DENVER—On day two of the Pay TV Show, a panel of representatives from virtual MVPDs gathered to discuss the future of the TV service and channel bundles.
Andrew McCollum, CEO of Philo, said that the cord-cutting trend is about moving away from buying service bundles, and he likened it to how consumers don’t buy music subscription services from their ISP.
That is part of what is driving the shift toward less-expensive virtual MVPDs like Sling TV and Philo, but McCollum said that the greatest barrier to streaming TV is that it’s still pretty complicated. Consumers need to buy internet service, set up their Wi-Fi, determine what device they need and determine what services they need to get the content you want. It’s still very different from how traditional pay TV services come into the home, set up everything for consumers and the TV just started playing content.
“That experience of instant-on is underrated,” McCollum said.
He added that 5G could eventually simplify the set-up process and give people devices that allow them to get up and going with TV faster and more easily
Dwayne Benefield, vice president and general manager of PlayStation Vue, said 5G competition will bring down prices and give consumers more choice and that in turn could accelerate adoption of vMVPDs.
Philo said that more than half of its subscribers have no TV service at all, so the company feels like it’s growing the market instead of share shifting. But Philo doesn’t offer broadcast channels or live sports, which are staples for many MVPDs and vMVPDs. In many cases, even the sports- and broadcast-heavy vMVPDs are still less expensive than traditional pay TV.
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Benefield said that PlayStation Vue is still focusing on sports and broadcasting, but he stressed that having choice and flexibility is key, and that’s why PlayStation Vue lets consumers buy channels a la carte.
Seth Van Sickel, vice president of operations at Sling TV, said his company always wants to have the most important sports up front for consumers but also include options for consumers who want even more. He said putting all live sports in one of Sling TV’s base packages would increase rates dramatically.
When asked about original content as a means to make channel packages more appealing, the distributors on the panel seemed to agree that it’s best left to the programmers. Benefield said his service has experimented with exclusive channels but found it’s more important to focus on must-have channels and device compatibility.
McCollum said his company has avoided getting into the business of original content because it would put Philo in competition with its programmers and could eventually lead to the service showing preference for its own content like Netflix has done.
Van Sickel made the point that original content is much more than just production costs. It can be really expensive to market.
That’s not to say that other service providers aren’t getting into original content. AT&T offers originals through its Audience Network, and the company also owns Warner Media. Comcast likewise has a big original content business in NBCUniversal, and even Charter has begun to produce its own original series, including a reboot of “Mad About You.”