nScreenMedia OTT multiscreen media analysis

7% U.S. consumers use Sling TV, DirecTV Now, PS Vue

US TV Everywhere users Q4 2016

The common belief is that virtual MVPD services like Sling TV are not making a big impression. New TiVo data shows this is not true, in more ways than just in terms of subscriber acquisition.

Virtual MVPDs make a dent in pay TV

TiVo’s Q4 2016 Video Trends Report reveals that 6.7% of consumers say they already use a virtual multi-video program distributor (vMVPD.) The so-called skinny bundle approach has faced much skepticism since the first entrant, Sling TV, launched in February 2015. However, TiVo data suggests that vMVPDs are doing a good job picking up consumers that have decided to leave the pay TV fold. Since Sling TVs launch, in February 2015, the total number of traditional pay TV subscriber has declined 2.8M.

Most impressive is the fast start DirecTV Now has enjoyed. 2.8% of consumers participating in the TiVo survey say they use the monthly subscription service. This despite the teething troubles the service has been experiencing. Sling TV continues to make progress, increasing the number of users from 1.6% in Q4 2015 to 2.1% in Q4 2016. Finally, PlayStation Vue, which launched a year ago, has 1.6% consumers using it.

Further evidence of the influence of vMVPDs

Planning to change pay TV or cut-the-cord Q4 2016There is other evidence that vMVPDs are influencing the attitudes of consumers. TiVo recorded the highest number of people saying they planned to cut-the-cord in the next 6 months. 7.6% said they are planning to shed their pay TV subscription, up 2% YoY and 3.4% since Q4 2014. 3.2% say they plan to switch their pay TV service for an online app or rental service.

TiVo asked if consumers would like to pay for only the channels they watch. 76.6% said they would like to do this, up 3% YoY. However, TiVo also asks consumers how much they would be prepared to pay for their ideal top 20 a la carte channels. (81% of consumer say they typically watch 10 channels or less, so 20 channels are more than enough to cover most people’s viewing needs.) Interestingly, the average price consumers cited was $28.87 a month, down 12.3% over Q3 2016.

It’s interesting to speculate why consumers suddenly see their top 20 channels as being worth less. Certainly, SVOD services are exerting considerable pressure on consumer price expectations. vMVPDs could be adding more directly to the price expectations. For those consumers that have investigated Sling TV’s $20 for 20+ channels, or DirecTV Now’s special offer of $35 for 100 channels, price expectations could have been reset to between $0.35 and $1 per channel. This far below the $1.44 indicated by the TiVo data.

Pay TV makes progress with TV Everywhere

While pay TV might not be able to fix the affordability problem versus vMVPDs, operators are doing much better on the accessibility advantage enjoyed by digital native services. The number of people saying they access their provider’s TV offering on a tablet, smartphone, or computer increased 9.4% year-over-year (YoY) to reach 30.9%.

Awareness of TV Everywhere services also increased significantly, up 9.1% YoY to 49.1%. Even more impressive is the fact that nearly two-thirds of those aware of operator TVE portals have accessed them.

NFL not doing well

Q4 2016 NFL viewing up or downAs was widely discussed, NFL audiences were down significantly last season. Since the TiVo survey was fielded late in the 2016-17 NFL session, the company decided to investigate this phenomenon and asked consumers about their game viewing habits. 18.4% said they watched fewer NFL games and 10.4% said they watched more. This gives the NFL an unattractive net promoter score (NPS) of -8.

The number one reason for people watching less was busier schedule (36.1%.) 25.9% didn’t think the games were exciting enough, and 21.3% said there were too many commercials. Interestingly, 23% responded “other” and wrote in their specific reasons. Turns out a lot of people were turned off by political statements like Colin Kaepernick kneeling during the national anthem. Nearly half of the written responses cited such political issues as the reason they watched less. Something for Roger Goodell, NFL commissioner to ponder during the off-season.

Why it matters

The common belief is that virtual MVPD services like Sling TV and DirecTV Now have not made much of an impression.

TiVo data shows this is not true, in more ways than just subscriber acquisition.

The main tool operators wield against digital native services is TV Everywhere, and it is doing better.

TiVo data shows bringing politics into NFL games is turning off a significant portion of the audience.

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One Comment

  1. Is this consumer survey data from the old Digitalsmiths team? If so, those reports do not include sufficient discipline for my taste in terms of citing margins of error and confidence levels. Surveys can be very powerful but when you are taking about low single digital percentages, they get fairly unreliable. As we all know now from the election, margin of error is really important!

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