Thanks to some recent data drops from Google and Disney, the scope of the virtual MVPD market in the U.S. is coming into sharper focus.
Media analyst firm MoffettNathanson estimated that there were approximately 10 million vMVPD subscribers at the end of the fourth quarter. The estimate includes about 2.59 million for Sling TV, 918,000 for AT&T TV Now (formerly DirecTV Now), 2 million for YouTube TV, 3.2 million for Hulu + Live TV, and another 1.245 million split between FuboTV, Philo and PlayStation Vue (which shut down on Jan. 30).
MoffettNathanson said Vue reportedly had 500,000 subscribers, but the firm said it doesn’t have a precise number. It’s also unclear how many of those subscribers potentially moved to other vMVPDs.
MoffettNathanson estimated that YouTube TV added 400,000 subscribers and Hulu + Live TV added 475,000 subscribers in the fourth quarter. Sling TV and AT&T TV Now lost more than 300,000 subscribers combined, while the other players added a combined 64,000.
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The good news is that despite losses at Sling TV and AT&T TV Now, the vMVPD market is growing overall. The total 9.96 million subscribers at the end of the fourth quarter was up from about 7.5 million one year ago.
The bad news is subscribers leaving traditional pay TV aren’t converting to vMVPDs like they used to. MoffettNathanson estimated the conversion rate was at just over 40% over the last 12 months.
“We have repeatedly warned in these pages in the past that the near-100% conversion rates of traditional subscriber losses to vMVPD gains that we were seeing a year ago were unsustainable,” wrote Craig Moffett in a research report.
The firm said that the biggest reason for the declining conversion rates is the decoupling of sports/news from entertainment.
“One can no longer maintain the fiction that SVOD services are not a substitute for traditional and virtual MVPD packages. Of course they are,” Moffett wrote.
MoffettNathanson said that with traditional MVPD distribution falling by 6.8% and a conversion rate of 40% for vMVPDs, video subscriber declines hit 3.8% during the fourth quarter.