Pay-TV 3.0 – At the Crossroads of App Stores & MVPDs

For 16 years and counting, TDG has understood the impact of broadband innovations on media ecosystems. As early as 2008, we foresaw the disruptive potential of internet connectivity reaching the home television – the app as the future of TV. Today we are taking this future one step further, following the evolution of TV from traditional, pay-TV live linear viewing to the doorstep of “Pay-TV 3.0”

What is Pay-TV 3.0?

Advances in live-streaming technologies and cloud-based storage laid the groundwork for virtual MVPDs – i.e., IP-based Pay-TV without the need for a proprietary distribution network or operator-owned hardware. This is Pay-TV 2.0. Today, this 2.0 model of Pay-TV “as an app” has more than 11 million paying subscribers (at least 25% of whom also subscribe to a legacy MVPD).

Alongside this virtualization of Pay-TV, is the transformation of Gen-1 online app-stores from simple aggregators and shopping portals to Gen-3 active, branded, entertainment services. Who are these Gen-3 super aggregators and channel stores? They are industry giants like Amazon and Apple; smaller, independent players like Roku; TV OEMS including Samsung; and forward-thinking MVPDs such as Comcast which have unified the previously fragmented multiple video app user experience into a single, branded content streaming ecosystem.

The upcoming collision point between, and integration of, Pay-TV 2.0 and the Gen-3 super-aggregator is what we at TDG refer to as “Pay-TV 3.0.”

This report explores the rise of Pay-TV 3.0 and what it means for consumer video services and the future of TV, as well as profiles the consumers most interested in this new model. This is the first in a two-report series discussing the rise of DTC streaming channels; the second of which, the second of which, Revisiting the Future of TV & Video: 2021 – 2030, Analysis and Forecasts (now available!) includes new forecasts for major DTC services and the use of aggregators.

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