Multiple Virtual MVPD Models Emerging, Strategy Analytics Says

Four distinct virtual MVPD business models are emerging, and the growing industry could put significant pressure on pay-TV providers' monthly subscription fees, Strategy Analytics (SA) said in a report Tuesday. The four models are defenders, typically traditional pay-TV providers offering over-the-top services that closely resemble traditional service but at low price; flankers, traditional pay-TV providers opting for skinny bundles; agitators, made up of programmers and studios that also favor fatter bundles; and disrupters, generally digital pure-plays with no ties to the legacy pay-TV business, SA said. As of January, 3.5 million to 4 million households are virtual MVPD subscribers, but that slow adoption could change with increasing numbers of offerings, SA said. Large-scale adoption of online pay-TV services "will overwhelm existing Internet infrastructure" without improvements being made, SA said. It said addressing technical challenges such as ensuring quality and consistency in the service needs to be the top priority of virtual MVPDs.