Understanding the Importance of Virtual MVPDs

In this blog post, we will examine Comscore OTT Intelligence data, which provides clients with critical insight into consumer over-the-top (OTT) streaming activity on TV-connected devices, including smart TVs, streaming sticks and boxes and gaming consoles.

The Virtual MVPD Explained
First things first, MVPD stands for multichannel video programming distributor. What that means, in layman’s terms, is a service that provides multiple television channels – a.k.a. a cable or satellite television services through companies such as Comcast or Spectrum. These were often formerly known as “operators” or “MSOs.” These distributors then aggregate live and on-demand content and deliver it over the internet through a set top box.

Now a virtual MVPD is a service that provides multiple television channels through the internet without supplying its own data transport infrastructure (i.e., coaxial cable, fiber, or satellite technology). These services are also sometimes called “skinny bundles” as they often contain fewer channels than a traditional cable or satellite subscription. You may be familiar with some vMVPDs such as AT&T TV, Sling, DirecTV Now, Fubo TV, and Xumo.

Then while not to be considered “pure-play” vMVPDs, big-name providers including YouTube and Hulu that deliver programming through linear and digital means based on how they transact, technically do fall into the vMVPD category as well.

vMVPDs are Accelerating the OTT Transformation
It makes sense that the on-demand “skinny bundles” of specific television content offered through vMVPDs are in line with the self-curation approach to building stacks of services many OTT households have come to embrace. Please refer to our previous blog on Understanding the Typical OTT Home.

What’s interesting is that households streaming vMVPD services have actually become super users of OTT content. Over the past year, we’ve seen that households consuming linear TV content via a vMVPD are also embracing OTT services at levels much higher than typical OTT households in terms of number of services, engagement and cord cutting. Roughly 26% of vMVPD households are consuming OTT content, however, they are doing so at an alarming rate.

In fact, vMVPD households over a typical month stream 7 OTT services, which is 2 more than the typical 5 services streamed by the average OTT home.

Shockingly these same vMVPD households watched +52 more hours of OTT programming in a typical month than an average OTT household.

Finally, vMVPD households are more likely to not have a traditional pay-TV subscription than the average OTT household. Fifty-seven percent of vMVPD households were cordless in June 2021, which is seven percent more than the average OTT household.

The Future of vMVPDs
As the modern streaming approach to television continues to evolve, it will be interesting to see how vMVPDs fit into this larger ecosystem. They do offer many appealing elements to consumers, including Live TV, competitive price points, skinny bundles of content, and low barriers of entry (no installation required).

That’s not to say vMVPDs are bullet proof to what the future may hold. As consolidation of brands and content packages evolve, virtual MVPDs need to be careful their channel packages do not become the bloated bundles that cord-cutters decided to walk away from to begin with.

So long as these distributors can remain nimble with a keen eye on consumer behaviors, needs, and trends, vMVPDs will play a significant role in shaping the future of television.

For more information about how Comscore can help you measure the dynamic OTT space, please contact us.