Virtual MVPDs are ‘shaping up to be a truly lousy business,’ analyst says

YouTube TV (Google)
Barclays analyst Kannan Venkateshwar predicted that the linear pay TV business will lose around 31 million users over the next decade, with only 17 million coming back via virtual services. 

The virtual MVPD industry has grown from zero to nearly 3 million subscribers in about two and a half years. But the business is proving to be a hollow replacement for traditional pay TV subscriber losses, one leading media and telecom analyst says. 

“Most of these businesses are at best break-even or money losers,” said Craig Moffett, an analyst at MoffettNathanson LLC, to Bloomberg. “This is shaping up to be a truly lousy business.”

Pulling figures from anonymous sources, the Bloomberg report to which Moffett spoke provided an interesting snapshot of the state of the nascent vMVPD market.

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Dish’s seminal Sling TV service controls nearly two-thirds of market share right now with around 1.7 million users, sources told the news service. 

Sony PlayStation Vue, which launched shortly after Sling TV in 2015, controls around 450,000. AT&T’s DirecTV Now, which launched November 30 of last year, stands at around 400,000 subscribers. 

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Recent entrants YouTube TV and Hulu Live control around 160,000 users between them. 

But so far, Moffett said, these “skinny bundles” of pay TV channels delivered over the top are bringing back only around 60% of those who leave the traditionally more profitable linear pay TV ecosystem. 

On Monday, Barclays analyst Kannan Venkateshwar predicted that the linear pay TV business will lose around 31 million users over the next decade, with only 17 million coming back via virtual services.