The business of over-the-top streaming of pay-TV services is about to get pretty crowded and a bit confusing.
On one side, you’ve got big telecommunications companies like AT&T and Dish Network marketing their respective virtual MVPD (v-MVPD) services, DirecTV Now and Sling TV, as if they were insurgent products. These “disrupters” are using slogans like “The Future of TV is Now” and “Take Back TV,” urging cable customers to cut their cords.
On the other side, you’ve got Silicon Valley companies like Hulu and Google, which spent the last decade offering alternatives to the big pay-TV bundle, getting ready to package a bunch of channels and charge a monthly subscription for them.
Ah, the disaggregaters have become the bundlers! Hulu is prepping to launch its live-streamed service in the next couple of months. And Google is also in the process of signing content deals for its v-MPVD service, YouTube Unplugged.
Yes indeed, the v-MVPD market—which started with the humble launch of the $20-a-month Sling TV in February 2015—is about to get crowded, with lesser-known names, including start-up Vidgo, also joining the fray.
So which of the major v-MVPD services is the best?
A comprehensive Pepsi Challenge is a little hard to pull off right now, with Hulu's live TV service and YouTube Unplugged yet to hit the market. But with Sling TV and Sony’s PlayStation Vue approaching their second birthdays, and DirecTV Now in the market for more than a month, we can do a little comparing based on what’s available.
Putting on our white lab coats, goggles and grabbing our clipboards, we headed to FierceCable Labs in Glendale, Calif. to conduct a side-by-side comparison of DirecTV Now, Sling TV and PlayStation Vue.
Overall, we found these services have plenty of things in common. But we did find room to ponder differences based on the five “Ps”: Price, programming, personalization, performance and perks.
Marketers of v-MVPD services walk a fine existential line. They need to license top channels from leading conglomerates to entice customers. But they need to keep the price point below the threshold at which consumers are better off with traditional, more reliable pay-TV service.
Among the three currently available virtual services, Sling TV offers the lowest price and most flexibility. Subscribers can get single-viewing access to top cable channels including ESPN, TNT, TBS, AMC, CNN and History for $20 month when they sign up for the platform’s base “Orange” platform. Package that with Netflix and an over-the-air antenna, which Dish just started doing with its new AirTV player, and you’ve got a pretty good meal for a combined monthly subscription price of under $30.
Channels on Sling TV can be added through add-on packages that cost $5-$10 a month. And multi-viewer simultaneous access, as well as the availability of broadcast networks FOX and NBC, can be gained by upgrading to the $25-a-month “Blue” platform.
But Sling’s pricing model, viewable on this company page, can be confusing. If you're a Blue subscriber, for instance, and you also want ABC, you have to pay an additional $5 a month for the “Broadcast Extra” add-on. And the Blue platform doesn’t have ESPN.
Perhaps Sling’s best, most straight-forward offering is a $40-a-month bundle that combines both Orange and Blue platforms and delivers every channel the service has licensed in any respective market.
For their part, DirecTV Now and Vue structure their bundles in a way that’s a little more familiar to the traditional pay-TV ecosystem—shoppers won’t get confused by multiple platforms or add-on modules. Both services simply offer four programming tiers, ranging in girth.
DirecTV Now’s price proposition starts out at with its $35-a-month “Live a Little” base tier that offers access—depending on the market—to FOX, NBC and ABC, as well as top cable networks like ESPN, TNT, TBS, AMC and CNN. Subscribers can add regional sports networks and lesser cable channels by upgrading to the second-level “Just Right” tier, which is priced at $50 a month and includes more than 80 channels. DirecTV Now tops out at $70 a month for the 120-plus-channel “Gotta Have It” tier.
For that same $70 a month, you can get 12 months of the far more reliable traditional DirecTV satellite service featuring more than 220 channels and a fancy Genie DVR.
With its parent company engaged to Time Warner Inc., DirecTV Now does have one price proposition you can’t get anywhere else: Access to HBO at just $5 a month. Cheap.
Similarly, Sony offers the basics with its $39.99 “Access” package, which includes just over 45 channels, and tops out with the $74.99 “Elite” tier, which features more than 90 networks. Again, for $5 a month less, you can get 12 months of a Comcast double-play featuring more than 140 channels on the X1 video platform and 25 Mbps video service.
Winner: Sling TV
For around $35 - $40 a month, DirecTV Now, Sling TV and PlayStation Vue deliver essentially the same offering—some access to major broadcast networks and top cable networks.
The key differentiating factor seems to be access to local broadcast channels. And of the three, Vue seems to be the clear winner.
For one, Vue has locked up CBS, a network not found on either Sling or DirecTV Now. According to CBS Corp., Vue has signed affiliate deals that currently deliver live feeds of local stations to subscribers in half its national footprint. And it will have 75% coverage by the end of 2017. In fact, Vue just signed up 20 network affiliates last week, marking the first time one of the major v-MVPD services has gone beyond network owned-and-operated stations.
