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Live TV Services Don’t Align with Some TV Consumers

Live TV” Services Don’t Align with Some of TV Consumers – Virtual MVPDs (including the just-launched Hulu Live TV service) were developed as a less-expensive alternative to traditional MVPD subscriptions. But over the time these services have been available, there’s been no appreciable drop in the number of viewers who subscribe to pay TV.

Why haven’t Virtual MVPDs made more of a dent in pay TV subscription?

According to Hub’s annual “What’s TV Worth” study, 88% of viewers with broadband have a pay TV subscription—statistically unchanged from 90% in 2014. The two virtual MVPDs that have been around the longest—Sling TV and PlayStation Vue—each have penetration levels of only 6%.

The research uncovers two key factors that explain why Virtual MVPDs have not converted more pay TV viewers:

First, they don’t satisfy some of the most important consumer needs from a TV service: In the survey, viewers ranked the importance of 26 attributes in their decision on which TV services to choose. The most important categories were:

1. Depth of catalog: A large volume of shows and episodes from both current and past seasons
2. Viewing experience: Picture quality, lack of buffering, etc.
3. Cost: Lower price than other sources
4. Ad-Free: No commercials
5. Viewing features: Ability to pause, rewind, fast forward
6. DVR: Ability to record shows to watch later

Then viewers were asked to rate the strengths of the Virtual MVPDs they use, on the same list of attributes. Few of the top viewer needs were also seen as strengths of, for example, Sling TV or PlayStation Vue.

Sling TV: Only low price and picture quality were among the top 5 strengths of Sling TV
PlayStation Vue: Picture quality was the only high-priority need in PS Vue’s top 5 strengths

Second, Virtual MVPD positioning is built around live TV—but access to live TV has become a relatively low priority for viewers:

Watching live falls low on the list of consumer needs: The ability to watch shows at the same time they air ranks 10th on the earlier list of attributes consumers consider when choosing a TV service.
The amount of TV viewed live has been dropping steadily: Consumers estimate that only 35% of their total TV viewing time goes to live TV. That’s down 13 points from 48% in 2014.
Especially among key targets for Virtual MVPDs: Among Millennials, only 27% of all TV viewing is live.

“TV pundits have been predicting the demise of traditional MVPD service from the moment inexpensive online alternatives were introduced,” said Peter Fondulas from Hub, who co-authored the study. “But that still hasn’t happened, because competitors haven’t matched pay TV’s trump cards: the widest variety of current content, the ability to easily record that content and watch at a time that’s convenient, and the ability to fast forward through ads with their DVR.”

“Part of the big appeal of platforms like Netflix is that they are the ‘anti-TV’. Virtual MVPDs are different from pay TV, but in a more incremental way: they’re still bundles of networks. And their gaps in content or features are enough to keep many consumers from switching from pay TV, even though the price is lower,” said Jon Giegengack, co-author at Hub.

“What’s TV Worth” was conducted among 2,026 US consumers with broadband and who watch at least 5 hours of TV per week. The data was collected in April 2017. An infographic and excerpt of the report are available as a free download from Hub Entertainment Research.

Hub Entertainment Research is a market-research firm with deep expertise in television, movies, gaming, music, publishing, and sports: anywhere that entertainment and new technology overlap. In the television industry, Hub analysts work with MVPDs, networks, content creators, and digital distributors. Our job is to help our clients negotiate new risks, act upon emerging opportunities, and reveal the clearest paths to success in a changing marketplace.

For more information, please visit us at

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