Advanced Television

Analyst: ‘Virtual’ subs largely pleased with service value

August 16, 2017

According to analyst firm The Diffusion Group (TDG), although virtual pay-TV services are immature and years away from ‘five-9’ reliability, subscribers overwhelmingly consider service value to be very solid.

In TDG’s Q2 Benchmarking the Connected Consumer project – a survey of more than 2,000 US adult broadband users – less than 5 per cent of ABUs were using a live streaming pay-TV service like Sling TV or DirecTV Now. Among these consumers, 49 per cent ranked service value as ‘very good’ and 37 per cent as ‘good.’ Only 11 per cent were neutral, and just 3 per cent ranked the services as having poor value.

“Given that virtual pay-TV services are for the most part a value play, one premised on ‘skinny’ channel bundles at lower-than-cable prices, user value perception is a critical metric,” notes Michael Greeson, President and Principal Analyst at TDG. “Early evidence suggests vMVPD [virtual multichannel video programming distributor] providers are doing well in this regard. Users seem okay without the ‘full Monty’ of legacy pay-TV channels, and to be fairly tolerant of the shortcomings that haunt live streaming video, such as buffering, pixilation, and screen freezing.”

TDG believes that, as with SVoD in 2009, early vMVPD users offer a unique prism through which to view the future of TV and video — if studied by the right firm using the right methods. Accordingly, TDG is launching multi-client research focused exclusively on vMVPD users to assess who they are, what drives their decisions and preferences, and how their behaviour may impact the future of TV.


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