MVPD and VMVPD: what’s the difference and why it matters for advertisers

Television is no longer what we thought of when we heard the word. It’s increasingly moving away from cable boxes and satellite dishes, and traditional setups are being replaced by internet streaming. With that comes more flexibility but also new challenges for advertisers. If you’re choosing a service to watch or planning your next advertising campaign, knowing the difference between MVPD (Multichannel Video Programming Distributors) and VMVPD (Virtual Multichannel Video Programming Distributors) can be a deciding factor.

Understanding MVPD: the traditional (old) model

Multichannel Video Programming Distributors, or MVPDs, have been around for a long time. These traditional services offer packages that include multiple TV channels through a single service provider, delivered via cable, satellite or fibre. Typically, these packages include a mix of live, sports, news, and entertainment channels, but personalisation is limited.

However, the cost of traditional cable MVPDs has gone up over time and consumers are frustrated. Many feel forced to pay for bigger packages, even if they only want to watch certain channels. This has created a growing demand for more flexible and cost-effective viewing options. Between 2016 and 2024, the number of subscribers to traditional multichannel video providers dropped sharply, falling from 99.2 million to an estimated 55.3 million.

In response to this demand, MVPDs have started to incorporate digital and on-demand TV offerings, but they still face stiff competition from newer, more adaptable services. Understanding the traditional linear TV model is essential to understanding how the industry has evolved and why alternative models have gained popularity.

What is a VMVPD?

Now that we know what an MVPD is, let’s learn what a VMVPD is.

Virtual Multichannel Video Programming Distributors (VMVPDs) represent the modern evolution of TV content delivery. These digital platforms offer live and on-demand TV via the internet, through apps on various devices.

Unlike traditional MVPDs, VMVPDs stream content, offering viewers the ability to watch live TV and on-demand video from a wide selection of programming options. Some well-known examples are YouTube TV, Hulu + Live TV, Sling TV or fuboTV. VMVPDs are all about affordability and flexibility. As of late 2023, YouTube TV holds the largest share of the global vMVPD market at 44%, with around 7.9 million subscribers.

With monthly subscriptions and content available on multiple devices, VMVPDs are a great option for budget-conscious viewers. This flexibility has made them very popular with younger viewers who value convenience and personalisation.

Are VMVPDs the same as streaming platforms?

You may wonder if VMVPDs are just like Netflix or other streaming platforms. They’re not. While both deliver content over the internet, VMVPDs are more like a traditional cable or satellite service but without the cable box. They offer live TV channels in a bundle, often including sports, news, and entertainment channels.

Netflix, Disney+, and similar platforms are all covered by SVOD (Subscription Video on Demand), a type of OTT (Over-the-Top) service that provides a library of on-demand content for a flat monthly fee. These services don’t offer live TV but focus on curated shows and movies that you can watch at any time.

The key difference? VMVPDs stream live TV just like a cable provider, while SVOD platforms focus on on-demand content without live channels.

MVPD and VMVPD: key differences

Distribution method

MVPDs deliver television content through traditional infrastructure such as:

• Cable (e.g., Comcast, Spectrum)
• Satellite (e.g., DIRECTV, Dish Network)
• Fibre-optic networks (e.g., Verizon Fios, AT&T U-verse)

These services require physical infrastructure and often include bundled packages with set-top boxes, long-term contracts, and additional fees.

VMVPDs, on the other hand, provide live TV services via internet streaming without relying on physical distribution networks. Examples include:

• YouTube TV
• Hulu + Live TV
• Sling TV
• FuboTV

vMVPDs operate on an app-based model, allowing users to access content on various devices (smart TVs, tablets, smartphones, gaming consoles) without the need for traditional hardware or installations.

Subscription flexibility

MVPDs typically require long-term contracts, often a year or longer, with penalties for early cancellation. Their subscription models are bundled, meaning customers typically have to pay for internet, phone, or additional TV channels as part of the package. Customisation options are limited, and pricing is rigid, making it difficult for users to adjust their plans to changing needs.

vMVPDs offer much greater flexibility with monthly subscriptions that can be cancelled at any time without penalties. They offer more customisable packages, so users can add or remove channels as needed, rather than being limited to large, pre-set packages. Because they are app-based and streaming-based, there are no hardware rental fees, and switching between services is much easier.

