters are fairly compensated for their content online. The FCC currently requires both broadcasters and MVPDs to negotiate in good faith for retransmission of broadcast signals on traditional video systems.

Cantwell said that given the rise of streaming services and decline in important local news, the FCC should look at whether there should be a regulatory structure in place to make sure broadcasters get a competitive price for their product, saying she hoped the FCC could “turn to those issues” at some point.

Asked if they would support refreshing the record, Gomez said she agreed local broadcast news was important and said that, if confirmed, she would work with the committee to understand the issue and “delve into” what the FCC can do “given current law.”

Starks, a Democrat, echoed Rosenworcel's caveat about the legislation authorizing the FCC's cable video regulations not anticipating streaming, but also said he took Cantwell’s point about the rise of streaming and supported exploring some new questions about the issue.

Carr, a Republican, said he would be “happy” to reopen the review if the chairwoman decides to do so.

Before quizzing the nominees, Sen. Marsha Blackburn (R-Tenn.) applauded Cantwell’s letter and supported reopening the 2014 FCC review of whether and how it could regulate online video.

In the letter to Rosenworcel, Cantwell said the refreshed inquiry “will help ensure that the Commission’s rules for video service remain relevant to the state of the industry today and are consistent with promoting the public interest in this vital sector, as well as provide an opportunity for fresh voices to weigh in and allow for a thorough analysis to help inform the FCC’s and Congress’s next steps.”

Cantwell told Rosenworcel that Congress should create a new copyright regime for linear TV streaming services so that broadcasters can more easily be compensated, but that the FCC did not have to wait around for Congress to get to it. 

In the absence of that regime, she said, “linear television streaming services would be required to negotiate directly with local broadcasters under current good faith negotiation requirements of the Communications Act, which would lead to agreements that better reflect the value of broadcasters’ content.”

Not surprisingly, broadcasters were solidly behind the Cantwell effort. 

“NAB is grateful to Chair Cantwell for her continued leadership to preserve and strengthen broadcasters’ valuable local journalism and public service in a shifting media landscape,” National Association of Broadcasters president and CEO Curtis LeGeyt said. “As every consumer recognizes, streaming platforms have drastically changed their ability to access local broadcast content. We echo Chair Cantwell’s call for the FCC to update its vMVPD [virtual MVPD] proceeding to examine this issue, and look forward to working closely with the Commission and lawmakers to inform their deliberations.”

“Nexstar believes Senator Cantwell makes a compelling case for closing the ‘streaming loophole’ and allowing local broadcasters to negotiate directly with over-the-top providers such as You Tube TV, Hulu, FuboTV and others,” Nexstar Media Group executive VP and chief communications officer Gary Weitman said following the hearing.

Recent disputes between broadcast-television networks and affiliate station owners over virtual multichannel video programming distributors (vMVPDs) have created enough noise to get the attention of Wall Street.

In a research note Friday, MoffettNathanson analysts Robert Fishman and Michael Nathanson weighed in on CBS affiliates no longer being available on FuboTV and Sinclair Broadcast Group’s ABC affiliates getting blacked out on Hulu.

“It is still possible TV station affiliates reach new deals with vMVPDs after any short or even prolonged blackout,“ the analysts said. “But for the moment, it seems that without any change to government regulation over MVPDs, there will be more storms ahead surrounding future negotiations.”

The longstanding relationship between networks and affiliates has been mostly peaceful and mutually beneficial, Fishman and Nathanson noted. “However during periods of negotiation, we are usually not surprised to see more noise around which party has the leverage and how that impacts the terms of new reverse compensation deals.”

Also Read: CBS-FuboTV Flap Adds to Strains With Affiliates, Analyst Says

It’s worth pointing out that until the 1990s, networks paid their affiliates to carry their programming (and national commercials). These days, the stations pay the networks programming fees that mostly help cover the cost of sports — particularly NFL games.

Streaming in general, and the rise of vMVPDs, have complicated the relationship.

On recent earnings calls, station owners have said that vMVPD deals account for only a small fraction of the retrans revenue that makes them attractive to investors.

“Even though it is true that these TV affiliate negotiations are unique to vMVPD deals today, we expect vMVPD subscribers to continue to take share of the declining pay-TV landscape, making this a bigger deal going forward,” they said.

“One interesting angle that we hope to learn more about is how beneficial these new deals are for the big broadcast networks and media parent company owners overall,“ Fishman and Nathanson said. “If national network feeds have the ability to fulfill the NFL local game requirements, it would seem as though the broadcast networks should be able to obtain improved economics from new vMVPD deals.” ■

E.W. Scripps Co. CEO Adam Symson called for stations to be able to negotiate retransmission consent deals with virtual MVPDs the same way they do with cable, satellite and telco TV distributors.

Newly created virtual multichannel video programming distributors (MVPDs) like YouTube TV and Sling TV currently negotiate with broadcast networks for national carriage on behalf of their owned stations and affiliates. The issue recently came to a head when the CBS affiliate board said a deal reached with Fubo TV did not give affiliates enough value for their local programming 

Owners of CBS affiliates rejected the deal and Fubo is now streaming a national feed provided by CBS. 

Earlier this week on Sinclair Broadcast Group’s earnings call, CEO Chris Ripley said “there is a growing consensus within the broadcast community and also within D.C., that this situation with the virtuals needs to change,” Ripley said. “It really is not consistent with the way the industry is set up and the way market power should be used.

On Scripps’s earnings call Friday morning, Symson said, “There’s no question that the virtual MVPDs and their customers want the local feeds.”

Symson said Scripps believes “the virtual MVPDs need to be considered MVPDs, just like cable and satellite.”

“What’s the difference whether the programming comes in over IP or cable or satellite or coax or fiber?“ he asked. ”It’s essential the same business and broadcast affiliates should have the wherewithal to negotiation directly with the virtual MVPDs for the distribution of our signal with the networks out of the way.”

Symson noted that Fubo was “pretty immaterial” as a distributor. “These are not existential issues or existential negotiations. But this is an example of where the regulatory framework needs to catch up to reality,” he said. 

“We expect fair value in the distribution of our signals, whether they're to traditional MVPD virtual MVPDs,” he said.

Scripps already has extensive experience dealing with vMVPDs through its national networks division. Scripps has gained carriage of its digital over-the-air broadcast networks on vMVPDs including YouTube TV, which is now carrying Scripps’ Ion, Bounce and Court TV channels.

Scripps president Lisa Knutson said she expects vMVPD carriage to contribute to a 40% growth in the company’s connected-TV ad revenue in 2023.

“Our networks have grown with the growth of virtual MVPDs during this quarter,” she said. “We are planning to launch additional free ad-supported, or FAST, channels in the coming months.”

Also on Friday, at the end of Gray TV’s fourth-quarter earnings call, chairman and CEO Hilton Howell weighed in on the issue of Paramount negotiating with virtual pay-TV providers on behalf of CBS affiliates, an arrangement Gray and other station owners initially agreed to in order to help fledgling virtual carriers get off the ground. 

“As a matter of just basic law and common sense, no other company has a right to negotiate on behalf of my company without our consent,” Howell said. Saying he was not going to negotiate in public or criticize anyone, he said “the negotiations in the past everyone agreed to, so they were handled in that way. The affiliate groups feel that times change.”

Howell said he read Ripley’s remarks on the topic in B+C. “I personally endorse his comments and where he articulated it,” he said. 

“I’m very hopeful that we can work out something with all of the networks,” Howell said. “But we consented to where it has been. We will not be consenting going forward.” ■

Since Netflix reported weak first-quarter 2022 subscriber additions in April, there has been an onslaught of punditry about the demise of streaming which runs counter to many of our numbers and forecasts. We estimate 89 million U.S. paid streaming subscriptions were added in 2021 and forecast 80 million additions in 2022, and 50 million in 2024, all highly robust.

For the most part, streaming is a replacement for TV subscriptions, as well as for box office, packaged sales and rentals. With 6 million to 7 million U.S. TV subscriber losses per year — double the annual losses of a half-decade ago — TV is the gift that keeps giving for the streaming business. Between cord-cutters, cord-nevers and those who still subscribe to traditional TV, the penetration rate of households that pay for streaming is higher than it ever was for television.

At its apex in 2016, U.S. TV access and advertising was a $181 billion business, versus $158 billion in 2021. Based on our forecasts, it will tally $140 billion in 2024 and $105 billion in 2027. That’s not a pretty growth picture.

Meanwhile, U.S. streaming access revenue grew 37% to $39.4 billion in 2021, and we forecast revenue of $51 billion in 2022 and $69 billion in 2024. At its current run rate, streaming access revenue will be over $91 billion in 2027 and, when combined with TV programmers’ streaming advertising revenue, would be larger than the legacy TV business.

Assuming TV subscribers continue to decline at 6 million to 7 million per year, TV access providers will be effectively disintermediated by their programming suppliers. Hence within a decade, traditional TV will no longer exist and streaming will be the only show, game or movie in town.

Programming and now streaming behemoths The Walt Disney Co., NBCUniversal, Paramount Global and Warner Bros. Discovery are all seeing impressive streaming subscriber gains but at the cost of lackluster TV advertising and programming sales revenue growth. At the same time, they’re being constrained by Amazon, Apple, Google and Netflix, which together represent almost half of U.S. streaming access revenue.

Further, these major programmers will not reach, based on their own forecasts, streaming profitability until 2024-2025, as content spend has grown exponentially to keep up with Amazon, Apple and Netflix.

Programmers’ profitability predicament has been punished by Wall Street with stocks down on average over 40% year over year, not that Amazon or Netflix have fared any better. Further, Netflix was cash flow positive for the first time in 2020, but not in 2021, and we assume on a standalone basis Amazon and Apple’s streaming businesses are not profitable. 

Consumer Benefit, Provider Pain

Thus far, the only real beneficiary of streaming has been the consumer, who between paid and advertising-supported streaming can now assemble programming at lower cost than a TV subscription. Given the lack of stickiness of most streaming offers, consumers can also easily sign up and then churn off subscriptions. Streaming has also ushered in a massive rise and diversity of programming.

How much streamers raise prices, add advertising or limit free viewing going forward remains to be seen.

That streaming is only going to become more pervasive and end TV as we know it does not mean streaming is a great business for most.

All numbers in this article are from Convergence’s annual Couch Potato report series. 

Virtual pay TV operator fuboTV reported a loss of around 75,000 subscribers in the first quarter, while missing on the consensus forecasts of equity analysts with revenue, bringing in $242 million in sales. 

Analysts had hoped for sales of at least $243 million. 

As fuboTV noted, the revenue figure is a company record and represents a doubling year over year. And the New York-based streaming company's customer ranks, standing at 1.056 million, are 81% larger than they were a year ago. 

But sequential customer growth and analyst revenue forecasts have been the key determiners in this mean season of corporate earnings for streaming companies. And fuboTV saw its already profoundly shriveled stock price shrinking even further in after-hours trading, down 6% and falling within the first hour of filing its Q1 report. 

