Welcome back to What I’m Hearing+, home in Brooklyn Heights. I’m Julia Alexander.

Next week in Manhattan, the streamers will uncrate their top executives and talent for the upfronts. After going virtual last year, Netflix promises that its 2024 event—at Pier 59 Studios on May 16—will be an immersive, all-day experience. Amazon, new to upfront week, will descend on Pier 36 on May 14, while YouTube will pack David Geffen Hall at Lincoln Center on May 15. Expect inflated engagement metrics, afterhours back-slapping and Casamigos guzzling at The Whitby and The Mark—and disappointing Netflix ad-tier numbers.

But before the G5s touch down at Teterboro, and with the ongoing NBA media rights auction dominating attention, let’s talk about everyone’s favorite topic: live sports. That means sorting through the crowded field of vMVPDs, a.k.a. the digital services where most cord-cutters now get their sports fix.

As with any nascent business, there will be winners and losers, and the centrifuge will sort it out as the category matures. Fubo, the most sports-centric of the virtual TV operators, reported strong revenue ($402 million, up 24 percent year-over-year) in its most recent quarter but also a loss of 100,000 customers, and reiterated to analysts that the upcoming Spulu bundle from Disney, Warner Bros. Discovery, and Fox is the biggest threat to the remaining pay TV ecosystem, virtual or otherwise. Meanwhile, YouTube TV, the leading vMVPD and the closest thing to an old-school cable interface on the web, surpassed 8 million customers—thanks, in part, to the addition of major sports packages like NFL Sunday Ticket.

Here are the leading clues about which services will make it, which won’t, and how we’ll all be watching sports in the future.

And that’s just the news from this week. ESPN C.E.O. Jimmy Pitaro is about to launch two direct-to-consumer plays in the next 16 months, including Spulu, the joint venture with WBD and Fox. ESPN’s recent $800 million deal for a women’s NCAA package now seems like a bargain. Meanwhile, as Ourand previously reported, RedBird and David Ellison’s interest in Paramount Global is motivated, at least in part, by CBS’s recently renewed NFL rights deal, which runs through 2033. And after the NBA rights question is settled, all the attention will likely focus on the UFC—the next major league with media rights on the block. (It was notable that UFC C.E.O. Dana White popped up at Netflix’s epic and raunchy Tom Brady roast on Sunday.) And Netflix, of course, just signed a deal with WWE.

For those who have already cut the cord, there are a plethora of vMVPDs, or virtual multichannel video programming distributors, that essentially provide the true value of a traditional MVPD (live sports, reruns, old familiar network programming) for a fraction of an Altice bill—Fubo TV, YouTube TV, Hulu + Live TV, Sling TV, etcetera. Like the more traditional pay TV outlets, vMVPDs lack the sort of in-demand original content that keeps households constantly firing up their streaming apps. But unlike traditional pay TV distributors, vMVPDs aren’t tied into larger triple-threat packages with phone service and internet that keep consumers hooked. By nature, therefore, vMVPDs have the same issue as SVODs—they are easy to cancel and thereby vulnerable to high seasonal churn rates—but lack the same deep content libraries.

Signups for vMVPD services usually peak around the start of football season. The fourth quarter—when the NBA season begins, the MLB postseason commences, and the NFL playoff push kicks into high gear—also often sees a jump in subscriptions, which cools in the first quarter after the Super Bowl.

Indeed, if live sports are the last frontier for the pay TV business, that is even more true for the oversaturated vMVPD business. Last week, a new coalition led by Fubo TV and joined by larger distributors like DirecTV and Dish Network sent a letter to Congress asking for hearings to investigate the Spulu joint venture. But the death knell was sounding for most vMVPDs long before Spulu was announced. From Netflix to Disney, the biggest streaming players are focusing on lower-priced ad tiers. (Comcast had this insight early with the creation of Peacock, an AVOD leader.) Meanwhile, YouTube TV appears to be an unstoppable player consolidating the space: It has become the fourth-largest MVPD—behind Comcast, Charter, and DirecTV—with more than 8 million subscribers, good for an estimated 40 percent of the total vMVPD market. Hulu’s offering may thrive, but it’ll also exist in a cacophony of Disney-owned sports-streaming products including ESPN+, ESPN O.T.T., and the JV bundle. Its future, similar to other vMVPDs, is up in the air.