By contrast, DirecTV Now and Sling can only deliver live feeds of ABC, FOX and NBC in the limited number of markets in which those networks have owned-and-operated stations. Every other region only has access to on-demand programming from those networks.
Meanwhile, through its emerging portfolio of content engines, DirecTV is promising original content for its live-streaming platform. Early offerings include female-targeted exclusives from Reese Witherspoon’s new Hello Sunshine production shingle, as well as Taylor Swift music specials.
Winners: DirecTV Now & PlayStation Vue
I like candlelit dinners and long walks on the beach. My turnoffs are sad animals and negative people. I want my TV user interface to know these things about me. And ask me how my day went.
Indeed, to hear some folks in the TV industry talk right now, you’d think they were programming dating apps and not the UX for TV viewing. The big buzz coming out of the Hulu camp, for example, is that its new service will focus a lot on personalization—the Netflix-like knowledge of what a specific viewer likes to watch, so that the interface can surface the most relevant shows to the home page.
Of the three currently available v-MVPD services, DirecTV Now has talked most about personalization, with AT&T Entertainment Group CTO Enrique Rodriguez using the platform’s launch event in November to describe how the app learns more about the customer each time they use the service, and delivers them increasingly relevant content over time.
In FierceCable’s testing, we noticed Sling TV only surfaced stuff we’d previously been watching. DirecTV Now, meanwhile, seems to know enough about us to surface ESPN and the NFL Network to the home page. Why it’s still surfacing Fox News? We have no idea.
Anyway, for true personalization, we prefer copious access to on-demand programming and a cloud DVR. And Vue has had both since it launched. Sling TV is catching on and is beta testing a cloud DVR with its Roku-using customers. DirecTV Now has simply stated that it’ll do a cloud DVR in the future.
Winner: DirecTV Now & PlayStation Vue.
Sling TV CEO Roger Lynch has said on numerous occasions that the open internet is not the ideal platform to deliver a live streaming service. OK, fine. But from Snapchat to Facebook, plenty of Silicon Valley companies pull this task off with far less drama.
Like the service itself, Sling TV’s service reliability has slowly evolved and improved. Two years ago, the service infamously melted down during a March Madness basketball semifinal between Wisconsin and Kentucky, the platform unable to handle the volume of livestreaming. This was followed up by another rash of Twitter-fueled complaints from customers just a few weeks later, when they turned out en masse for the season premiere of HBO’s "Game of Thrones."
Until recently, the pointy-headed minions of FierceCable Labs noticed Sling woring fairly reliably on Roku, iOS and Apple laptop computers featuring Yosemite operating systems. However, it buffered and crashed to the point of unwatchability on Xbox One.
Happily, that situation improved markably in time for college football’s bowl season … and for our lab workers to discover the bingeing wonders of the HBO series "Westworld."
Simultaneously, reports about DirecTV Now’s tech issues have begun to go viral. In fact, there are currently more than 200 active complaints about the service on AT&T’s website.
“You can’t come out to the market and make a such a big declaration about how the service is going to be, use words like quality, talk about how it’s a game changer, and how it’s going to revolutionize video,” Frost & Sullivan principal analyst Dan Rayburn told FierceOnlineVideo this week when asked about DirecTV Now’s streaming issues. “If you came to market and said this is beta, you can set expectations properly.”
Speaking at CES two weeks ago, AT&T's Rodriguez said the service actually doesn’t have as many bugs as he expected at this point of its evolution—which makes you wonder how low he set the bar.
Meanwhile, for its part, Vue has suffered little in the way of bad press for tech issues. Then again, while Sony has never released subscriber numbers for the service, Bloomberg reported that the service reached the 100,000 mark last June.
With analysts pegging Sling TV’s base at around 1 million at this point, size matters. Rayburn is also critical about at what they said is Sling’s unorthodox approach to video streaming. But the fact that the service is livestreaming to a much bigger audience than either of the two v-MVPD incumbents, and seemingly getting fewer and fewer complaints in the process, suggests that it may be ironing out its tech issues after two years.
Winner: Sling TV
All three currently available v-MVPD services offer free seven-day trials—a lightyear advancement of the consumer experience, given that with traditional services, you locked yourself into a two-year contract, had holes drilled into your walls and dishes mounted on your roof before you could sample the merchandise.
V-MVPD services are also offering free streaming devices to get you to sign up. Sling TV, for example, is giving away a Roku Streaming Stick ($50 MSRP) gratis if you commit to one month of the livestreaming service.
AT&T, meanwhile, is giving away a free current generation Apple TV ($150 value) when users commit to three months of service.
Winner: DirecTV Now