Also read: NewFronts: FuboTV Offers Custom Audience Segments to Advertisers

The company reported a net loss of $140.8 million in Q1, more than double the $70.2 million it bled in the first three months of 2021. 

FuboTV, which presented a range of new advanced advertising features at the NewFronts this week, generated ad revenue of $22.8 million in the first quarter, an increase of 81% versus Q1 of 2021.

FuboTV recently introduced what was effectively a $5-a-month price increase, wiping out its base tier, but that move didn't come until April. ▪️

Americans increased the time they spent streaming video by 18% in February to 169.4 billion minutes from a year ago, according to Nielsen.

In its new State of Play report, Nielsen says streaming will continue to grow. It found that 93% of Americans said they will increase their paid streaming services or make no changes to their current subscription portfolio over the next year. The number of Americans paying for more than four streaming services grew to 18% from 7% in 2019.

Over the last three years, there has been an 18% increase in available video content, and not surprisingly, a lot of viewers are overwhelmed. With a 20% increase in unique program titles to a whopping 817,000, 46% of respondents said the growing number of shows, services and platforms has made it difficult to find the content they’re looking for. 

When asked if bundled streaming services might make it easier for consumers to find the content they are seeking, 64% of respondents indicated they wish there was a bundled video streaming service that would allow them to choose as few or as many video streaming services as they wanted.

Despite the difficulty, subscription video-on-demand now accounts for 53% of minutes streamed. Of the four hours, 49 minutes per day that the average American spends watching content, 1:22 of that is through connected TV.

At the same time, ad-supported VOD (AVOD) and virtual multichannel video programming distributors (MVPDs) account for 35% of consumption. YouTube TV, which Nielsen said is the vMVPD with the highest household penetration, has grown in percentage of homes by 160% since 2020. 

"The inaugural State of Play really underscores the fact that we’ve entered the next phase of streaming, based on the trends we have been detailing about streaming over the past few years," said Brian Fuhrer, senior VP, product strategy, Nielsen. "We’ve moved from infancy into adolescence, and all the complexities that one would expect at that point. It’s not just that streaming is increasing year over year. Now consumers want access simplified and the explosion of services has renewed discussions around bundling and aggregation. Ultimately, these challenges signal an opportunity as the industry harnesses streaming for long-term business growth.”

The State of Play report leverages Nielsen TV measurement and streaming data, insights from Gracenote, a Nielsen subsidiary, and findings from an online custom survey of U.S. video streamers. ■

Growth slowed for virtual multichannel video programming distributors (MVPDs) in the third quarter of 2021, as the category added just under 1 million subscribers compared to 1.7 million new subscribers a year ago, according to a cord-cutting analysis by MoffettNathanson.

Including the modest gains for the vMVPDs, total pay TV distribution was down 5.2% in the third quarter, the biggest drop since the 5.5% decline in the second quarter of 2020. 

Losses for cable operators reached 6.2% in the third quarter, the fastest decline on record. Satellite distributors lost customers at nearly twice that rate at 12%, but that was an improvement from a year ago, when subscribers declined 14%.

The vMVPDs now have about 14.2 million subscribers, MoffettNathanson estimates.

MoffettNathanson blamed the vMVPD deceleration in part on price increases.

“Six years ago, everyone burst out of the gate with eye-popping low prices,” MoffettNathanson said in a report Tuesday (January 5). “That helped them get out of the gate, but it undermined their longer-term prospects in two ways.”

The first issue was that the vMVPDs attracted price-sensitive consumers. The second issue is that the vMVPDs would have to their raise prices faster than traditional distributors as content companies increased their license fees.

DirecTV Stream has already raised the price of its Choice and Premier tiers, effective January 23. And having reached a new deal with The Walt Disney Co. at the end of the year, a price increase for YouTube TV — the biggest of the vMVPDs — is just around the corner.

YouTube TV added 225,000 subscribers in the third quarter, MoffettNathanson estimated, down from 400,000 additions a year ago. Hulu Live added about 300,000 subs in the quarter, compared to a gain of 700,000 a year ago. A big gainer in the quarter was FuboTV, which added more subscribers in the quarter than a year ago and now has a total of 945,000 customers.

For media companies, growth of affiliate fees slowed to 3% in the third quarter. Retransmission fee growth dropped to 11% in the third quarter from 15% in the second quarter. Cable-network fees rose 2%, down from 3% in the second quarter.

Retrans fees rose more than 14% for Disney, NBCUniversal and Fox, but less than 4% for ViacomCBS. NBCU also rang up the biggest cable affiliates fee growth at 7.5%. AMC and Turner’s fee revenue dropped compared to a year ago.

“There was a time when cord-cutting statistics were avidly watched,” MoffettNathanson concluded. “Not anymore.” 

“The market seems resigned to a steady deterioration. Yes, the rate of decline (when one includes vMVPDs) at 5.2% is among the worst on record, and is undoubtedly worse than we and others had once over-optimistically projected. But it is still orderly, and as long as the decline is orderly, media investors have leave to focus on the upside promise of DTC platforms rather than the downside certainty of linear,” the report said. 

“But there is clearly a risk that the declines become disorderly. All it would take is one major player — ESPN is the obvious candidate — to decide that the future demands a bolder shift in their best programming to DTC, or, alternatively, that their entire suite of programming should be simultaneously available DTC … and the Jenga tower would collapse,” they said. ■

The Walt Disney Co. is pushing subscribers of its Hulu Plus Live TV further into its streaming bundle.

In an email to subscribers Friday, the company said it is raising the price of its virtual multichannel video programming distributor by $5 a month to $69.99 a month (with ads in on-demand programming) and $75.99 a month (without ads in on-demand programming).

But after the price increase kicks in, those vMVPD subscribers will also find themselves getting Disney Plus and ESPN Plus.

"With this change, you will also get access to Disney Plus and ESPN Plus. On Disney Plus, you can watch all the amazing content from Disney, Pixar, Marvel, Star Wars, and Nat Geo, plus The Simpsons. And ESPN Plus has even more live sports and the award winning 30 for 30 library," the email to subscribers said.

The increase goes into effect Dec. 21. The price for Hulu’s SVOD product went up by $1 in October. 

Disney has increasingly been pushing its streaming services--Disney Plus, ESPN Plus and Hulu as a bundle as it attempts to challenge Netflix as the TV business pivots to direct-to customer.

“Consumers with a Hulu Plus Live TV subscription will now have the most complete offering in streaming that provides viewers with a full live and on-demand TV experience,” the company said.

The new arrangement should provide a bump to Disney Plus, whose growth has slowed. 

Disney took a beating when the most-recent quarterly report shows that Disney Plus had added just 2.1 million subscribers.

Company executives said that they expected growth to accelerate in the second half of next year as its original programming, clogged by pandemic production constraints, opens up. The company also said it planned to increase spending on content.

Disney’s loss on its direct-to-consumer streaming business rose to $630 million from $374 million a year ago for the quarter. Revenue increased 38% to $4.6 billion from $3.3 billion a year ago.

Hulu finished the quarter with 43.8 million subscribers, up from 42.8 million the previous quarter and 36.6 million a year ago. Hulu had 4 million subscribers to its Live TV Plus SVOD service, up from 3.7 million in the prior quarter, when subs dropped by 100,000.

Hulu and other vMVPDs have seen their growth slowed by continual price hikes. The streaming pay-TV services were originally designed as a lower-cost alternative to traditional cable, but given the high cost of programming, few of them are profitable according to analysts.

Hulu Plus Plus Live TV will give viewers access to 75 live TV channels and a library of 100,00 on demand movies and TV episodes, original shows and live sporting events.

App downloads of the major virtual MVPDs were up 63% in June, most likely driven by heavy sports content and the run up to the Summer Olympic Games in Tokyo, according to a report by Evercore ISI media analyst Vijay Jayant.

YouTube TV again accounted for the largest slice of overall vMVPD downloads -- 44% -- but it was sports-centric FuboTV that had the biggest year-over-year gain in the segment --312%, according to Jayant. FuboTV was a close second to YouTube TV in terms of download share (33%), followed by Sling TV (18%) and AT&T TV (9%).

“Virtual MVPD app download trends improved vs. the prior few months likely driven by the strong sports calendar and lead into the Olympics,” Jayant wrote in his report, adding that May downloads rose 11% year-over-year, driven by FuboTV and YouTube TV. 

Also Read: Fubo TV CEO David Gandler Says VMVPDs Are Pay TV's Future Gateway 

“Similar to trends in prior months, YouTube continues to dominate in terms of vMVPD download market share followed by fuboTV, SlingTV, and AT&T TV,” Jayant wrote. 

June was a big TV sports month ratings-wise with the NBA Playoffs,  Major League Baseball, the U.S. Olympic Trials, the NCAA baseball tournament and UEFA European Championship all attracting strong ratings. 

The Summer Olympic Games are scheduled for July 23-Aug. 8 in Tokyo and NBCUniversal plans to air about 7,000 hours of content on its broadcast and cable networks as well as digital platforms including Peacock and Telemundo Deportes. 

For SVOD providers, the month was mixed. Netflix app downloads were down about 25% year-over-year, a slight improvement over May’s 30% decline. Showtime (up 132%), Disney Plus (up 114%) and HBO Max (up 63%) were the top performers in the sector, while Hulu rose 4% and Amazon Prime Video increased 1% in the period.

HBO Max, according to Jayant, dominated the SVOD space with strong releases of originals and library content in June. Its June 29 expansion into 39 Latin American and Caribbean countries should help drive downloads in July, he said. 

Newer entrants Discovery Plus (launched Jan. 4) and Paramount Plus (launched on March 4) were not included in year-over-year estimates. But Jayant wrote that month-over-month trends at Discovery Plus have been marginally weaker, with June 2021 downloads at about 1.2 million, fewer than the 1.5 million downloads in May. Paramount Plus’s ad-supported tiered launch June 7 helped push total downloads to 2.3 million in June, up from 1.4 million in May. 

Disney Plus was driven mainly by gains in Latin America, ahead of its planned August launch of the Star Plus general entertainment streaming service and a new promotion that will give new Amazon Music Unlimited subscribers Disney Plus for six months free. Existing Amazon Music Unlimited customers can get Disney Plus for free for three months. 

On the ad-supported side, Jayant estimated that app downloads were up 48% year-over-year in June, fueled by gains at Tubi TV (up 49%). Trends for Pluto TV were down about 3% for the month, but the ViacomCBS-owned streamer still holds the biggest share of download activity at 38%, according to Jayant. NBC Universal’s Peacock launched in April 2020, so year-over-year comps were not shown, but Jayant wrote the service has a 26% share of download activity, close behind Pluto. 

As the recent NewFront presentations emphasized, Streaming Video will continue to shape the media economy and culture at large — making now a good time to evaluate its impact on both.

First came the cord-cutters. General dissatisfaction and belt-tightening drove their defection from traditional cable, and Roku and AppleTV devices made it feasible.  Cutters begat shavers, stackers, and nevers; millions of lost Cable and Satellite subscribers have permanently altered the industry.  

