Cord-cutting looks to hit 1M in Q3 2017. Not coincidently vMVPDs gained nearly that many new subs in the same period.
vMVPDs add 0.9 M subs in Q3 2017
Deutsche Bank analyst Matthew Niknam says that virtual MVPD services added approximately 900,000 subscribers in Q3 of 2017.[i] It seems that many of these new subscribers could be coming directly from people cutting the cord. Five of the top seven pay TV providers have reported Q3 results, and their subscriber losses total to 632,000.[ii] When all the results are in, total pay TV losses could reach 1 million.
Nearly half of the gain by vMVPDs could have gone to DirecTV Now. AT&T reported that the service gained 296,000 subscribers. DirecTV Now has nearly 800,000 subscribers, according to AT&T.[iii] These data suggest that Sling TV, DirecTV Now, and PlayStation Vue are the big leaders in the vMVPD market. comScore says that those three services had approximately 3.1 million subscribers at the end of Q2.
That is not to say others are not making progress. For example, the sports-heavy service FuboTV passed the 100,000-subscriber mark at the end of September.
Sling TV partners with wireless operators
Last quarter PlayStation Vue and FuboTV announced an agreement with the National Cable Television Cooperative (NCTC.) The 850 NCTC members can bundle the two vMVDPs with their broadband services.
Sling TV is taking a slightly different tack, by bringing television to mobile. It has just agreed with the Competitive Carriers Association (CCA) to allow members to bundle Sling TV with wireless phone plans.[iv] The nearly 100 members of CCA includes rural, regional, and national wireless operators like Cellular One, Bluegrass Cellular, and Naked Mobile. CCA members service 120+ million wireless customers.
YouTube TV hits the big screen, without casting
YouTube TV has relied on the casting abilities of Chromecast and Android TV to appear on connected televisions. That is changing, starting this week.
A new app for Android TVs and devices releases this week.[v] As well, an app optimized for other smart TVs, such as from Samsung and LG, and connected TV devices, like Roku and Apple TV, will arrive before year’s end. Going the app route is a smart move by YouTube, for two reasons.
While half of Americans have a second screen with them (most often a smartphone) while they watch TV, many prefer to use the TV remote to control that experience.[vi] Putting YouTube TV on the TV means a user can pick up the TV remote to control the experience.
I have found the quality of the video from YouTube TV when casting to the TV via a Chromecast or Android TV to be unsatisfactory. Apps running on the smart TV or streaming media player from rivals Sling TV and DirecTV Now seem consistent to deliver much higher quality. Hopefully, apps for YouTube TV running on the connected TV will boost the quality to acceptable levels.
I have not been able to test the YouTube TV app yet on my LeEco Android TV or the AirTV Player. The YouTube TV app requires Android N or newer to run, and neither of my devices has that version. As soon as I receive the update, I will post here about the video quality.
Why it matters
As cord-cutting in the US accelerates, many of the ex-pay TV subscribers seem to be opting for one of the vMVPD services.
These services are working to make it easier for consumers to find them by partnering with broadband and wireless providers and expanding features and platform availability.
[i] Daniel Frankel, DirecTV Now, Sling , other vMVPDs added 900K subscribers in Q3, analyst says, FierceCable, 27 Oct 2017
[ii] Daniel Frankel, Cord cutting hits 632K for Q3 with bulk of top platforms reporting, FierceCable, 27 Oct 2017
[iii] Jeff Baumgartner, DirecTV, DirecTV Now Add CBS Fare to VOD Vault, Multichannel News, 30 Oct 2017
[iv] Jeff Baumgartner, Sling TV Teams Up with Competitive Carriers Association, Multichannel News, 25 Oct 2017
[v] Dade Hayes, YouTube TV Rolls Out Living-Room App In Cord-Cutter Charm Offensive, Deadline, 30 Oct 2017
[vi] Videoedge, 88% of Millennials Use Second Screen While Watching TV, Videoage, 20 Feb 2016