There was hope within the TV industry that skinny bundles from “virtual MVPDs” such as YouTube TV, Hulu and DirecTV Now would help fight cord-cutting. And to some extent, these services have done that — but at what is proving to be a steep cost. Now, these services are raising prices and looking for other bundling and distribution options in pursuit of profitability and sustainability. What that ultimately proves, yet again, is a very simple fact: No matter how you slice, dice or bundle it, live TV is expensive.
The key hits:
- Hulu, YouTube TV and DirecTV Now have recently raised prices.
- These services are focused on profitability and sustainability, which means less of a willingness to pay higher carriage rates than the monthly subscription fees they charge customers.
- The reality is live TV is expensive and while discounts have always been a way to grab new customers, discounts don’t last — while content costs typically go up.
- That doesn’t mean virtual MVPDs are foregoing subscriber growth, they are looking at new options: Hulu, for instance, wants to give customers greater flexibility in adding and dropping its live TV service — as long as they remain subscribers to its on-demand service.
- Bundling is also another option: YouTube TV is now being offered to Verizon customers and other similar bundles are likely on the way.
- Ultimately, though, the future of virtual MVPDs will come down to whether customers want to pay for live TV — which, again, is costly.
Philo, a live TV streaming service aimed at people who want live TV but don’t want to pay for expensive sports, news and broadcast channels, is getting rid of its $16 monthly option, which gave subscribers access to 45 channels from programmers such as AMC Networks, A+E Networks, Discovery and Viacom. New subscribers will now have to pay for Philo’s $20 option, which offers access to 58 channels per month. (Philo has not publicly revealed how many overall subscribers its streaming service has. The service’s investors include those aforementioned cable programmers.)