Within cord-cutters, however, there are substrata that don’t yet have a cool “cord” name.  Viewers who want to drop their cable companies, but not the cable experience.  Let’s call them cord-kindas.  

They can subscribe to all of the “Plus” services that keep emerging, but the individual monthly fees would quickly add up and having to switch between apps to go from Chopped to SportsCenter is inconvenient, especially for habitual channel-surfers.  

A solution: vMVPDs, or virtual multichannel video programming distributors.  They don’t get the attention that Peacock, Discovery Plus, et. al. do, but vMVPDs offer cable without the cable.  In a recent eMarketer survey of vMVPD subscribers, 49% of respondents cited “Access to live content through a guide” as a benefit — edging out cost and leaving “No contracts” and ease of cancellation in the dust.  Ultimately, kindas don’t want the end product to change.

Per Antenna Analytics, vMVPDs have grown 24% between Q4 2019 and Q4 2020 — driven largely by live sports, an offering of the more comprehensive (and pricier) providers.  Costs range from free to $65 per month, with the more expensive options more closely recreating “real” cable.  As you move toward free, things get less and less cable-like. Here’s how they all shake out:

Cable Without the Cable

Recreating the cable experience

Hulu Plus Live TV ($65/month); YouTube TV ($65/month); FuboTV ($65/month); AT&T TV ($65-$95/month) 

Hulu Plus Live TV offers 65-plus live channels, in addition to Hulu’s ad-supported streaming tier.  YouTube TV has 85-plus channels, plus unlimited DVR (an upcharge on H+LTV). FuboTV began its life as a soccer-centric outlet (the name is short for “futbol”) but has evolved into a broader-based vMPVD with a strong sports offering amongst its 100+ live channels.  

AT&T TV offers three different tiers: Entertainment ($65 for 65-plus channels) Choice ($85 for 90-plus channels) and Ultimate ($95 for 130-plus channels), with corporate sibling HBO/HBO Max included free for one year at the two highest tiers.  As with traditional Cable and Satellite, premium channels are available for an additional fee on each of the services.

Still Pretty Cable-y

Live TV with Scalable Offerings

SlingTV (Starts at $35/month); Philo (Starts at $20/month) 

A service of Dish Network, SlingTV has two available packages: Blue, which focuses on news and entertainment programming, and Orange, with an emphasis on sports and family.  Additional channel clusters (add sports to Blue, add news to Orange, etc.) will run $6/month.  Premium selections and DVR services can also be added.  

Philo is a joint venture among ViacomCBS, A&E Networks, AMC Networks and Discovery Inc.  For its relatively low price tag, Philo has a nice basic network roster (with upcharges for premium channels).   It doesn’t hurt that Philo is owned by a consortium of four media giants, however as each establishes its own streaming brand they may start selling off their stakes in the company.  How that would affect programming is yet to be seen.

It’s Good, But It Ain’t Cable 

No-Cost Options

PlutoTV (Free); Tubi (Free) 

Each of these services offers a lot of content. It’s just that most of it isn’t live Cable.  Pluto has taken a lot from its owner, ViacomCBS, but it’s all on specialty—“BET Pluto,” “Smithsonian Channel Selects,” etc.  The rest are channels devoted to one show (i.e. Family Ties) or genre (i.e. “Black Cinema”).

Tubi is even less like linear Cable and almost entirely VOD.  A wide array of movies and television episodes is available, with some top networks (Tubi has been owned by Fox since 2020) and most movie studios represented.  It’s not a reasonable facsimile of Cable in its offerings or interface.  

Cord Kindas Are High-Value Impressions

Together, these vMVPDs reach 11.5 million subscribers (paid providers) and 61 million monthly users (free services).

Hulu notwithstanding, they may not benefit from the attention or marketing budgets of shiny new AVODs, but advertisers should not ignore these providers.  True, they may already see the national spots that each network airs, but they can additionally be reached through addressable advertising.

Bottom Line

With strong numbers and the potential for granular targeting, cord-kindas are an audience that won’t get lost in the shuffle by attentive marketers.

Carl Mayer is director, integrated media/Active Entertainment at Active International.

Just when things were starting to settle down in TV land, Roku hit Google up with some serious charges: the internet giant was making “unfair” and “anticompetitive” demands around surfacing YouTube and YouTube TV content in response to user search requests.

Roku claimed that in order to get it to knuckle under, Google was threatening to pull the popular YouTube TV virtual multichannel video programming distributor (vMVPD) from its platform. Google (sort of) denied that move, claiming it was in the middle of normal negotiations, and then — boom! — Roku decided to hit the nuclear button as a negotiating technique.

Ouch.

So what to make of it?

To begin with, it’s not a good time for Google to be accused of anticompetitive anything, given how it is under the microscope in Washington.

It’s anyone’s guess whether Google was indeed getting all Sopranos on Roku or whether Roku was going all Karen on Google, but this is clearly a charge that Google does not want to hear right now. It only serves to reinforce the worst fears of Google critics and, let’s face it, there are far more people who are aware of Google and its potential misdeeds. 

In terms of who has the most to lose, that’s an open question.

Consumers who are big fans of YouTube TV will likely just watch it on their smart TV interface: It’s available via Samsung, Vizio, LG and Sharp TVs. Once there, they may be surprised to discover that the original equipment manufacturers (OEMs) have been hard at work on their interfaces. In addition to improving ease of use, they’ve added their own FASTs (free ad-supported streaming TV services) with hundreds of free channels, including all of the popular new Flixes. 

So it’s possible Roku loses some customers that way, as is the even-less-likely notion that YouTube TV viewers are so loyal, they’ll go out and buy $29 Amazon Fire TVs or $49 Chromecast 2.0 sticks in order to ensure they’re never without the platform. 

Viewers with Roku TVs (TVs with the Roku OS built in) have no such option and are likely to drop YouTube TV (it’s a monthly subscription) and switch over to Hulu Live TV, which offers a markedly similar package. Ditto for users who really like their Rokus, have them set up on multiple TVs and feel no great loyalty towards YouTube TV.

(In fact, if Hulu was smart, they’d even run an offer targeted at Roku users looking to switch from YouTube. Even more clever if they can get Roku to chip in.)

YouTube TV also faces a different kind of potential fallout from this move: Viewers who have been on the fence about why they’re paying more than $50 per month for a service they barely use but hold onto like a security blanket may finally take the plunge and cut the cord. Given that there is more and better programming on streaming these days for considerably less money, I doubt many of them will be disappointed.

There will be some sporting events they can’t watch and they’ll have some trouble finding cable news channels, but I suspect many viewers won’t look back — especially given that vMVPD subscriptions seem to have peaked as of late. 

Another point for Roku.

Mostly, though, there’s math: Roku has around 50 million registered users versus around 2 million for YouTube TV. That’s a sizable margin, and while Google does have YouTube itself, few people are likely to be worried that they can’t watch YouTube on their big screen TVs (though to be fair, the number of people doing so is most definitely growing).

Data and Privacy Concerns

The bigger issue here isn’t so much Roku vs Google but rather will OEMs become the industry’s new MVPDs, engaging in frequent and costly carriage battles with programmers that mostly leave consumers frustrated.

That’s a distinct possibility, especially as the lines between programmers and distributors continue to blur.

All of the major OEMs — Roku and Amazon, plus Samsung, Vizio and LG — have their own FASTs, and Roku and Amazon are starting to produce original content for theirs.

They have the advantage now, too, in that few streaming programmers are popular enough at this point to cause real harm by withholding their programming.

The difference though — and it’s an important one — is how consumers will perceive all this. 

When satellite TV provider Dish Network engaged in one of its many, many, many carriage wars with the various networks, viewers got that it was about money: The networks wanted more, Dish wanted to pay less and let consumers know that if they had to pay the network more money, then, unfortunately, their viewers would too.

But the current battle is over issues that are less black and white and potentially make both parties look bad.

Talking about who controls viewer data and whether search results can be cooked only serves to remind consumers that “yes, they are tracking all my viewing data and selling it to advertisers” and “yes, those results I see when I search and the recommendations I get may be based on who is paying more, not on what most closely matches my request.”

That messes with viewers' sense of fair play and only serves to underscore all the negative things we’re hearing about the power of Big Tech and its “algorithms,” and all the harm they’re causing.

That’s not a win for anyone in the industry and reason enough to tread lightly, especially as far as consumers are concerned.

Caveat venditor.

Cord-cutting is expected to get worse in 2021 and 2022, offset somewhat by growth of virtual multichannel video programming distributors, according to a new report from S&P Global.

S&P said legacy MVPDs--cable, satellite and telco--will lose 8.2% of their subscribers in 2021 after losing 7.9% in 2020. In 2022, another 10.3% of subscribers are expected to cut the cord.

The pay TV losses are offset somewhat by growth among streaming distributors such as Hulu Live and YouTube TV. S&P estimates those vMVPDs will grow by 15.7% in 2021 and 12.3% in 2022. 

That will leave the overall pay TV universe down 4.5% for 2020 and 6% for 2021.

S&P’s report said the cable subscriber losses come primarily form the larger cable operators. 

“This increased pace should continue for the cable industry because the sector is increasingly indifferent as to whether unprofitable customers get their video service from cable companies or a third-party service,” the report said. 

S&P notes that Charter Communication bucked the trend by increasing subscribers in 2020, but will lose about 4% of its TV customers in 2021. “Longer term, we expect Charter to use ‘skinny bundle’ options to keep its video subscriber losses lowest in the industry,” the report said.

Long-term, S&P said that the vMVPDs won’t stop the decline in pay TV.

While there was much fanfare when these low-priced, slimmed-down alternatives were launched, these services now resemble a traditional full-size pay-TV bundle and the rapid price escalation (eliminating much of the price difference) has quickly reduced the competitive advantage of these alternatives,” the report said. 

“Still, for the next few years, these services' subscriber base should grow at a double-digit percentage rate as the price delta will take time to  contract,” it added. “Over several years, these services are likely to be less financially stable compared with legacy pay-TV services.” 

Cord-cutting isn’t good for the television business, but its impact is company specific, S&P said. 

“Broadcast networks and local TV stations are core elements of any bundle (and they have over-the-air optionality),” the report notes. 

“On the other side of the spectrum, regional sports networks, which depend on broad distribution to overcome steep sports rights fees, and premium cable networks, which face cannibalization from streaming services, are most vulnerable to cord-cutting,” S&P said. “The ultimate impact to individual companies' operating and credit metrics depends on the specific media company. This assessment isn't uniform because most large media companies have diverse business operations, including growing streaming DTC services that benefit from the decline in legacy television.”

With traditional linear TV viewing down, 42% of advertisers plan to increase spending on streaming, according to a study by Advertiser Perceptions.

Top executives will discuss over-the-top video, addressability and advanced targeting at the Advanced Advertising Summit, starting April 27 and part of the Future Spring TV 2021 week of virtual events. 

The average increase in spending on streaming was 15%, according to the study, which found that 36% of advertisers plan to invest more in virtual MVPDs and 25% will spend more on addressable linear TV. Just 19% are expected to spend more on linear TV.