Content availability

MVPDs offer a wide range of content, including live TV, local broadcast channels, premium networks and on-demand programming. Since they have long-term agreements with major networks and regional broadcasters, they usually have full channel lineups with sports, news and specialty content.

However, access to these channels is often geographically restricted, and some networks or local affiliates may not be available in every region. MVPDs may also have broadcast blackouts for specific sporting events based on licensing agreements.

vMVPDs offer similar live TV and on-demand content but through internet streaming instead of traditional cable or satellite. They have many of the same networks as MVPDs but their channel lineups can vary greatly depending on licensing agreements and regional availability.

Some vMVPDs may not carry all local broadcast channels or certain regional sports networks but they often make up for those gaps with cloud DVR, multi-device streaming and integration with other streaming services.

Unlike traditional MVPDs, vMVPDs may have more frequent changes to their content offerings because their licensing agreements are more fluid.

Advertising models

Another difference is how the ads work. MVPDs are based on traditional ad placements where ads are shown during live programming at scheduled times. The targeting is broad, geographic and demographic.

VMVPDs use data-driven advertising. Since they are in a digital environment, advertisers can use user data to show personalised ads based on viewing history, behaviour, and interests.

Viewer engagement

MVPDs are for traditional passive viewing where audiences watch scheduled programming as it airs.

VMVPDs serve an engaged audience that expects interactivity, personalisation and cross-platform accessibility. This means brands need to approach advertising differently, VMVPD viewers will interact with ads through clickable elements, call-to-action buttons, or personalised recommendations.

What this means for advertisers

Better targeting with VMVPDs

MVPD advertising works similarly to traditional TV, offering broad demographic reach.

VMVPD ads can target more precisely, based on user behaviour and preferences. This means advertisers can show ads based on interests, previous viewing habits, and real-time engagement data.

Ad formats: static vs. dynamic

MVPD ads are displayed on a set schedule, just like traditional TV ads.

VMVPDs support interactive and addressable ads for digital audiences for more engagement and measurable impact. VMVPDs also offer Dynamic Ad Insertion (DAI) where brands can swap ads in real-time based on audience segments.

Audience demographics

MVPD viewers tend to be older and more accustomed to traditional TV habits. Many households still subscribe to MVPDs to watch live sports, news and premium channels.

VMVPDs are attracting younger, tech-savvy consumers who want flexibility and streaming. These audiences use multiple devices and consume content across platforms, so cross-platform advertising is key.

Tracking and analytics

MVPDs rely on Nielsen ratings and broad data at the household level, which can be less precise than digital metrics.

VMVPDs provide real-time analytics, allowing advertisers to track engagement, viewership and conversions with greater accuracy. Because VMVPDs operate in the digital space, they can integrate with other marketing technologies to provide deeper insights into audience behaviour.

Choosing the right model for your brand: MVPD and VMVPD

The choice between MVPD and VMVPD depends on several factors: brand goals, target audience, and budget. The typical demographic for VMVPD is millennials, who value flexibility and cost-effectiveness. MVPDs are used by advertisers to increase brand recognition through comprehensive service packages.

MVPDs tend to offer more comprehensive packages, which can lead to better overall value for brands with larger budgets. On the other hand, VMVPD users often switch providers, indicating a preference for cost-effective and flexible viewing options. Many traditional TV viewers express interest in switching to VMVPD services if the process were easier.

Viewers who use both MVPD and VMVPD are willing to try different services, which creates a competitive environment for advertisers. Brands need to carefully consider these factors when choosing the right model for their advertising campaigns.

Summary

In summary, understanding the difference between MVPD and VMVPD is key for advertisers to reach and engage their audience. MVPDs offer traditional packages with broad reach, VMVPDs offer digital, flexible, and cost-effective viewing options.

As the industry evolves, advertisers need to stay up-to-date with the latest trends and technologies. By choosing the right model and leveraging digital platforms, brands can engage their target audience and achieve their marketing goals.