More than four in 10 U.S. broadband households (43%) are likely to switch to a virtual multichannel video programming distributor (vMVPD) from traditional pay TV in the next year, according to a new vMVPD forecast from Parks Associates.
Virtual MVPD services such as Hulu + Live TV and YouTube TV offer platform flexibility and better pricing than traditional pay TV, which has helped drive vMVPD popularity, according to the researchers. This occurred despite the scarcity of live sports and performances during the COVID-19 pandemic.
In 2020, a little under one in five traditional pay TV viewers (17%) switched to vMVPDs, reversing what had been a waning trend prior to the pandemic.
“Subscriber losses in traditional pay TV continue, while the vMVPD category continues to grow, thanks to consumer price sensitivity and preferences for platform flexibility,” said Paul Erickson, Parks Associates senior analyst, in a prepared statement. “Traditional pay-TV operators have online delivery in their roadmaps, if not already deployed. We expect vMVPDs will continue to grow dramatically and [to] gradually become the dominant offering in the pay-TV landscape.”
Erickson added: “vMVPDs have substantial opportunity if they can avoid the pitfalls that typically drive pay-TV customer dissatisfaction, such as rising prices and inflexible content and platform options. With content prices rising and competition increasing, vMVPDs should remain conscious of consumer price sensitivity while keeping a strict adherence to a consumer-centric experience.”