“One of the most important narratives of 2020 was the mass adoption of streaming,” Justin Fromm, executive VP of business intelligence at Advertiser Perceptions, said. “The more traditional TV brands expand in the streaming space, the more advertisers pick up on the signal.”

Advertiser Perceptions found that 48% of advertisers are buying OTT and connected TV programmatically.  The top benefits of buying programmatic OTT and CTV were the ability to target and add reach to campaigns.

“Reach is the primary headwind for those selling CTV/OTT inventory,” said Fromm. “While addressable campaigns are efficient, most brands have a hard time finding enough of their target audience in one place.”

Moving into the second week of Major League Baseball’s 2021 regular season, Bally Sports Networks still hasn’t reached a carriage deal with three top streaming services. 

YouTube TV, Hulu Live Plus TV and FuboTV still refuse to carry the channels, which were purchased by Sinclair Broadcast Group in 2019. The former Fox Sports channels were rebranded as Bally Sports Networks on March 31, part of the 10-year, $88 million agreement between Sinclair and the casino owner. 

While the streamers have been without the networks for months — Hulu and FuboTV dropped the 21 channels in January 2020, with YouTube TV shedding the networks in October — the hope was that they could reach a deal by Opening Day, April 1.

That was not to be. As of press time, the channels were still dark to the streamers. FuboTV did reach an agreement with Marquee Sports Network, in which Sinclair has a minority interest, on April 1. 

Rob Weisbord, president of broadcast and chief revenue officer at Sinclair, told B+C/Multichannel News on April 1 Sinclair’s distribution team is in talks with MVPDs “trying to figure out how to get to a deal.”

Bally Sports has carriage deals with most of the traditional MVPDs across the country, except for RSN-averse Dish Network, which dropped the channels in 2019. But the lack of carriage from the streaming services, which have more younger viewers coveted by advertisers, has cast a pall on the channels.

Sports consultant Lee Berke, president and CEO of LHB Media & Entertainment, said it is possible the streamers are “trying to see if they can get by without the RSNs,” but added that the standoff highlights the growing need for RSNs to have a direct-to-consumer component to their offerings. 

Jon Lafayette contributed to this report.

While the 73.7 million subscribers for Disney Plus drew most of the attention when The Walt Disney Co. announced its fourth-quarter results, the company also said that its Hulu Plus Live TV virtual MVPD increased its subscribers by 27% to 4.1 million.

Observers including Brian Wieser of GroupM noted that Disney is now the fifth-largest US-based pay TV service provider, ahead of Verizon, which ended the calendar third quarter with only 3.9 million subscribers.

Related: Disney Reports 4th-Quarter Loss Despite Streaming Gains

Cord-cutting and other factors have been whittling down the number of subscribers at Comcast, DirecTV, Charter and Dish, which remain ahead of Disney.

“Of course, the economics of a vMVPD are not as favorable as a traditional provider given the limited number of bundling opportunities and higher operating cost structure, but the scale of the relatively new operation is remarkable nonetheless,” Wieser noted.

Related: YouTube TV Surpasses 3 Million Paid Subscribers

Similarly, analyst Michael Nathanson of MoffettNathanson Research noted that by adding 700,000 subscribers sequentially since the last quarter--despite a $10 a month price increase--Hulu Plus Live TV is now the largest vMVPD platform in the U.S. 

Nathanson called the Hulu Plus Live TV performance a bright spot, but said that might be a mixed blessing. “Given the high and ever-rising variable cost of programming, we see these businesses as low margin endeavors that probably should not be valued using a Netflix multiple,” he said.

Related: How the vMVPDs Stack Up

Disney has pivoted its media assets into streaming and direct-to-consumer. And being in the vMVPD business puts Disney in an interesting spot, needing good relations with other programmers as well as with its traditional distribution partners who control most of the broadband pipes into subscribers’ homes. 

Many of those distributors are shifting their efforts towards the high-margin broadband business and are less concerned about their video customer losses--some of whom are becoming Hulu Plus Live TV subscribers.

Disney is also heavily invested in the sports business, with ESPN in particular, and Hulu Plus Live TV may help be a bridge between cord cutting and keeping sports fans as pay TV subscribers. The company has been promoting the vMVPD with the slogan “Hulu has live sports” and commercial featuring athletes including Baker Mayfield and Joel Embiid.

Disney CEO Bob Chapek was asked about reaching sports viewers and the vMVPD business was a part of his answer.

“We've got a product we're really excited about and has experienced some rapid growth, and that is Hulu plus live TV,” He said. “I think this will increasingly act as a solution to those households that have walked away from their traditional more traditional cable type subscriptions, and potentially slide it over to Hulu Plus live TV."

Chapek said that’s why the company is bullish on Hulu Plus Live TV. 

“I'm a personal big fan of it, I use it, and it's really slick, it's very elegant, and it really is a big solution provider. It is really the complete solution, I think. We're excited about that in terms of solving a consumer need, for those consumers, as you mentioned that have walked away from that particular way of distributing content,” he said.  

Edge Networks Inc., an ATSC 3.0-focused company headed by veteran wireless technologist Todd Achilles, plans to launch a virtual pay TV service targeted to secondary and tertiary markets without ample choice for cost-efficient high-speed internet.

The privately funded Edge Networks, which received permission last July from the FCC to establish two ATSC 3.0 stations in the Boise market, plans to launch the pay TV service this summer in Boise.

Evoca will offer more than 80 channels, including the major broadcast networks, as well as “major” news, sports and entertainment HD channels found in other major virtual pay TV bundles, Achilles told Multichannel News. The bundle will include some 4K programming. Access to major SVOD services will also be integrated.

The service will feature a proprietary settop box and over-the-air antenna, and will be priced at less than $50. Achilles, a former Hewlett Packard and T-Mobile executive, said many major details are still being hammered out. “But the service will have no hidden fees or surcharges, or this, that and the other,” he said.

“This is not a pure streaming service; we’re not clogging the internet with a bunch of redundant streams,” Achilles said, noting that Evoca will be based on ATSC 3.0‘s multicast capabilities.

ATSC 3.0, he noted, will provide “a great big pipe” to shuttle HVEC-encoded video over the air to homes in places like Boise, which often have limited choices for broadband access, and find themselves limited by usage caps that aren’t friendly to HD or 4K video streaming. Other rural markets don’t have access to broadband — or the ability to stream video — at all.

Evoca will still require an internet connection to work, but it will only require a “single-digit” megabits-per-second download speed to sufficient, Achilles said.

Aiming to eventually deploy its service nationally, Edge Networks will approach each market individually, providing a wireless internet solution, for example, to hard-to reach rural places.

Virtual MVPD service FuboTV agreed to be acquired by tech company FaceBank Group.

Financial terms were not disclosed.

The deal is the latest in a series of acquisitions of streaming services. Pluto TV was acquired last year by Viacom. More recently Xumo agreed to be acquired by Comcast and Fox agreed to buy Tubi.

FaceBank said that after the merger, FuboTV will become a wholly owned subsidiary of FaceBank. The combined company will be called fuboTV Inc.

Fubu TV CEO David Gandler is expected to be the CEO of the combined company.

The companies said the combination creates a leading digital entertainment entity combining fubo’s live streaming with FaceBank’s technology driven intellectual property in sports, movies and live performances. The company plans to continue to expand globally, using FaceBank’s Nexway AG eCommerce platform to accept payments.

“The business combination of FaceBank Group and fuboTV accelerates our ability to build a category defining company and supports our goal to provide consumers with a technology-driven cable TV replacement service for the whole family,” said Gandler. “With our growing businesses in the U.S., and recent beta launches in Canada and Europe, fuboTV is well-positioned to achieve its goal of becoming a world-leading live TV streaming platform for premium sports, news and entertainment content. In the current COVID-19 environment, stay-at-home stocks make perfect sense - we plan to accelerate our timing to uplist to a major exchange as soon as practicable. We look forward to working with John and his team of creative visionaries."

Fubo started as a soccer streaming service and has expanded into other sports and entertainment channels.

Fubo had raised more than $150 million in funding. Investors included 21st Century Fox, AMC Networks, Luminari Capital, Northzone, Sky, Discovery, Waverly Capital, DCM Ventures, i2bf, LionTree Partners, Univision, Edgar Bronfman Jr., Chris Silbermann and the late NBA commissioner David Stern.

FaceBank develops digital likeness assets of celebrities and consumers for used in artificial intelligence, entertainment, personal productivity and social networking.

“As a tech-driven IP company, FaceBank was looking to find the perfect delivery platform for its celebrity and consumer driven content, with a dynamic user interface that could support the global consumers’ rapidly evolving practices of content consumption,” said FaceBank founders John Textor and Alex Bafer. “David and his team have a clear vision of the future and fuboTV’s technology is second to none among the disruptor class of content delivery – a perfect match for FaceBank Group.”

For more stories like this, visit our sister website Next TV. 

Fox Corp. executive chairman and CEO Lachlan Murdoch said the company is on a path toward generating an additional $1 billion in affiliate fees by 2022, based on strong renewals for its broadcast and cable network properties so far and in the future.

Fox saw its affiliate fees rise by about 7% in fiscal Q2. Fox had said earlier that it expected to add another $1 billion to its affiliate coffers through retransmission consent and cable carriage fees, primarily because of its focus on live news, sports and events. 

"I can say that our announced expectation that we will do $1 billion of additional affiliate revenue by calendar 2022, we are absolutely still expecting to hit that number,” Murdoch said on the company's earnings call. “That is factoring in subscriber declines. I think we’re doing a terrific job in driving these affiliate fees.”

Related: Affiliate Fees Drive Fox Fiscal Q2

2022 also is the year that Fox’s broadcast rights with the National Football League expire, and Murdoch said the network is already in early negotiations to renew its deal with the league.

“We feel we are in a good place to work with them as our most important partner to renew our rights going forward,” Murdoch said. “But it is early days in the conversation.”

Chief financial officer Steve Tomsic added that Fox already has done several affiliate fee and retrans deals, adding that the strength of its channels -- Fox News is a perennial ratings winner as is its Fox broadcast network -- has led to multi-year carriage deals with strong pricing and full distribution.

He added that while virtual MVPDs have added to the mix, they haven’t had a huge impact yet on the overall affiliate fee picture. Nallen said that pricing has been a little better with vMVPDs, but “we continue to expect that we will get progressive increases in cable affiliate growth going into this second half of our fiscal year.”

But Fox also has had a strong virtual presence. Murdoch said that 11.7 million people watched last week’s Super Bowl via streaming, and 70% of those people watched on a Fox-owned platform. He pointed to its streaming news service Fox Nation, launched in 2018, where 80% of the people that sign up for the free trial of the service convert to paying subscribers.

Asked if he would consider taking his networks direct-to-consumer, like other programmers have recently, Murdoch was more cautious.

