Vidgo CEO talks true prepaid TV and the future of the vMVPD market

Vidgo
Vidgo is planning for a full launch in December. (Vidgo)
Shane Cannon
Shane Cannon (Vidgo)

Vidgo CEO Shane Cannon is shepherding his company’s newly launched virtual MVPD into a crowded market with big players like AT&T, Dish and Google. But he seems confident his service can run with the big dogs.

Vidgo recently launched in beta and is currently working on improving the user interface, user experience and sign-up process. Cannon said the company anticipates fully launching in December.

He said that right now the focus is on getting the product and demos in front of customers, and then in phase two the company will begin selling devices including Amazon Fire TV, Roku and Apple TV to end users. From a technical standpoint, the focus is on perfecting live linear streaming, and after that the company will work on adding video on-demand and DVR functionality within 60 days.

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Vidgo launched with Latino programming, and it has plans to add an English-language lineup shortly. He said the programming rights for the Latino channel package were a little easier and quicker to get. That package includes all 12 Univision channels, beIN Sports and TV Azteca. He said the English-language channel lineup for Vidgo is just being finalized and that a few networks are considering investing in and becoming part of the lineup at Vidgo. He said that could lead to Vidgo having some additional content it wasn’t originally planning on having.

Besides its dedication to providing extensive programming for Latino communities, Vidgo’s defining market characteristic is its payment model. Vidgo has prepaid distribution channels and will allow customers to pay cash for its service. The company has wireless prepaid stores around the country that are going to be distributing its products. Cannon said his company is just duplicating a successful model that’s been done before with prepaid wireless.

“We’re the only ones doing it, and I can tell you we have at least a year head start. It takes that long to integrate into these platforms, and we’ve spent two and half years building this distribution model,” Cannon said.

As Vidgo builds toward its full launch, FierceVideo spoke briefly with Cannon about what's changed since the service was originally announced in 2016, and what’s ahead for the virtual MVPD market.

FierceVideo: Vidgo had a very similar strategy to DirecTV Now and Sling TV when it first announced its service in 2016. Why did the company decide to change its plans?

Shane Cannon: The real answer is that we didn’t have the content rights back then and we thought we did. That’s what the delay was. So, the number one change was just actually securing content rights. It’s also due to the two-year shift. When we were ready to go to market in 2016, there was really only Sling TV and PlayStation Vue. We were comfortable at the time with our strategy to go mass market, and now that there’s six competitors in the market it made sense to shift our focus to the underserved market rather than go general market. So, when we spend all of our money in marketing, we’re not fighting the 800-pound gorillas. We’re laser-focused on the Latino and underserved community, and frankly, that’s why we got the content rights. It’s because they feel comfortable we’re incremental. We’re bringing customers they don’t have. I like to say we play in a different sandbox. We’re focused on these cash-pay customer that no one else is.

FierceVideo: How do you personally view the vMVPD market right now? It’s showing some signs of slowing down. Do you think the existing services are veering a little bit too close in business model and strategy to legacy cable and satellite?

Cannon: I’m a big believer in the skinny bundle concept where you pick certain networks. I think to be at the price point where it’s affordable for the consumer, you cannot carry everyone, and that’s the strategy we’ve gone to market with. So, we’re going to anchor around three or four key networks and we’re not going to have every network out there like the traditional cable bundle. That will allow us to be at a very competitive price point that matters to cord cutters.

Coming from the satellite world, I found my customer base shrinking, and I saw this trend start almost four or five years ago. It’s massively ramped up faster than I expected. I would tend to disagree that cord cutting is slowing down. I think just about everyone is kicking tires and has multiple services. Obviously, everyone’s using Netflix and a handful use Hulu, Amazon Prime and other platforms. My argument would be that it’s only getting started, and I feel very confident the market’s going to be 100% streaming in four to five years. I heard [Philo CEO Andrew McCollum] speak last week, and he echoed those comments that he doesn’t see any slowdown and he wasn’t sure where those numbers are coming from.

I could see DirecTV Now and Sling TV slowing down. They had some very aggressive hardware promotions and now that those are gone, that would be my assumption for why we’re seeing the decline in numbers. But every sign I see, we’re getting a great response and I can tell you that just for Latino and soccer content, there’s a huge appetite for it.