According to analyst firm MoffettNathanson, pay TV losses do not translate into vMVPD gains. Not all customers are necessarily interested in replacing their traditional MVPD with a virtual one that’s easier to cancel, and doesn’t require you to mail back a cable box, or leave a satellite dish to rot on your roof (although that is nice). In fact, per Leichtman Research Group, for every three subscribers who cut the cord, only one new streaming subscriber is born. Meanwhile, total advertising across cable networks declined by 8 percent in Q1. (Disney, Warner Bros. Discovery, NBCUniversal, and AMC Networks saw affiliate revenue declines of 4, 5, 6, and 11 percent, respectively.) But traditional media companies like NBCUniversal and Disney are likely to reap the largest rewards of traditional TV ad spend moving to SVODs and AVODs. Once again, vMVPDs are left out in the cold.

This strategy requires a ton of money and content, which explains why the SVODs are good at this and the vMVPDs are not. Original content accounts for anywhere from 15 percent (Max, Hulu) to 95 percent (Apple TV+) of demand for all streamed movies and shows. The average sits around 30 percent, with Netflix at 66 percent, according to Parrot Analytics, where I work as V.P. of strategy. Also, total demand for streaming originals globally has increased by 158.8 percent between Q1 2020 and Q1 2024. vMVPDs are simply falling farther behind. Realistically, not only is there little reason to stick around on Fubo TV once a sports season ends, there is increasingly little reason to even sign up for Fubo TV if much of the sports and other live events are now available as part of a slightly more expensive (but still way cheaper than Fubo!), say, Disney+ bundle.

Second, successful streaming platforms have become aggregators. Netflix, as I’ve often noted, has successfully aggregated other companies’ content (Suits, Young Sheldon, Grey’s Anatomy) on top of its own originals, packaged within the easiest-to-use app. Indeed, streaming isn’t just about content—it’s also about technology. Spotify has roughly the same catalog as Apple Music, but twice its market share—30 percent of the music streaming space compared to 15 percent, respectively—for much the same reason that YouTube TV is the go-to vMVPD despite having roughly the same content as the others: It’s just a better experience, and in a world of infinite distributors, personalization and ease of use will emerge as key indicators of a victorious product.

Aggregation, which ironically was the original streaming strategy for companies like Amazon and Apple, is the next area of competition among the larger distributors. There are two pathways playing out now, but they’re not mutually exclusive. One is the app store controllers (hardware manufacturers like Apple, Amazon, Google, and Roku) working with suppliers like the major SVODs and AVODs to provide more tailored viewing recommendations across all platforms, thus increasing engagement and advertising revenue. The second is companies like Disney creating their own micro-ecosystems with their collection of apps like Disney+, Hulu, and the upcoming ESPN stand-alone service.

Where does that leave the vMVPDs? In order for a platform to succeed in the post-linear era, it has to be a homepage and a directory. Instead, the vMVPDs are still at the whim of the suppliers, who are envisioning their next critical partnerships.

But here’s the biggest issue for the vMVPDs: Video is becoming a secondary business to the large cable distributors who understand that pay TV’s future is only as firm as the suppliers’ interest in ensuring top-billed programming is exclusively available via those channels. And those suppliers haven’t been interested in that for some time. Sure, video is still important: Cable accounted for Q1 revenue of $6.8 billion for Comcast and $3.9 billion for Charter. And companies like Disney still see significant (but declining) revenues from their pay TV deals. But the Comcasts and Charters are increasingly focusing on wireless packages and broadband lines, finding ways to partner with entertainment suppliers and their streaming services within those pipelines. Meanwhile, the content suppliers are moving their most prized video assets—sports—to streaming services they already own, and are partnering with the Amazons and Verizons to ensure those services generate consistent revenue.

The reality is that Spulu is just another blizzard within a looming ice age. It’s the red cape being waved in front of executives to distract them from the truth: This reckoning has been unavoidable ever since every major studio and network executive decided to pursue streaming, throwing their support behind what could be, and began the process of freezing over the connection to what was.