“It’s something we are always looking at, but we always have an eye on not damaging the current business model where we generate a tremendous and growing amount of revenue from our cable subscribers,” Murdoch said. “We have the capability to go direct-to-consumer, we took the technology that we built with us when we separated from Disney, we are running direct-to-consumer businesses with Fox Sports in Pay-Per-View with Fox Nation in a different manner. We’re happy where we are now, and we’ll see what the future brings.” 

After finally having caught up, and perhaps surpassed, Dish Network’s Sling TV as the top dog among virtual pay TV services, Hulu+ Live TV has announced a whopper of a price bump.

The service, which includes access to the Hulu SVOD platform, will jump from $45 a month to $55 a month.

“The new price better reflects the substantial value of Hulu+ Live TV together as the only offering that brings together live and on-demand television in one seamless experience,” Hulu said in a statement. “The new price will allow us to continue offering all of the popular live news, sports and entertainment programming [included] in the plan.”

Related: Expect More vMVPD Attrition Following PlayStation Vue Shuttering, Analyst Says

Hulu hasn’t announced a subscriber number for its virtual MVPD bundle. But in his quarterly “Cord Cutting Monitor,” published Wednesday, MoffettNathanson analyst Craig Moffett pegged the platform’s user base at 2.7 million users. That would edge out longtime vMVPD leader Sling TV, which finished the third quarter with 2.686 million users.

Sling TV launched in the first quarter of 2015, more than two years ahead of Hulu Live.

Moffett also noted the steep price increases in the vMVPD market over the last two years.

“Eighteen months ago, the cheapest video packages for vMVPDs were clustered around $30 to $35 per month,” he wrote. “Eighteen months later, most are in the $45 to $50 per month range, an increase of roughly 50%.”

With the vMVPD market billing itself as an alternative to the regular price increases of traditional pay TV, this has had an undermining effect, Moffett pointed out.

But the market has continued to grow—the analyst estimates that nearly 9 million consumers subscribe to vMVPD services. 

Over the past nine months, cable operators and broadcasters have been at each other’s throats more than ever, fueled by fears of greater regulation and a declining pay TV customer base. According to some analysts, as broadcasters have increasingly relied on retransmission-consent cash to prop up a shrinking ad business, many are digging in their heels not only for higher fees, but for guarantees they will be paid regardless of the impact of cord-cutting.

Retransmission consent has been a boon for broadcasters ever since it was included in the 1992 Cable Act, federal legislation that required television stations to elect for either “must-carry” status — meaning pay TV distributors had to carry them, usually at no charge — or retransmission consent, meaning they would be paid for their signals. Once considered to be a supplement to the larger fees broadcasters extracted from advertisers, according to Kagan, a unit of S&P Global Market Intelligence, retrans is approaching 50% or more of many station owners’ annual revenue.

But like everything else in the TV business, retrans is beginning to fall victim to its own success. As fees have risen, distributors and consumers are beginning to resist the high cost of broadcast.

More Blackouts Than Ever

That has become evident in the number of retransmission consent disputes that have resulted in at least temporary blackouts of service. According to the American Television Alliance, 2019 is already a record year for retrans blackouts, with 276 stations affected. With three months still left in the year — and December is one of the more volatile months for retrans contract expirations — 2019 could easily break the 300 mark, or about double the 165 station blackouts recorded in 2018.

“If broadcasters continue on this pace, then the sky’s the limit,” ATVA spokesman Justin Bartolomeo said in an email.

Adding to broadcasters’ urgency is the expected renewal of the federal Satellite Television Extension and Localism Act (STELAR), currently under review for renewal. Most cable operators are hoping that the renewal will include retransmission-consent reform.

According to Kagan, retrans revenue is expected to reach $11.7 billion in 2019, an increase of 10.8%. But while retrans revenue has doubled in the past five years from $6.4 billion in 2015 to $11.7 billion in 2019 (a 12.7% compound annual growth rate), that pace is expected to slow considerably over the next half decade. Kagan predicts that retrans revenue will reach $16.26 billion in 2024, for a CAGR of about 6.7%.

There are several factors involved in the slowdown, Kagan senior research analyst Justin Nielson said, including how retrans is actually paid. Stations collect fees from traditional distributors in their service area and pass on a percentage to their respective networks — so-called reverse retrans fees — while virtual distributors pay the networks themselves, which then dole out a percentage to the respective stations.

“That has some impact in terms of the growth rate of the top line, because you’re melding gross retrans and net retrans from the virtuals,” Nielson said. “But also you’re looking at cord-cutting from the traditional side not being replaced directly from the virtual side.”

Stations are getting, on average, 30% to 40% of the fees paid on the virtual side, compared to around 50% of the fees from traditional distributors, Nielson said. But that latter cut also is on the decline, he said, as networks insist on a bigger bite of the apple as new deals are reached. In some cases, stations are giving as much as 60% of their retrans revenue to their respective networks, according to Kagan.

Wolfe Research managing director Marci Ryvicker also has warned that retrans is headed for a fallow period. At the TVB Forward conference in New York on Sept. 26, Ryvicker warned that while retrans growth is expected to be in the 12% annual range for the next five years, it will drop to around 7% after 2024. The main culprits for that falloff are cord-cutting and rising fees. Ryvicker estimated that pay TV subscriber rolls are declining at about 6.6% annually, a pace that will continue for the foreseeable future.

Fees Might Outpace Demand

According to Kagan, the average retrans fee charged by a broadcast station will reach $2.93 by 2022, putting it behind only ESPN ($11.08) and cable channel TNT ($3.09).

That’s still well behind what broadcasters say they’re worth. The National Association of Broadcasters says that broadcast channels account for about 40% of overall TV viewership, yet receive only 15% of the distribution revenue. If the broadcasters received 40% of TV revenue, Ryvicker estimated, retrans fees would balloon to between $7 and $8 per subscriber, a level that would essentially price them out of the market.

That would mean consumers would pay between $28 and $32 per month for the Big Four broadcast networks, content they could receive for free over the air. “There is such a thing as outpricing the consumer,” Ryvicker said at TVB Forward, according to reports.

Today, Kagan estimates that typical Big Four network affiliates receive between $2.50 to $3 per month per subscriber in retrans fees from traditional distributors, while virtual MVPDs pay out about $3.99 per month per subscriber directly to the networks.

Nielson said he believes that retrans rates paid by vMVPDs will likely be the next big bone of contention, especially for AT&T and Dish Network, which own both traditional and vMVPD services.

“They’re definitely trying to cut costs as much as they can in terms of programming, because margins on those are very slim,” Nielson said.

Vidgo, which offers a pre-paid virtual pay TV service targeting Latino customers, today announced a strategic partnership and investment with Kiswe Mobile, a company that makes applications for watching sporting events on smart phones.

Monetary figures were not disclosed.

“Vidgo’s unique customer acquisition model gives them a large physical presence in mobile storefronts and with prepaid customers in nearly every community in the United States,” said Mike Schabel, Kiswe Mobile’s CEO, in a statement. “Their go to market strategy and content rights fit nicely with our vision to provide consumers with an engaging and social mobile video experience centered around live sports.”

After numerous fits and starts, Atlanta-based Vidgo launched two bundles of Spanish-language channels late last year, base priced at $15 a month. Its two programming bundles focus heavily on Latino soccer fans.

Murray Hill, N.J.-based Kiswe Mobile was founded in 2013 by former Bell Labs engineer Jeong Kim. It specializes in user-controlled video experiences surrounding sports, such as allowing the user to control the camera angle.

Vidgo, which still insists its on the cusp of an English-language service launch, said it will work with Kiswe to create a “differentiated platform for users by enabling social features for live video that will increase interaction amongst friends and family: a virtual living room.

“We share Kiswe’s vision to bring friends and fans together to watch live sports and

television and believe strongly it will revolutionize the way people watch video” said

Shane Cannon, Vidgo CEO. “Bringing people together to watch video.”

While it didn’t offer an update on its paid subscriber count, which it said reached 250,000 in the third quarter of last year, virtual pay TV provider FuboTV said its overall engagement is way up.

FuboTV users, the startup said, watched 3 billion minutes of content on the platform in the second quarter, a 200% year-over-year increase.

Time spent on the platform per subscriber spiked 137 year over year in June, the company said. And those who take the Full Monty of major channels—those who pay for the extra packages, that is—spent an after of 142 hours consuming FuboTV in June.

Fubo said connected TV usage is a growth driver, with nearly 90% of the vMVPD’s viewing hours coming from those devices vs. just 67% in June 2018. FuboTV users are now watching an average of 155 hours of content on the service via connected TVs each month.

Notably, for all the marketing push FuboTV does to brand itself as a destination streaming service for sports fans, 42% of content watched on the ESPN-les platform in June was entertainment-oriented vs. just 38% for sports.

“With our subscribers watching over 3 billion minutes of programming last quarter, fuboTV’s expanded content offering and our industry-leading commitment to a premium viewing experience has clearly resonated with consumers,” said David Gandler, co-founder and CEO, fuboTV. “This is great news not only for fuboTV but also for the virtual MVPDs industry as a whole. Cord cutters have clearly found a better alternative to cable TV.”

A year ago, NBCUniversal CEO Steve Burke interjected a seed of doubt in the fast growing virtual pay TV market, noting that his company had seen slowdowns in the sector from the perspective of program licensing.

Four earnings calls later, with what had been the fastest growing virtual MVPD (vMVPD), DirecTV Now, in a tailspin, and all the major services significantly upping their prices, Burke engaged investment analysts in a proverbial “toldja.”

“For maybe three or four calls in a row, we [have said that we] thought that virtual MVPD growth was probably unsustainable, and that's proven to be the case,” Burke said during Comcast’s Q1 earnings call Thursday. “They had promotional pricing and they would gain a fair amount of subs. And actually at one point the gain on the virtual MVPD side pretty much offset the loss on the traditional MVPD side. That trend, I think, is over.”

Related: Philo Becomes Latest vMVPD to Raise Rates

Like all cable companies confined to regional footprints, however large, Comcast sat on the sideline as satellite TV operators Dish Network and AT&T, as well as technology companies including Sony and Google, launched skinny programming bundles over the top. Fueled by low prices and steep promotional discounts, these services grew quickly from 2016 through the middle of last year.

AT&T’s DirecTV Now had been the fastest grower, expanding to nearly 2 million subscribers by the end of the second quarter of last year. It was around that time that AT&T realized it had around half a million users paying virtually nothing for the virtual service, and that the $45-a-month product was unsustainable.

After quitting promotions cold turkey and upping the price, AT&T executives declared DirecTV Now “sustainable” during their own earnings call this week. But the platform has lost 350,000 users over the last six months.

Within the Philadelphia office towers of Comcast, you will find no credit given to AT&T for trying to innovate its way out of the cord cutting problem.

“I think we all believe that [linear pay TV is] a quite challenged business model, and there was a bit of excitement as everybody rushed into the [vMVPD] business over the last year or so,” Burke said. “And that excitement now is going away.”

AT&T lost another 83,000 customers for DirecTV Now in the first quarter, bringing the live-streamed pay TV service’s subscriber losses to 350,000 over the last six months.

