Discovery CEO: Many TV channel packages are 'overstuffed turkeys'

Discovery Communications CEO David Zaslav speaks at Investor Day 2015
Discovery CEO David Zaslav

As AMC, Discovery and Viacom reportedly work with operators on a skinny nonsports bundle, Discovery CEO David Zaslav said there needs to be a response to the “overstuffed turkeys” currently available.

The fowl reference came in response to a question during today’s earnings call about live sports rights pushing up the cost of traditional MVPD packages and emerging virtual MVPDs, many of which are starting around the $35-$40 range.

Zaslav said that U.S. consumers will react to these prices by demanding a lower-cost option and that the U.S. industry needs to be ready to accommodate that demand.

A skinny bundle could help to stem the tide of losses sweeping across the pay-TV ecosystem. During the first quarter, MoffettNathanson analyst Craig Moffett estimated total losses for the industry reached 762,000 video subscribers.

“We as an industry need to complement that with a true skinny bundle,” Zaslav said.

Zaslav said that Discovery has already had success finding its way into many skinny bundles and nonsports packages in global markets. Indeed, Discovery just reported its international distribution revenues rose 10% annually.

RELATED: Viacom CEO cautious about positioning SVOD as alternative to pay-TV

Discovery could be looking to replicate that success in the U.S. by partnering with other entertainment networks to launch nonsports channel bundles in cooperation with operators.

According to Bloomberg, the programmers are in talks with four to six operators about a livestreaming channel package offered over the internet, and one such service could become available as soon as later this year.

The packages being discussed could be priced at less than $20 per month, according to the report.

Viacom CEO Bob Bakish said last week that SVODs and skinny bundles are important, but that we have to be careful we’re “not creating inexpensive opportunities to serve as an alternative.”

Bakish noted that operators like Charter have hinted about offering a nonsports bundle and that Viacom sees the entertainment channel pack initiative as fitting in perfectly as a low-price entry point for consumers who aren’t currently in the ecosystem. He added that Viacom is in “very deep” conversations with one particular company about launching a nonsports bundle and any bundle like that would probably include integrated over-the-air broadcast signals.