MVPDs and Their Evolution in the Modern TV Landscape

What is an MVPD?

A Multichannel Video Programming Distributor (MVPD) provides a range of broadcast TV channels via cable, fibre, or satellite. These services are typically subscription-based but may also include video-on-demand options. Examples of MVPDs include Xfinity, DISH Network, DirecTV, Spectrum, and Time Warner Cable.

MVPD vs. vMVPD

A virtual Multichannel Video Programming Distributor (vMVPD) delivers streaming and linear broadcast content in a digital format. Unlike traditional MVPDs, vMVPDs offer "skinny bundles"—smaller, more affordable packages of 30 to 100 channels. These services appeal to younger generations for their flexibility, lower costs, and lack of long-term contracts. Notable vMVPDs include Sling TV and DirecTV Now.

How MVPDs Operate

MVPDs deliver TV programming to homes and businesses using infrastructure such as satellites, fibre, or coaxial cables. Subscribers typically sign one- or two-year contracts, and programming is accessed via a receiver box connected to the TV.

The Shift to Cord-Cutting and OTTs Over the past decade, many consumers have "cut the cord" with traditional MVPDs, opting instead for vMVPDs and Over-The-Top (OTT) providers. From 2014 to 2021, the number of U.S. households without MVPD services tripled from 15.6 million to 50.4 million, leaving only 65.8% of households subscribing to any MVPD or vMVPD service.

What is OTT?

OTT refers to streaming services that provide media via the internet, bypassing traditional distribution channels. In 2020, global OTT subscriptions surpassed one billion, increasing by 14% to 1.3 billion in 2021. OTTs offer non-linear, on-demand content that can be accessed on various devices, including smartphones, computers, smart TVs, and streaming sticks. Popular OTT providers include Netflix, Amazon Prime Video, Apple TV+, Hulu, Disney+, and HBO Max.

VOD vs. VPD

It’s essential to distinguish between Video Programming Distributors (VPDs) and Video On Demand (VOD). VPDs provide video services, while VOD refers to the service model. Both MVPDs and vMVPDs can offer VOD features, available online or within their viewing systems. VOD includes multiple models:

• AVOD (Advertising Video on Demand): Free for users but supported by ads.

• BVOD (Broadcaster Video on Demand): On-demand content from traditional broadcasters, also ad-supported.

• SVOD (Subscription-Based Video on Demand): Monthly fee for unlimited access to a content library.

• TVOD (Transactional Video on Demand): Pay-per-view model for individual content pieces.

The Relevance of MVPDs and vMVPDs

Despite the rise of OTT subscriptions, MVPDs and vMVPDs remain relevant due to:

1. Live and Exclusive Programming: MVPDs dominate live programming for events like the Super Bowl, World Cup, and award shows, alongside unique programming like special interviews and exclusives.

2. Adaptation to Digital Trends: Innovations like DISH Network's Sling TV and other skinny bundles show that MVPDs are evolving to meet changing consumer preferences.

3. Multiple Subscriptions: Many consumers now subscribe to multiple VOD services to customize their viewing experience. A Comcast study revealed that vMVPD subscribers stream 128 hours of content monthly, half of which is OTT content outside their vMVPD subscriptions.

Key Takeaways

• The number of traditional MVPD subscriptions has declined since the mid-2010s, while OTT and vMVPD subscriptions have surged.

• vMVPDs are still growing and adapting, despite challenges like rising programming costs.

• VOD offers diverse opportunities for MVPDs, vMVPDs, and OTT providers to complement traditional linear TV.

• Live and exclusive TV programming continues to draw large audiences and significant revenue for MVPDs and vMVPDs.