Speaking to investment analysts today, however, AT&T CEO Randall Stephenson said he expects to see DirecTV Now losses “stabilize” soon. “We might see some slight customer losses in the second quarter as the price increases continue to flow through,” he explained. “But the second half of the year should be decent.

In addition to reconfiguring DirecTV Now’s packaging—less channels are being offered now at a higher $50 entry-level price point—AT&T cut steep promotional campaigns cold turkey late last year.

But AT&T recently re-introduced DirecTV promotions, including the offer of a free Apple TV 4K to new sign-ups committing for four months.

Meanwhile, Stephenson also said the introduction later this year of DirecTV’s premium OTT product—which will deliver a linear-like quantity of networks live-streamed over a proprietary, self-installed thin-client set-top—will return AT&T to growth, at least in terms of streaming video subscribers.

“As we get into the second half of the year, and we roll out our thin-client video product, we’ll see subscriber losses lesson, particularly as we get into 2020.

Related: DirecTV Now Drops NFL Network

However, with 544,000 customers lost across its linear platforms, DirecTV satellite and AT&T U-verse, Stephenson is less optimistic about the growth path.

“We’re going to continue to see declines in traditional video products,” he said, “particularly in areas where we can’t bundle services.”

San Francisco virtual MVPD startup Philo has told its customers that it will stop offering its bottom-end, $16-a-month, 40-channel package to new customers.

Starting May 6, new signups will only have access to Philo’s higher 58-channel, $20-a-month package. The company will maintain the $16-a-month package for existing customers.

“We didn’t want to do that,” Philo CEO Andrew McCollum said in a note to customers.

He added, “When we looked at all of the costs of operating Philo—which increase over time—consolidating into a single $20 package was the best way for us to maintain the same offering we have today without raising prices for everyone, or having to cut back in places we strive to excel, like our customer support.”

Related: Philo Touts FreeWheel, Xandr, SpotX Among Advanced Ad Partners

Philo includes no live sports or news, and its channels primarily include the networks of its four media company investors—A+E Networks, AMC Networks, Discovery and Viacom.

The move basically constitutes a price increase for what is still the cheapest live-streamed virtual pay TV service. The move follows recent price bumps by DirecTV Now, Sling TV, YouTube TV and fuboTV.

All of these streaming skinny-bundled services are coming to terms with fast-rising programming costs. In addition to raising prices, these services are investing in advanced advertising to try to improve margins.

It was just last week that Philo announced a roster of its advanced advertising technology vendors, a list that included FreeWheel, Premion, Roku, SpotX, Telaria, Xandr and Verizon Media.

As rival DirecTV Now continues to stagger after abruptly ending steep promotional discounts, Sling TV has announced its own significant price cut.

Dish Network’s virtual MVPD will offer the two iterations of its platform, Sling Orange and Sling Blue, for $15 a month for the first three months, which is a 40% discount. Both packages are available combined for $25 a month, which is $15 better than the regular $40 price.

After shifting around 500,000 customers who were paying as little as $10 a month for DirecTV Now service last year, operator AT&T reported the loss of 267,000 DirecTV Now customers in the fourth quarter.

For its part, Sling TV saw narrowed growth in 2018, down to around 208,000 customers from estimated 2017 additions of more than 2017, the latter according to analysts estimates. The platform grew by only 50,000 customers in the fourth quarter.

Related: Sling TV Adds 50K Subscribers in Q4

A sign-up discount will further erode Dish’s average revenue per customer (ARPU), which is already falling at a rapid pace with low-margin Sling TV customers replacing more profitable linear subscribers in the dwindling Dish customer base.

Pay TV average revenue per user (ARPU) dropped from $86.43 for Dish in 2017 to $85.46 last year. In 2016, the operator’s pay TV ARPU was $88.66.

While severe fourth-quarter losses for DirecTV Now may have led some to believe that the once fast-growing virtual pay TV sector was in its fifteenth minute of fame, these services now control an ever-larger marketshare of U.S. pay TV homes.

According to BTIG Research, there were around 7.7 million subscribers to Sling TV, DirecTV Now, Hulu+ Live TV, Sony PlayStation Vue, YouTube TV, fuboTV and other live-streamed pay TV bundles at the end of 2018.

With linear pay TV subscriptions declining to 79.6 million at the end of Q4, vMVPDs controlled nearly 10% of the U.S. pay TV market.

At the end of 2017, BTIG estimated that there were around 4.7 million vMVPD subscriptions in the U.S. accounting for only around 5% of the domestic pay TV market.

Certainly, the sector ended 2018 on a downer note, with AT&T’s DirecTV Now reporting the loss of 267,000 users in the fourth quarter—a loss the company said that stemmed from having around 500,000 users end steep promotional discounts last year.

So other than DirecTV Now’s promo hangover, how is the vMPVD market really doing? Since there’s still so little in the way of self-disclosed subscriber data, it’s kind of tough to really say definitely.

The only other vMVPD besides DirecTV Now to publicly report subscriber data is Dish Network’s Sling TV, which said it grew by 208,000 subscribers in 2018. Since Dish didn’t start breaking out Sling TV numbers until the beginning of 2018, we have only the guesses of analysts to suggest that’s a deceleration of growth.

Leichtman Research, for instance, estimated that Sling TV grew by around 700,000 users in 2017.

Related: Sling TV Adds 50K Subscribers in Q4

How about the rest of the sector? From Hulu to YouTube TV to Sony Vue to fuboTV, none of the other major vMPVD services has announced a subscriber count recently.

For its part, BTIG estimates that Hulu+ Live TV had around 1.8 million customers at the end of Q4—a benchmark that would surpass the 1.59 million users DirecTV had when it stumbled into the New Year.

Research company The Diffusion Group also believes Hulu has surpassed DirecTV in subscribers.

(Our question: While Hulu recently boasted the addition of 8 million users across its streaming platforms, it notably did not toot its horn about its vMVPD being in second place. Wouldn’t that be something they’d brag about?)

In any event, outside of DirecTV Now, the widely unprofitable vMPVD sector does appear to be still growing in market share, and dragging down ARPU as it does.

At Dish, for example, pay TV average revenue per user (ARPU) dropped from $86.43 in 2017 to $85.46 last year. In 2016, the operator’s pay TV ARPU was $88.66.

Meanwhile, one analyst estimated last year that YouTube TV was losing around $60 million a year for Google.

Related: Google’s Pichai: YouTube TV is ‘an Exciting Product’

The U.S. vMVPD market is so competitive and low-margin right now, that David Gandler, CEO of fuboTV, predicted that “one or two” competitors could hang it up this year.

However, with operators convinced that the financial fortunes of these platforms will improve dramatically once they get to scale and get supported by advanced advertising, none of them seems close to calling it quits.

For example, Google CEO Sundar Pichai called out YouTube TV as an “exciting product” during the company’s Q4 earnings call earlier this month.

fuboTV—which operates more advantageously under the tough market conditions as a well-funded start-up—just announced a major carriage deal with Viacom.

Meanwhile, PlayStation Vue—which has quietly crept along since the vMVPD category was first created back in 2015—doesn’t appear set to throw in the towel.

With Sony on the cusp of releasing the fifth generation of its PlayStation gaming console, the company appears to be beefing up staff for its vMVPD at its Los Angeles operational headquarters. 

With operators in the suddenly struggling market for over-the-top pay TV services beginning to openly lament their lack of profitability, and one major player expressing intent to tweak its pricing and packaging, fuboTV co-founder and CEO David Gandler told MCN this week that he wouldn’t be surprised if at least one significant vMVPD service shut down in 2019.

“It’s a tough market,” said Gandler, who was careful to note that fuboTV’s just announced expansion into Spain reveals that his startup may not be feeling the same pain as its corporate behemoth competitors.

“If you can’t figure out how to make money on this, why would you do it?” Gandler added. “I think you’re going to see people saying, ‘Either I missed something, or we’re not executing.' I would anticipate that there will be companies that will have to rethink their strategy.”

Related: AT&T’s New DirecTV Now Plan: ‘Thin Out’ Bundle, Reset Price Point to ‘$50-$60’

That already happened this week. AT&T CEO Randall Stephenson told investors that the company plans to “thin out” the bundle for vMPVD DirecTV Now and adjust its monthly price up to $50 to $60.

“We were asking this DirecTV Now product to do too much work,” Stephenson said. "So we’re thinning out the content and getting the price point right; getting it to where it’s profitable.”

Meanwhile, during Dish Network’s third quarter earnings call last month, company Chairman Charlie Ergen expressed frustration at the low-margin business model of Sling TV.

Asked if Sling TV is profitable, Ergen remarked, “It depends on how you look at it. But under Charlie Ergen's definition of profitability, I think I'd like to make a little bit more money than we're making today.”

FuboTV is competing as a well backed start-up against a range of large corporately backed competition, which also includes Google’s YouTube TV and Sony PlayStation Vue.

With a recent $75 million funding infusion, fuboTV is in expansion mode, becoming the first vMPVD to enter an international market at a time when its competitors are rethinking strategy.

“Until now, the virtual MVPDs are alike in that they have no experience in international markets,” Gandler said. “It is not easy to launch a virtual MVPD, and it is much harder without the ability to leverage millions of existing subscribers, retail stores, customer call centers and other factors that have helped them have early success in the U.S. Our advantage is that we have never had that leverage, yet we have been able to build a successful business around our own tech stack, the ability to be nimble and, frankly, out-punch our weight class. As a digital native company that was created for this OTT space, we are tapping into the playbook that has worked in the U.S. to have success overseas.”

Whatever optimism there was around the prospects for traditional pay TV video subscriber growth was snuffed out in the third quarter, as the sector shed more than 1.2 million customers, according to Kagan, a unit of S&P Global Market Intelligence.

Accelerated satellite TV subscriber losses and sluggish growth from virtual MVPDs like Sling TV and DirecTV Now stamped out any improvements in the cable sector.

Kagan's numbers are higher than MoffettNathanson principal and senior analyst Craig Moffett's estimates -- earlier this month he saw the sector, including vMVPDs, declining by about 709,000 subscribers in Q3. According to Moffett, traditional pay TV companies lost 1.1 million video customers while vMVPDs added 414,000 customers. Kagan did not break out individual sector results, but the message was the same -- cord cutting appears to be accelerating.

According to Kagan, vMVPDs Sling TV, DirecTV Now, Hulu with Live TV, YouTube TV and PlayStation Vue gained an estimated 2.1 million subs in the trailing nine months, compared a decline of 2.8 million in the traditional segment.

Kagan said residential penetration rates were 76.2% when traditional and vMVPDs were considered. Satellite -- led by a loss of 367,000 customers at Dish -- had its worst quarter on record according to Kagan, with a loss of 726,000 subscribers. Cable operators, according to Kagan, lost nearly 1.1 million subscribers year-to-date as of Sept. 30, the sector’s worst 9-month performance since 2014. Traditional telco subscriptions were down by 94,000 in the period, with Verizon losing 63,000 subscribers on its own.

