Viacom, which owns channels like Comedy Central and MTV, is in advanced talks to be a part of a sports-free TV package priced at $US10-$US20 a month, CEO Bob Bakish said at a conference Monday, according to Variety.
Last month, Bloomberg broke the news that several cable networks were trying to put together a sports-free package for under $US20, cutting out high-cost channels like ESPN, which alone cost $US6.10 in carriage fees per subscriber in 2016.
Companies like Viacom and Discovery, which don’t rely on sports rights, have come out in favour of it, while Disney CEO Bob Iger scoffed at the notion that such a bundle would be compelling.
Right now, most of the new streaming live TV packages — DirecTV Now, YouTube TV, Hulu with Live TV, and so on — are focused around sports and come in at around $US35-$US40.
“The transformational opportunity is to bring in a new entry segment at a much lower price point,” Bakish said Monday. Earlier this month, Discovery CEO David Zaslav said there’s room in the market for a sports-free package that costs $US8 to $US12 a month.
Broadcasters hate it
There are two basic camps on this matter.
The parent companies of the major broadcast networks — NBC, ABC, CBS, and Fox — have paid a lot for sports rights, so they want no part of a bundle that makes sports seem less important. The cable networks they own are also out. So no FX, USA, or Fox News.
That means the bundle will have to be constructed of companies like Discovery, Viacom, AMC, Scripps, and Turner (though it does have some sports rights). Those five put together could indeed make a pretty compelling cheap “entertainment” bundle at $US20 or less. You would get a spread of programming from CNN’s news, to AMC’s dramas, to Comedy Central or the Food Network. There would be holes, but at the right price people might be willing to overlook it.
Distributors who want to sell such a bundle might run into trouble, however. How? Some of the contracts cable and satellite providers have signed with heavyweights like Disney and Fox have fine print designed to stop new bundles like these. And in 2015, ESPN sued Verizon over a sports-free bundle, saying it violated distribution deals.
But it seems that at least one distributor is looking to bring a $US10-$US20 bundle to market anyway.
Bakish said the package was meant to appeal to “cord-never millennials,” or young people who have never subscribed to cable. As it stands, it’s hard to imagine why a young consumer who isn’t interested in sports would shell out $US40-a-month for his or her first pay-TV bundle. This package is meant to fix that.
The question is whether, without the broadcasters, there will be enough quality entertainment in the bundle to move the needle.