Report Says Internet-Based Pay-TV Will Be in 15 Million U.S. Homes by 2020

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Streaming services like Netflix and a la carte options like HBO Now continue to drive more cable and satellite customers to consider cutting the cord — or at least shaving it. Even with that being the case, the cord-cutting phenomenon isn’t accelerating quite as fast as some might expect. There’s also a third option gaining steam: over-the-top Internet-based TV services like Sling TV and PlayStation Vue. Now a new report from financial company UBS predicts these and similar services will have some 15 million subscribing homes by 2020.

As reported by FierceCable, UBS predicts so-called V-MVPDs — short for Virtual Multichannel Video Programming Distributor — will become increasingly major players in the years to come. V-MVPDs such as Sling TV and the upcoming DirecTV Now provide a breadth of current content not available from strictly-streaming services like Netflix, and with more flexibility than traditional cable and satellite packages.

In the report, UBS analyst Doug Mitchelson says, “While YouTube and Netflix have been disrupting the TV ecosystem for a decade, we expect Internet-based pay TV services to more dramatically upend business models by offering the same content at a lower price while transforming the user experience.”

UBS surveyed 2,000 consumers and reports that 37% of the homes that were currently subscribing to some form of pay-TV would consider adding a V-MVPD service. Those numbers increase even more for Netflix subscribers and consumers who describe themselves as “likely cord-cutters.” The number jumps to 56% for the former, and 76% for the latter. That makes sense, given that a Netflix subscription doesn’t get you access to current TV shows or sports programming. Even if many Netflix subscribers are eager to rid themselves of that bulky cable bundle, there will be plenty of them who still want to be able to catch the game or the latest episode of Dancing with the Stars or what-have-you.

Crunching all their numbers and taking into account things like “demographic trends and technology adoption curves,” UBS arrives at the estimate of 15 million V-MVPD subscribers by 2020. The report adds that “Limiting factors likely to influence growth, particularly initially, include quality of video streaming, consumer awareness, and whether the V-MVPD business model will prove attractive.”

David Wharton

David Wharton

David Wharton has been a freelance writer and editor for over 12 years, contributing to publications such a The Daily Dot, CinemaBlend, GiantFreakinRobot, Cinescape, and Creative Screenwriting. He lives in Texas with three children, four dogs, and his wife. Email him at davidwharton@streamingobserver.com.
David Wharton

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