Net new subscriber losses ballooned at Dish Network in the third quarter, as a high-profile carriage dispute with Spanish-language broadcaster Univision contributed to a decline of 367,000 satellite TV customers in the period, while gains at its virtual MVPD Sling TV continued to slow.

All together, Dish lost 341,000 net new customers in Q3, compared to a gain of 16,000 subscribers in the prior year. The satellite TV unit shed 367,000 customers in the period (compared to a loss of 192,000 in Q2), while Sling TV gained 26,000 subscribers, down from the 41,000 it added in Q2. 

Revenue was down 5% to $ 3.4 billion in the quarter, while net income increased 45% to $432 million from $297 million in the prior year.

Univision went dark to Dish customers on June 30, after it could not reach a carriage agreement. Dish has argued that Univision is asking for exorbitant rate increases and has hinted that the blackout of its channels could be permanent. 

Univision, which includes its broadcast stations and cable channels Uni Mas and Galavision has said it is only looking for fair compensation. And it has warned that its popular sports network, Univision Deportes, could be the next network on Dish’s chopping block. 

Dish’s latest carriage dispute is with HBO, which went dark to the satellite TV service’s customers on Nov. 1.  While money is essentially at the center of the dispute, Dish has alluded to HBO demands for increased subscriber guarantees as a big reason for the impasse.

Related: Dish’s Dilemma 

Dish shares were down 4.7% to $30 each in premarket trading Wednesday.

In a research note, MoffettNathanson principal and senior analyst Craig Moffett estimated that about 10% of Dish’s total customers subscribe to its Spanish-language DishLatino package.

“… [A]nd for these subscribers, Univision is almost certainly the majority of their viewing,” Moffett wrote. “Dish’s satellite subscriber losses were much worse than expected, with subscriber growth re-accelerating to an 8.7% decline, no doubt in no small measure because of the Univision blackout. After three months off the air, it’s no surprise that DishLatino subscribers left.” 

Continuing to build out the bundles of its four programming tiers, virtual pay TV operator Sony PlayStation Vue announced a series of minor channel additions today.

The national feeds of the Tennis Channel and Stadium will be added to the vMVPD’s $59.99-a-month Elite tier. Three Stadium Event channels will also be added to the sports add-on package.

Meanwhile, Comet TV will be added to the $49.99-a-month Core package.

The additions do not affect the $44.99 basic “Access” tier, not do they impact the highest end $79.99 Ultra bundle.

The latest channel additions come after Vue signed local affiliate deals with Sinclair and Tribune stations, and expanded its playability to Apple and Amazon devices. 

A day after AT&T reported steep deceleration for DirecTV Now, NBCUniversal CEO Steve Burke confirmed that growth for upstart virtual pay TV services is indeed “flattening.”

Burke made his remarks during the third quarter earnings call for parent company Comcast, when pressed by analysts to talk about subscriber growth for NBCU cable channels.

With DirecTV Now adding 342,000 users in the second quarter, subscriber growth for programmers had been largely driven of late by vMVPDs, a category of live streaming services that also includes Dish Network’s Sling TV, Hulu with Live TV, YouTube TV, Sony PlayStation Vue and fuboTV.

In fact, DirecTV Now had been the category’s fastest growing service. But with AT&T ending most of the aggressive promotions it used to sell the platform, subscriber additions fell to 49,000 in the third quarter.

AT&T said it is now in the process of reviewing the service’s skinny bundle offering. 

Entertainment-only virtual MVPD Philo has added The Hallmark Channel, Hallmark Drama and Hallmark Movie & Mysteries to its skinny $16-a-month, 40-plus-channel bundle.

The San Francisco start-up said Hallmark has been the most requested channel from its subscribers, who don’t get any sports but enjoy a low-cost selection of networks including A&E, AMC, BBC America, Comedy Central, HGTV, Food Network, MTV, Nickelodeon, History Channel, OWN, and Viceland, just to name a few channels.

Related: Philo Adds Revolt, aspireTV and UPtv to $20 Streaming Package

Philo is promoting the timelines of the acquisition, with Hallmark joining up just as its “Countdown to Christmas” slate of original TV movies ramps up—the first of 22 new themed movies premieres Saturday with “Christmas at Pemberly Manor.”

Hulu is adding Starz and Starz Encore to its list of premium add on networks.

Starting Tuesday, subscribers to Hulu's live and on-demand services  can pay $8.99 to add the Lionsgate-owned premium networks to their channel lineup.

The addition coincides with the season four premiere of Starz original series Outlander on Nov. 4.

Notably, repeats of another flagship Starz original series, Power, are already available on Hulu’s subscription video on demand service under a previous deal.

Related: Will Disney Sell Its Hulu Stake to Comcast?

Hulu already provides add-on access to HBO, Showtime and Cinemax. 

Sony’s PlayStation Vue streaming service has become the first virtual pay TV platform to become available through the Apple TV app, the native application for iPhone, iPad and Apple TV devices.

The Vue app has been available for Apple's iOS and tvOS devices for some time. But this still matters to owners of those devices, since they don’t have to toggle between separate apps to find their programming. Users still need to download the Vue app to their device and log into their account. However, once they do, the Apple TV app will pull all of the live and on-demand programming they get through Vue and place it into relevant Apple TV buckets.

Related: Sony Adds 200 Locals to PlayStation Vue, Stays in vMVPD Fight

For example, on-demand content will all be placed into the “Watch Now” section of the Apple TV app, while shows a viewer has already started will be available in the “Up Next” bucket.

The Apple TV app has supported TV Everywhere apps from individual programmers like CBS and AMC for some time. But to import the content into the Apple TV app, users had to download each TVE app they wanted and authenticate their multi-channel subscription.

Notably, once users select content pulled from Vue, the Apple TV app will direct the user back to the Vue app. That’s how the Apple TV app works for content from other devices, as well.

Vue is an outlier among vMVPDs, with others hesitant to give up control of the user experience. But Vue could certainly use a good user experience edge in a competitive market.

Vue launched more than three years ago, but according to Strategy Analytics estimates released over the summer, only has around 745,000 subscribers. 

Virtual MVPD Philo is adding three networks to its "premium" $20-a-month tier, which now includes 50 channels.

The additions include aspireTV, Earvin “Magic” Johnson’s lifestyle channel focused on the icons and trendsetters of black culture; Revolt, Sean “Diddy” Combs’ hip-hop-themed network targeted to Gen Z audiences; and UPtv, a family-oriented network featuring hit archival TV shows such as Gilmore Girls, Home Improvement and America’s Funniest Home Videos, was well as PG-rated and safer box-office hits of yesteryear.

Related: Philo Unleashes Entertainment-Focused OTT TV Service

The additions come as Philo nears its one-year mark. The channels are added to the operator’s premium tier, which includes A&E, AMC, Comedy Central, Discovery Channel, Lifetime, Logo, MTV Live, Nick Toons, TLC, Travel Channel, VH1 and Viceland. 

In an announcement touting a number of Q3 benchmarks this morning, start-up virtual pay TV operator fuboTV said its approaching 250,000 users as of the end of September.

The count represents significant progress over the 100,000 figure from September 2017, the last time the virtual MVPD provider released subscriber metrics. However, it is markedly less than a Strategy Analytics estimate released over the summer, suggesting that the service had acquired around 325,000 users through the second quarter.

Related: fuboTV Says It's Licensed 486 Local Stations, Ranks 3rd Among vMVPDs

FuboTV also said that its average revenue per user was up more than 80% to $40 at the end of Q3, vs. $22 in September of 2017, with the operator having to rely less on aggressive promotions to acquire subscribers.

Meanwhile, the streaming company said its annual run rate is up 259% year over year to $102 million.

Also releasing some usage metrics, fuboTV said time spent on its platform per user was up 364% year over year to 51 hours in September. App downloads were up 418% to 752,000.

“What our team of less than 150 employees has built—from the ground, up, despite our competition having access to tens of thousands of engineers alone—impresses me every day, and it should put the streaming TV industry on notice,” said David Gandler, fuboTV co-founder and CEO. “Our September results and year-over-year growth are proof of our success. We have and will continue to deliver the most optimal quality experience for our customers and strong value to our investors, as we take the company to the next level.”

Having introduced itself all the way back in January 2016 at CES, at a time when the virtual MVPD market was at its infancy, Atlanta-based OTT start-up Vidgo has finally announced pricing and packaging for its live-streamed service.

The company has identified a niche in the Latino market, and is offering three vaguely sketched out product tiers for its vMVPD: the $19.99-a-month “Latino” bundle with “20 channels of the most popular Spanish entertainment and sports channels from Latin America”; the $29.99 Latino Mas package with “30 channels from the USA, Central and South America, and Spain”; and the $39.99 Core tier, which has few details.

Vidgo CEO Shane Cannon told Light Reading that his company will offer a slate of live and VOD programming consisting of both local broadcast and cable channels, with cloud DVR. The service will be playable, he said, on iOS and Android mobile devices, Roku, Apple TV and Amazon Fire TV.

Vidgo hasn’t announced a launch date, but tweeted back on Sept. 1, “Internal Beta underway in preparation for launch.”

Truly, this startup has walked a long road.

In April, Vidgo Cannon touched on the company’s target market while announcing a deal with Harmonic to use the vendor’s VOS media processing platform.

“We’ve identified a significant underserved market in the United States, with millions of consumers that are currently not part of the pay TV ecosystem,” Cannon said.

Vidgo’s Crunchbase profile lists the company being founded in 2017 and receiving $500,000 in private funding to date.

However, at CES 2016, company cofounder Robert Kostensky, a former DirecTV sales and and distribution executive, told reporters that he and another unnamed cofounder had been developing the start-up for the previous seven years, and that Vidgo was preparing to launch in 15 cities.

"We're just dotting the I's and crossing the T's," Kostenky said at the time. Kostenksy is now working for Atlanta-based consulting firm Last Mile Inc., according to his LinkedIn profile, having departed Vidgo in August 2017.

At the time, the only vMVPDs in the market were Dish Network’s Sling TV and Sony’s PlayStation Vue. The virtual pay TV market, however, now has nearly a dozen participants.

Cannon, meanwhile, is a former AT&T wireless executive who is listed on LinkedIn as having joined Vidgo in 2015 as chief marketing officer. He was named CEO in January. 

Start-up virtual pay TV provider fuboTV said it has added eight more local affiliate stations, putting the total number of CBS, Fox, NBC, CW and Telemundo locals under contract at 486.

This total ranks the start-up third among vMVPDs, according to recent data published by CNET and others. Hulu with Live TV ranks first, with more than 600 local stations under contract, followed by YouTube TV with more than 500. The tallies put DirecTV Now at around 360 locals, and in fourth place. 

Notably, fuboTV has yet to sign a licensing deal with The Walt Disney Company, so ABC stations don’t factor into its mix.

Related: fuboTV Raises $75M More

With the addition fo WAKA-TV in Montgomery, Alabama; KZTV-TV in Corpus Christie, Texas; WKBT-TV in La Crosse-Eau Claire, Wisconsin; and WCBI-TV in Columbus, Georgia, fuboTV has local coverage of CBS in 71% of the country.

