Online TV Fortunes Shift as Sony Reportedly Looks to Sell PlayStation Vue

With Dish Network’s pioneering launch of Sling TV in 2015, online TV appeared to be traditional pay-TV’s antidote to subscription streaming video, Netflix and Amazon Prime Video.

But four years later and the online TV, or virtual MVPD market, has cooled. Online TV services added 430,000 combined subs in the second quarter — a 44% decline from 756,000 net subs additions in the previous-year quarter.

The market, which includes Philo, Hulu Live, YouTube TV, Spectrum TV, and Vidgo, among others, appears stuck in neutral as high-profile SVOD services from Disney, Apple, NBC Universal and WarnerMedia are poised to enter the market.

AT&T’s ambitious DirecTV Now service has thousands of subs after it did away with a $34.99 loss-leading price point. The platform is now called AT&T TV Now with about 1.5 million subs.

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Sling TV continues to lead the standalone online TV market with 2.47 million subs — up 128,000 subs from 2.34 million subs last year. But that growth has eluded Sony’s branded $49.99 PlayStation Vue service, which languishes as a fiscal underachiever with around 500,000 subs.

According to media reports, Sony has hired Bank of America Merrill Lynch to explore PS Vue sale options, with competitor Fubo TV reportedly interested. Nothing has been announced and sports-themed Fubo and Sony aren’t talking.

When Vue launched, it was the first online TV service offering cloud-based storage and on-demand features. But Sony last year began sounding warnings about Vue, saying the “market and future business model” for the platform remained rocky.

Indeed, when Vue dropped Sinclair Broadcast Group stations last year, Sinclair sent out a press release announcing that it had removed ABC, CBS, Fox and NBC affiliated stations from the platform due to “certain contractual provisions” — downplaying any material effect on its business due to Vue’s “very small subscriber base.”

“We remind Sony subscribers that there are other video distributor options available to receive our broadcast stations’ programming, including Sony’s direct competitor YouTube TV, which continues to carry stations that Sony has dropped,” Sinclair wrote in the release. “Fortunately, subscribers to PlayStation Vue can terminate their subscriptions with ease and without termination fees.”

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