Multichannel Video Programming Distributor (MVPD)
What is an MVPD?
A Multiple Video Programming Distributor (MVPD) is a media distribution company that provides multiple television channels as part of a subscription-based Pay TV service.
MVPDs are defined in the Telecommunications act of 1996 as “a cable operator, a multichannel multipoint distribution service, a direct broadcast satellite service, or a television receive-only satellite program distributor, who makes available for purchase, by subscribers or customers, multiple channels of video programming”.
The largest MVPDs today include traditional cable companies like Comcast, Charter, and Cox Enterprises, telecommunications companies like Verizon and AT&T, and dedicated satellite television broadcasters like Dish Network.
How Do MVPDs Work?
MVPDs Own and Leverage Traditional Media Distribution Channels
Multichannel Video Programming Distributors distribute video programming to their customers primarily via two traditional media channels: cable and satellite. To make this possible, MVPDs invest heavily in developing and upgrading broadcasting infrastructure to improve their services and gain access to new markets.
MVPD cable television services are available only in states or regions where the provider has invested in residential cable infrastructure. Satellite providers like DirecTV and Dish Network deliver MVPD services across North America by launching communications satellites and positioning them in geostationary orbit above the United States.
MVPDs Deliver Content in a Linear Format
MVPDs deliver content in a linear TV format, according to a schedule of television programming and advertisements determined by the broadcaster. Rather than choose their own programming on-demand, as with many types of Over-The-Top (OTT) video distribution, audiences must tune in at a specific time to view desired content, including both live TV events and pre-recorded programming.
MVPDs License Content from Content Owners
MVPD service providers keep their subscribers happy by distributing high-quality content that audiences want to see. MVPDs acquire content for their channels by entering into licensing agreements with content owners. In these agreements, MVPDs pay licensing fees to content owners in exchange for the rights to broadcast the specified video content to their subscribers.
MVPDs Charge Customers a Monthly Subscription
MVPDs earn money by charging their customers a monthly subscription to a pre-packaged bundle of TV channels. MVPD subscriptions can cost as little as $20/month (e.g. Xfinity’s Basic plan, which includes just 10 broadcast channels), or as much as $209/month (e.g. DirecTV’s Premier plan, which includes 340+ channels, plus premium channels like Showtime, access to the HBO Max SVOD service, and other extras).
MVPDs are Investing in OTT Distribution Capabilities
As the cord cutting trend continues and audience preferences shift toward OTT services, millions of Americans are cutting the cord on MVPD services each year and switching to SVOD services like Netflix and Amazon Prime Video, AVOD services, or free ad-supported streaming TV (FAST).
The largest MVPDs are building or acquiring their own video streaming services and experimenting with new business models to make up for the revenue they’re losing from cord cutting. These include SVOD/AVOD services like Hulu (started as a joint venture between Fox and Comcast, now majority owned by Disney), vMVPD services like Sling TV (owned by Dish Network), and FAST services like Tubi TV (owned by Fox).
At the same time, MVPDs are finding new ways to stay competitive in the age of streaming, including broadcast automation and a renewed focus on customer retention.
MVPD vs. vMVPD – What’s the Difference?
Just like traditional MVPDs, a virtual MVPD (vMVPD) is a media distribution service that delivers multichannel television programming in a linear format using a subscription-based revenue model.
But, unlike traditional MVPDs that depend on satellite and cable infrastructure to deliver services, vMVPDs are OTT video streaming services that deliver content over the Internet.
vMVPDs provide a linear viewing experience that is similar to traditional Pay TV, but with all the benefits associated with OTT video streaming: lower service delivery and subscription costs, more flexibility for consumers, and easier access to view content on a variety of connected devices. Examples of popular vMVPDs today include Sling TV, PlayStation Vue, FuboTV, and YouTube TV.
4 MVPD Examples You Should Know
Owned and operated by Comcast, Xfinity is the largest Multichannel Video Programming Distributor in the United States with a total of 17.66 million subscribers in Q1 2022. Xfinity distributes video programming over Comcast cable infrastructure and offers services in 40 U.S. states.
Xfinity cable packages vary in price by region, ranging from $20/month for basic broadcast channels to $89.99/month for Digital Premier service.
Owned and operated by Charter, Spectrum is the second-largest MVPD in the U.S. with a reported 15.72 million subscribers as of Q1 2022. Spectrum is a cable-based distributor, leveraging over 800,000 miles of network infrastructure to deliver MVPD services to subscribers in 41 states.
Spectrum’s best-priced plan is the TV Select plan, which includes 125+ channels at $49.99/month. Subscribers may also choose the $67.99/month subscription, which includes premium live sports and entertainment networks.
Owned by AT&T, DirecTV is the largest satellite MVPD in the United States with 14.3 million subscribers as of Q1 2022. While cable TV operators like Charter and Comcast depend on residential cable infrastructure to deliver service, DirecTV is distributed to all 50 states by a group of eleven communication satellites fitted with high-power transponders and in stationary orbit over the US.
DirecTV’s most affordable subscription is the Entertainment Starter Package, which includes 165+ channels starting at $64.99/month. For a more premium experience, audiences can subscribe to DirecTV Ultimate, which includes 240+ channels for $89.99/month, or to DirecTV Premier, which includes 340+ channels for $139.99/month.
Dish, operated by Dish Network, is the second-largest satellite MVPD in the United States with just under 8 million subscribers at the end of Q1 2022. Just like DirecTV, Dish relies on a fleet of 10-12 satellites to distribute content to its subscribers.
Monthly subscription costs for Dish range from $69.99/month for 190 channels, including favorites like the Disney Channel and ESPN, to $104.99/month for 290+ channels and access to Premium channels like Smithsonian, Bloomberg, Nicktoons, and 17 dedicated movie channels.
Manage MVPD Content Distribution with Revedia Linear
Content owners licensing their assets to MVPDs face a variety of challenges, especially when it comes to validating distribution partner performance, managing complex royalty calculations, and ensuring accurate payments in compliance with licensing agreements. Over the years, these content owners have developed new strategies to maximize linear revenue, but without the right tools, they cannot determine the success of each effort.
With Revedia Linear, content owners licensing to MVPDs can securely manage agreements and approvals, execute automated royalty calculations, and track distributor compliance and revenue performance.