With WSFA-TV in Montgomery, KRIS-TV in Corpus Christi and WEAI-TV in La Crosse-Eau Claire, coverage for NBC is up to 76%.

And with WLAX-TV in La Crosse-Eau Claire in the fold, coverage of Fox is at 93%.

With vMVPDs carrying many of the same channels, it's retrans deals with local stations that provide an edge in any given market.

Meanwhile, fuboTV also announced the addition of RAI Italia as a $7.99-a-month add-on, giving its subscribers access to Series A soccer matches. 

Hulu has confirmed that it’s virtual MVPD, Hulu with Live TV, has surpassed 1 million customers.

The service launched in May 2017, combing Hulu’s already popular SVOD service with a virtual platform delivering more than 50 live broadcast and cable channels, all packaged for $40 for month.

It’s a key benchmark for Hulu, which in terms of vMVPD size, ranks only behind only the two satellite TV operator-backed platforms, Sling TV (2.344 million subscribers at the end of Q2) and DirecTV Now (1.809 million users as of June 30).

Hulu reported in May that it had reached 800,000 vMVPD users. Across all platforms, Hulu has more than 20 million subscribers.

Hulu confirmed the 1 million figure after it surfaced in a USA Today report Monday, detailing the company’s latest national advertising campaign.

The first star-laden national TV spot for that campaign debuted Monday night during the Prime Time Emmy telecast—an event during which Hulu original shows took home only four trophies.

Looking build a full, robust pay TV feature set into its Sling TV streaming ecosystem, Dish Network today announced that it’s adding DVR functionality to its AirTV device.

The upgrade is free to AirTV users but it will require them to purchase an external USB hard drive up to 2 terabytes in size.

The new “Local Channels DVR” will let Air TV users record and watch local channels, both in the home and away, using the newly upgraded Sling TV app. Notably, Air TV users don’t have to have a subscription to the Sling TV virtual MVPD service to use the Local Channels DVR feature.

AirTV’s dual tuner lets users record up to two shows at once, with live and recorded content viewable from any device supported by the Sling TV app. The Local Channels DVR will show up next to the Cloud DVR content area of the app.

Sling TV is the most widely distributed vMVPD on the market, with more than 2.3 million users. And its $20-a-month base tier is among the least expensive, eschewing local broadcast channels.

Dish is trying to work around that with AirTV, a $120 device that sits on the users Wi-Fi network and connects to an over-the-air antenna. Through the user’s Wi-Fi network, the device streams local channels to mobile and OTT devices, both in and out of the home, that have the Sling TV app.

Dish has not disclosed how many AirTV devices it has sold.

"The Local Channels DVR rounds out the complete cord-cutting experience for those wanting to integrate free local channels and DVR with a streaming service like Sling TV," said Mitch Weinraub, director of product development for AirTV, in a statement. "Millions of Americans are embracing over-the-air antennas as part of their cord-cutting solution, and the ability to take their live and recorded content in and out of home with AirTV's Local Channels DVR is just an added bonus."

With linear pay TV subscriber levels pulling back from the 3.5% attrition rates seen in 2017, equity research firm Cowen & Company believes the traditional cable, satellite and telco TV market might be stabilizing … at least until Generation Z enters the workforce.

“Our explanation for improvement was that the competitive industry simply needed to take a breather,” Cowen said in a recent report lead-authored by analyst Gregory Williams.

“Losses escalated in 2017 after the emergence/traction of deep-pocketed, full service vMVPD’s (YouTube TV, Hulu Live TV, DirecTV Now, and Sling TV) that we’d argue do not have the economic mandate for profit as a formidable competitor to traditional video,” Williams added. “With these vMVPD providers already in place, and no vMVPDs of similar stature entering the market for the foreseeable future (outside of perhaps Apple TV), we argue that pay TV loss trends have leveled out (until Gen -Z enters the workforce in 2021).

The Cowen chart directly below indicates virtualized, live-streaming MVPD services have been successful at capturing some of the defectors from the linear ecosystem—and that the exchange seems to be slowing down a bit.

Notably, Cowen believes vMVPDs tend to skew a little older, having “appeal to the older generation of cord cutters who still consume video in the traditional linear fashion.”

Cowen seems bearish about the prospect of next-generation viewers adopting what are essentially live-streamed version of traditional bundles. And a chart provided to MCN by another research company, The Diffusion Group, further outlines the challenge: The current generation of 18-24-year-olds doesn’t just show a taste for over-the-top consumption of video, it shows an outright preference. 

After introducing customers to its 4K HDR beta over the summer with World Cup coverage, start-up virtual MVPD fuboTV has announced that three upcoming college football games on FS1 will be available in the next-generation format.

Friday night’s matchup between San Diego State and Stanford, as well as a Sept. 8 game pitting Western Michigan against Michigan, and a Sept. 15 contest between Fresno State and UCLA, will all be streamed to fuboTV users in 4K.

UPDATED: An earlier version of this story said the games would also be in HDR10, but a fuboTV rep told us that's not necessarily the case.

Related: fuboTV Preps 4K Beta

FuboTV users will need a 4K capable streaming device from Amazon, Google, Roku or Apple, or a capable Android smart phone. In the living room, they’ll also need HDMI 2.0/HDCP 2.2 compatible cables and a proper 4K display.

Fresh off a $75 million funding round, fuboTV continues to plug live sports—and 4K HDR—as a means of differentiating itself from corporate vMVPD rivals.

The company is about to kick off its next national TV campaign, a humorous series called “Don’t Compromise.”

While PlayStation Vue, one of the first two virtual MVPDs to enter the market, appears to have stagnated in subscriber growth, and has suffered some major programming defections, Sony seemingly remains committed to the product.

Case in point: The company has announced the addition of 200 local ABC, FOX and NBC affiliates, bringing its total bundle of local broadcast stations under retransmission agreement to around 450. (Sony has a list of its available locals here.)

Users in the relevant markets will now be able to live-stream local network affiliates rather than just receiving on-demand prime-time programming from the major broadcast networks tied to these stations. (Notably, according to Cord Cutter News, users won't have DVR access to these channels.)

Related: Sony Boosts Vue with PlayStation Cloud Remote, Sign-up Promotion

Carving out affiliate deals is an tedious, time-consuming expensive process. But both YouTube TV and Hulu with Live TV—which came into the vMVPD market two years after PlayStation Vue—have had audience-growth success with an aggressive strategy of adding local stations.

These services haven’t publicly released their subscriber numbers. But according to Strategy Analytics estimates released last week, Vue has around 745,000 users compared to around 955,000 for Hulu Live, even though the former has been in the market far longer.

Related: Sony PlayStation Vue Launches ESPN College Extra

Vue also announced the addition of ESPN College Extra. And earlier in August, Sony debuted a new PlayStation 4 controller more adept at TV watching that video game play.

For Sony, these are important indicators that it remains firmly behind its three-year-old vMVPD, which lost 24 affiliate tie-ups in 23 markets in May when it didn’t renew its retrans deal with Sinclair Broadcast Group. Sony also let its carriage deal with Viacom lapse last year.

While not yet very profitable for any of the more than half-dozen major participants involved, virtual pay TV services continue to add customers. But the market is crowded with services priced at around $40 a month and offering basically the same channels. For users, the decision as to which service to choose often comes down to which platform has the right combination of local channels and regional sports networks in their individual market. 

In May, Sony’s CEO Kenichiro Yoshida told reporters that Sony has no plans to shut down PS Vue, as it is bringing in useful user data.

After securing a $75 million funding round in April, its second major cash infusion, start-up virtual pay TV operator fuboTV is about to launch its second national TV ad campaign.

The first in the series of four 30-second spots under the don’t “Don’t Compromise” campaign banner will begin running in September during national TV coverage of the NFL, NBA and Major League Baseball games, as well as on regional sports networks.

Related: fuboTV Raises $75M More

The broadly targeted spots will feature adults enduring the silly consequences of modern-life compromises, but who ostensibly eschewed giving up ground on their TV package.

As is often the case, the video market share of cable companies is a major target. 

“Last year's campaign targeted male sports fans who wanted the most sports for the least money. Today, we're leading with sports but, with the addition of premium entertainment and news networks to the lineup, we’ve built a true cable replacement for the whole family. More value means no compromise.” said Alberto Horihuela, co-founder and chief marketing officer, fuboTV, in a statement.

fuboTV hasn’t released an official subscriber count, but Strategy analytics put out an estimate for all major vMVPD operators last week that pegged fubo’s customer base at around 325,000. MCN ran that by a fuboTV rep last week, who didn’t confirm the figure … but didn’t challenge it, either. 

You can watch fuboTV's latest spots below:

"Yoga"

"Cat"

Sony Corp. has debuted a new remote control for its PlayStation 4 console, one more adept at lean-back TV watching than game play.

And with the debut of the $30 Cloud Remote, Sony is offering a free 30-day trial of its virtual MVPD service, PlayStation Vue.

The new device pairs with the console via BlueTooth and can also control certain TV monitor functions including volume and power.

Related: PlayStation Vue Busts Out

The handheld device can be used in lieu of PS4’s native DualShock 4 controller, which is more fit for gaming. It will hit the market on September 19, available only at GameStop locations and on Amazon.

According to figures released by Strategy Analysts, PlayStation Vue ranges as the fourth biggest vMVPD, amassing around 745,000 subscribers since it debuted in 2015.

Among the major virtual pay TV services, Vue’s year-over-year growth of 59.4% is the second slowest next to market leader Sling TV, which expanded by only 25.9% from Q2 2017 to Q2 2018. 

DirecTV Now has ended the beta test of its cloud DVR and, according to one published report, is preparing to launch 120-hour version of the product as an add-on service.

UPDATED: In May, parent company AT&T announced that it would debut an add-on cloud DVR for its virtual pay TV service that delivered 100 hours of storage for $10 a month. However, enthusiasts blog BestAppleTV.com is reporting that DirecTV Now will now offer multiple tiers of its add-on cloud DVR ranging from 50 hours of storage to 120 hours. 

An AT&T rep denied that the company's DVR add-on plan has moved beyond the initial May announcement of a 100-hour, $10-a-month add-on. 

The company recently began notifying customers participating in the beta test that, starting on August 29, their free 100-hour True Cloud DVR beta will be converted to the 20-hour version that will be a standard offering on all DirecTV Now subscriptions going forward.

For those customers, AT&T said it will erase any content more than 30 days old. It will keep up to 20 hours of the most recently recorded video.

Related: DirecTV Now Seeking Cloud DVR Testers

Speaking during AT&T’s first quarter earnings call in April, AT&T CFO John Stephens said new features like cloud DVR and pay per view will help enhance the margins of DirecTV Now, which analysts suspect loses money in its current iteration.

“These new services will add new revenue streams and help counter some of the revenue and margin pressure we are dealing with,” Stephens explained.

AT&T launched its cloud DVR beta in the third quarter of last year. It’s unclear as to how many subscribers it hooked into the program.