Vidgo Offering Prepaid Streaming Video Plans With Sports, Local News
In an increasingly crowded media segment that continues to steal share from traditional pay TV, skinny bundle newcomer Vidgo hopes to carve out a niche through its business model, content focus and social TV feature, President Shane Cannon told a Parks Associates future of video conference Wednesday. More than 120 million consumers have subscribed to skinny bundles, and Cannon said he expects that number to “pick up steam” over the rest of 2021, as live TV streaming becomes “the preferred way to watch” among younger viewers who want to pick their own content.
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Vidgo’s pitch to gain eye share focuses on sports, led by a partnership with NFL Network, several ESPN channels and Fox Sports channels. Cannon called Vidgo “the most comprehensive sports package in a basic lineup without extra fees required.” He acknowledged some “seasonal churn” after the NFL football season ended.
Vidgo launched first with a Spanish-language offering, 30 channels for $25, and added an English-language package in December with over 95 channels for $55. The service doesn’t have add-on packages, for “simplicity”; it has local ABC and Fox station coverage, including news, for all 210 U.S. TV markets, and it plans to add VOD in the next two months, said Cannon.
The service did away with a free trial to reduce churn, instead pricing the first month at $10 as a lure, with successful results, Cannon said. The service is modeled on prepaid wireless plans, targeting “unbanked” customers who pay in cash and don’t have credit or debit cards -- some 55 million U.S. consumers. Customers can go to 35,000 points of sale -- locations where they can also refill a phone account -- to re-up their Vidgo account each month. Cannon pegged the total addressable market as over 70 million.
Watch parties, another differentiator that helps drive engagement, include a chat area where subscribers can communicate with sports celebrities, said Cannon. Customers “feel like they’re part of something” and can ask questions they can’t ask in other forums, he said. An NFL player could potentially reach “hundreds of millions” fans through a watch party, though Cannon acknowledged the feature is still undergoing “fine tuning,” following complaints that chat can be “loud and distracting.” By rotating a mobile device, users can hide the watch party chats, he said, but added: “I think social TV is here to stay.” Polls and memes are also part of social TV.
A top challenge for Vidgo, and all streaming services, is “how to get Gen Z to pay for content,” said Cannon. Ad-based VOD is widening the gap, giving the segment a way to get content without paying. Vidgo believes the best way to lure Gen Z is through live sports and news, the kind of content that isn't on AVOD platforms.
Vidgo’s “multicultural” customer base, which skews to African American and Hispanic users, has 32,000 unique logins every day on either a mobile or home-based over-the-top device, said the Vidgo co-founder. The service has more than 1.5 million unique logins per month, with subscribers watching more than two hours of programming per day. Average ad revenue per month per user is over 150 minutes, he said.
Commenting on the popularity of sports recaps, a trend from the pandemic when live sports weren't available, Cannon said people’s love for live sports isn’t going away. He cited the popularity of the Michael Jordan documentary The Last Dance when people were “hungry for sports content” last year. Also, betting via sports channels and fuboTV “make a lot of sense,” said Cannon, noting sports betting is best served on multiple devices. He predicted more of it and said Vidgo will experiment with its own channel.
Vidgo’s overall goal is to be watchable “on any device, anywhere, and be device agnostic.” Streaming services “are not going to make money on subscriptions,” said Cannon, saying Vidgo is using dynamic ad insertion company FreeWheel to help monetize ads “and build a foundation to drive revenues.” FubuTV’s $29 million ad revenue last year is a “telling sign of how much can be made in this space when you have half a million subscribers,” he said. Vidgo is averaging $10-$15 per thousand impressions via dynamic ad insertion on about 30% of channels, but “higher on connected TVs.”