By David Teich

Facing a glut of competition, “virtual MVPDs” are scrambling to set themselves apart. But a couple of companies face an added challenge: They’re in competition with their own pay-TV services.

“Virtual MVPDs” are out in force. Industry pros understand the basic concept by now (even if many consumers still don’t): Subscribers get a skinny package of live TV channels, delivered over the internet. And since those customers are settling for 50ish channels instead of hundreds, they a pay a lower price than they would for a traditional cable or satellite service.

There are nearly 3 million skinny bundle subscribers now. But the companies offering those services face myriad challenges. Profit margins are skimpier than with cable or satellite, and many would-be customers don’t even know these services exist. Perhaps toughest of all, the competition has become fiercer.

Dish Network was the first into the space, when its Sling TV offering debuted in 2015. Sony entered the market with its PlayStation Vue product about a month later. For a while there, it was just the two of them. But last year, the dam started breaking. AT&T’s DirecTV Now, Google’s YouTube TV, a service from Hulu (just called Hulu), and the sports-heavy fuboTV all debuted between November and May. Think about that: Six players, most of them corporate giants, are in the market with highly similar products. And each company faces the unenviable task of convincing consumers that its offering is better than those of the other five.

As if that weren’t difficult enough, two of the services in question – Sling TV and DirectTV Now – are seemingly in competition with themselves: Dish Network and AT&T still have their (far more lucrative) traditional pay-TV businesses to think about. “Not having two competing services under one corporate roof is an advantage for us with PlayStation Vue,” said Nancy Kim, PlayStation’s Senior Director of Entertainment Product and Services Marketing.

But however real the threat of cannibalization may be, it’s not stopping AT&T and Dish from vocally marketing their services. “I’m not sure that DirecTV Now or Sling TV are being that shy about promoting live streaming at the possible expense of their more traditional satellite pay TV services,” said Alberto Horihuela, fuboTV’s co-founder and CMO. “DirecTV Now launched with a full-page takeover on the DirecTV home page, and Sling TV has ads literally saying ‘say goodbye to the way TV used to be.’”

And goodness knows the companies are spending like they want people to know about their offerings. According to new data that analytics company iSpot.tv provided exclusively to Cynopsis, Dish spent nearly $28 million on national advertising for Sling TV between January and July. That includes over 24 thousand airings of 11 distinct ads, running on channels such as NFL Network, NBA TV, and AMC. And AT&T spent $26 million on DirecTV Now ads, running spots on high-profile programming such as the Grammy Awards, NFL football, and NBA basketball.

And that’s just TV; those numbers don’t account for the two companies’ robust digital campaigns, which run across social media sites and other online platforms. Plus, both companies have enlisted high-powered agencies and influencers in their efforts. AT&T worked with BBDO on its latest spots, which star actor Michael B. Jordan. Dish has worked with the agencies Society and Camp + King to promote Sling TV; the company is still trucking along with a year-old campaign featuring actor Danny Trejo.

Suffice to say, AT&T and Dish aren’t playing the marketing game timidly: They’re out to rack up as many customers as possible. And if you ask the two companies, they’ll tell you it’s not that they want to poach their own subscribers; it’s just not something they’re worried about, they say. “The customer that we target is very different from a Dish customer,” Roger Lynch, Sling TV’s founding CEO, told Cynopsis in a recent interview. (Between that chat and the publication of this article, Lynch was announced as the next CEO of music streamer Pandora.) “Sling TV’s customers tend to be much younger,” Lynch said. “They tend to be more urban…Customers are self-segmenting into the different services.” Lynch added that only a “tiny, single-digit percent” of Sling TV’s customers had migrated from Dish.

Similarly, AT&T expressed confidence that it’s only reaching its desired customers. “We’re reaching a different market with DirecTV Now,” said spokesperson, adding that marketing through digital channels has enabled the company to reach customers not usually targeted as potential satellite customers.

Sling TV and DirecTV Now do differ strongly in one area: branding. Whereas DirecTV Now is closely tied to the DirecTV satellite service – it uses the name “DirectTV,” after all – Sling TV would be just as happy if its target customers didn’t know Dish Network existed. “I like it when people just say Sling TV and not Dish Network,” said Lynch. Indeed, Sling TV is largely structured as a separate company.

Dan Rayburn, a streaming media expert with the research firm Frost & Sullivan, agreed that Sling TV’s messaging efforts don’t seem to be hampered by any sense of internal conflict, saying, “Sling TV has really separated itself from Dish.”

When it comes to DirecTV Now’s approach, Rayburn suggested something else might be at play. “DirecTV Now’s messaging to the market was very clear when they rolled this out,” he said. “It was, ‘we’re using this to upsell multi-stream households to DirecTV.” In other words, perhaps households will subscribe to DirecTV Now but ultimately upgrade to satellite, especially if they chafe at DirecTV Now’s limit of two concurrent streams per subscriber. Cannibalization in that direction would only be a good thing for AT&T.

Ultimately, it’s hard to say whether DirecTV Now or Sling TV pose a threat to DirecTV and Dish Network. These services didn’t spring up for no reason: The pay-TV sector has been naturally bleeding customers for a long time. Dish Network lost a net 196,000 pay TV subs in the second quarter of this year, even as Sling TV is widely believed to have locked in a healthy number of new subs. (Dish doesn’t distinguish between Sling TV and its satellite biz in its earnings reports, so it’s impossible to pin down precise numbers.) Meanwhile, AT&T lost 351,000 traditional video subs in Q2, while DirecTV Now added 152,000. The company says that DirecTV Now has close to 500,000 subscribers. Sling TV likely had about 1.3 million as of Q1, according to Rayburn’s Wall Street sources. (Again, Dish doesn’t offer those numbers.)

But it’s not exactly clear how many traditional pay-TV subs are jumping ship to the cheaper options offered by the same companies. In any event, now there are six skinny bundle options on the table, and more are on the way. Even Comcast plans to launch one, likely by Q3. If subscribers want to jump ship, they can do so, and they will land somewhere.

So there’s really no incentive for AT&T or Dish to run tepid marketing campaigns: They’re going to lose pay-TV subscribers no matter what. And if they don’t lock those customers into their own OTT offerings, they’ll lose them to a competitor.