What is vMVPD?
Virtual multichannel video programming distributors (vMVPDs) are linear OTT streaming services that offer live TV programming and video content.
On the customer experience side, virtual MVPDs offer viewers a similar experience to traditional cable and satellite television: a guide layout with live channels to flip through.
Because of the familiarity and access to live content, vMVPD services are a growing first step away from cable for new and would-be cord-cutters. That’s part of why this segment is experiencing rapid growth and making a dent in the market share of traditional MVPDs like Comcast, Spectrum, and Dish Network.
As more and more consumers look to defect from cable, broadcast, and satellite TV, vMVPD services are securing a big chunk of that market. In fact, Parks Associates predicts that, by 2024, US subscribers to vMVPDs will surpass 23 million households.
vMVPD examples you should know
The most popular vMVPD service providers include:
- Roku
- Sling TV
- Hulu Live
- DirecTV Now
- YouTube TV
- fuboTV
- Pluto TV
- Apple TV
- Amazon Fire TV
- PlayStation™ Vue
- Xumo
Of these options, the most well-known example is likely Hulu which started out as SVOD until they added the option to subscribe to live TV as well as on-demand.
How does vMVPD work?
Of all the OTT and streaming services, vMVPD retains the most similarity to cable and other traditional multichannel video programming distributors (MVPDs), with the live content and a similar viewer experience.
So why are so many people making the switch?
Over the top (OTT)
vMVPD is an over-the-top (or OTT) streaming service that brings video content to viewers using the internet instead of cables or satellite. Customers can access their television channels via the provider’s website, a set-top box (like Roku, Apple TV, or Amazon Fire TV Stick), on a smartphone via the service’s iOS or Android apps, or built into a smart TV.
Live programming without cable
One of the biggest barriers for on-demand only streaming services like Netflix and—in its early days—Hulu is live TV and sports in particular. Through legacy licensing agreements, cable companies had a lock on live professional and college sports and linear channels.
And that monopoly kept many viewers tethered to bloated packages and expensive, long-term contracts with MVPDs.
With vMVPDs breaking through that barrier, they’re a great choice for viewers who want to move away from cable without missing out on live TV.
Skinny bundles reduce bloat
Part of the way traditional MVPDs justify their high prices is through massive channel lineups and packages. Thousands of channels have been the norm for cable and satellite for some time now.
vMVPDs, though they also offer channel packages, typically include what’s known as a “skinny bundle.” These bundles of live channels offer a much smaller number of channels, but still include the variety cable customers are used to.
With a skinny bundle, viewers typically get fewer than 80–100 channels, including most of the channels they actually watch. This way, they aren’t paying $100+ per month for thousands of channels they don’t watch.
vMVPD vs. MVPD
As the most direct competitor to cable and satellite, vMVPDs offer much of the same experience of an MVPD with the benefits of more modern OTT and streaming services:
- vMVPDs are more cost effective than bloated cable packages
- Guides and interfaces are designed with better technology and an improved experience versus MVPDs
Unsurprisingly, many legacy service providers have been racing to create vMVPD services so that MVPDs can compete with streaming services.
vMVPD vs. SVOD
vMVPD and subscription video on demand (SVOD) providers share a similar business model and serve as alternatives to traditional pay-TV.
But here’s the big difference:
SVODs offer on-demand content, while vMVPDs offer live channels. Netflix, Amazon Prime Video, and Disney+ are great examples of pure SVODs—users select from their library of on-demand video content including shows and movies.
vMVPDs are more similar to traditional cable TV in that they offer a selection of live channels without on-demand options. Services like Sling and Roku are examples of pure vMVPDs.
Advantages and disadvantages of vMVPD
Advantages
From a viewer perspective, the advantages of vMVPD services are clear:
- Lower costs are attractive to recent and would-be cord-cutters
- A diverse mix of channels via skinny bundles that make sense for diverse interests
- Better customer experience than traditional cable
For media and entertainment companies, there’s one big advantage: OTT the easy way.
OTT is the way forward, but tapping into it directly means building infrastructure and dealing with billing, marketing, less predictable revenue, subscriber churn, providing customer support, and complicated licensing issues.
That’s the biggest advantage of vMVPD for media and entertainment companies—it enables you to stream video content without all that hassle.
Disadvantages
On the viewer side, vMVPDs…
- Are likely to increase in price as market share over traditional cable grows
- Can make it hard to find exactly the mix of channels they want from one vMVPD provider
In exchange for tapping into a vMVPDs infrastructure, media and entertainment companies do give up some level of control over things like pricing and customer experience.
There are also questions around profitability and the best business model for vMVPDs: ads- or subscription-supported? Plus, with the space growing so rapidly, competition is set to increase in the coming years, too.
Optimizing vMVPD Revenue with Symphony Media AI
SymphonyAI Media helps content owners and vMVPD streaming service providers harness their data from a variety of sources to:
- Monitor content and distributor performance
- Accurately valuate content
- Handle complex royalty calculations
- Forecast revenue
- Manage and scale content licensing agreements more efficiently
Our Revedia platform combines data intelligence with AI-driven capabilities for revenue management, forecasting, and auditing, to help content owners and distributors prevent churn and improve KPIs, while optimizing revenue and monetization.
