MTV debuts streaming service in the UK

“We’re very close to our audience and we check in with their media habits,” said Dan Fahy, vp, commercial and content distribution. “The core demographic, 16 to 34-year-olds, are ready for this distribution opportunity. We’re comfortable that MTV has a unique content proposition in the market, there aren’t others that fit in the mold of MTV, it doesn’t feel it’s part of a crowded segment or genre, there feels a fair bit of space.”

MTV is already distributed on pay-TV operators Sky, Virgin Media and BT Sport in the U.K. Fahy said viewership on linear is still strong. According to MTV, it secured five of the top 25 most watched shows for the 16-to 34-year-old demographic last year on Sky.

Younger audience members is an important segment for the company, given the likelihood for this group to cut the cord over the coming years and the decline in its linear viewing habits, said Richard Broughton, research director at Ampere Analysis, adding that often uptake on thematic direct-to-consumer services is muted.

“You really need a large volume of high-value premium content to drive mass-market success in the subscription OTT space,” he said. “It potentially has its niche — and we’ve seen players in a similar space like Hayu perform well — but it is limited to a small subset of the U.K. population.”

MTV plans to scale some distribution challenges by partnering with mobile phone companies so MTV Play is already pre-installed. Partnering with providers like telcos who do not want to invest heavily in content and can act as an aggregator will be key.

Even with telco distribution, MTV Play will face challenges. Vivendi shuttered Studio+, a mobile SVOD service targeted younger people, two years after launch, after investing more than £26.2 million ($35 million), according to reports, but struggled to make up the costs through a subscription price point of £4.36 ($5.71). Verizon folded its mobile video service Go90 after spending roughly $1.2 billion on it.

“The OTT landscape is becoming too fragmented,” said Paolo Pescatore, independent technology, media and telecoms analyst. “Users are spoilt for choice but don’t want to sign up to numerous services, download different apps and still end up spending a small fortune. Then to struggle to find what to watch by accessing one app at a time.”