TiVo: MVPDs should build skinny bundles based on interests, viewing behavior

TiVo’s data suggests the vMVPD market can further diversify to meet consumer desires.

Skinny bundles may have caught the attention of consumers who want to access a more focused set of video channels, but TiVo found in its latest Video Trends Report that vMVPDs and MVPDs are offering packages that still have too many channels.

In the second quarter, TiVo found 77.5% of respondents to its survey want to pay for only the channels they watch. The company said while this audience remains relatively flat quarter over quarter and year over year, “a significant portion of respondents remain interested in this TV option.”

Given the challenge of building skinny bundle packages, TiVo suggested that these providers should consider focusing on the specific viewing habits of their subscribers.

RELATED: TiVo, eMarketer studies point to widening age gap among pay-TV subscribers

“TiVo believes vMVPDs could leverage their data to create packages that reflect subscriber interests,” TiVo said in its study. “Instead of three or four skinny bundle packages where the main differentiation is the number of channels included, TiVo believes packages should be built based on interests or viewing behavior.”

A vMVPD could offer a 35-channel package for sports fans, a 35-channel package for travel enthusiasts, or a 35-channel package for kids, for example.

“While some channels would overlap, the overall packages would be much more tailored to the individual, returning to a true à la carte spirit,” TiVo said.

In conducting its analysis, TiVo’s Data Science Team analyzed the channels respondents selected to be in their ideal TV packages and compared those answers to the channels were included in packages offered by the top vMVPDs today.

Out of this analysis, TiVo’s Data Science Team generated what it says are seven statistically significant bundles based on the most commonly selected à la carte channels.

These bundles contain a core list of channels, which became evident after completing the clustering process. In addition to the core channels, the Data Science Team found three key trends/groups: Sports, Lifestyle/Travel and Kids.

TiVo found that there is considerable overlap in the channels offered by YouTube TV, Hulu TV, Orange and Sling. This includes popular stations such as Spike, Fox Sports 1, NFL Network, MLB Network, TCM and Investigation Discovery.

Due to the overlap, TiVo said major “vMVPD skinny bundle offerings on the market today match the preferences of only 43.6% of respondents, with content concentrated on sports and medium-to-large channel offerings.”

With half of the survey respondents having their preferences represented in a skinny bundle offering available today, TiVo’s data suggests the vMVPD market can further diversify to meet consumer desires without having to increase the size of their bundle.

What’s more, TiVo found that none of the vMVPDs offer small bundles of under 20 channels or fewer. Interest in small bundles made up the largest group of respondents at 22.9%.

“This group is ideally suited for custom microbundles and represents a variety of individual preferences,” TiVo said.

In the bundle 4 category, which represents 20.9% of respondents, viewers are primarily concerned with core channels and most-watched channels. This category offered nine main channels. However, no skinny bundle falls into this category.

Another issue is pricing, which varied between the United States and Canada. In the U.S., the average price respondents will pay for the top 20 channels is $29.97, up 5.9% quarter over quarter. The average price respondents will pay in Canada for the top 20 channels is $26.34, an increase of 3.1% quarter over quarter.