Scripps Networks Interactive continues to draw potential suitors as reports indicate Viacom is also interested in merging with the programmer.
Viacom, home to networks including MTV and Nickelodeon, has had talks with Scripps, home to Food Network and HGTV among others, about potentially joining forces, according to Reuters.
The mention of Viacom as an interested party in Scripps comes after reports Wednesday that Discovery Communications—home to networks including Discovery Channel and TLC—had rekindled talks about of a potential merger with Scripps.
Potential mergers talks between Scripps and Discovery and Viacom arrive amid Viacom CEO Bob Bakish’s continued assurances that a less-than-$20 entertainment-only channel bundle will be a reality for pay-TV subscribers within the calendar year.
"With a 30% margin you can price it in the low-teens to up to $20 depending on how much product. Our sense is you want to be at the lower end of that price point to really have something to appeal to cord-nevers and again create a catalyst at that entry point in the market," Bakish said.
Discovery has also suggested that a lower-priced nonsports bundle is a smart move for the future. Discovery CEO David Zaslav has been careful to point out that pay TV doesn’t want to take on Netflix directly with a skinny bundle, but that service providers need a package priced similarly to Netflix in order to properly address the market segment looking for entertainment bundles in the $10-$20 range.
“That’s what’s worked everywhere else in the world,” Zaslav said, adding that channel bundles without sports are accelerators for the pay-TV market everywhere in the world.
An entertainment-only channel bundle priced around $10 has the potential to draw 4.6 million new subscribers into the pay-TV ecosystem, said analyst firm MoffettNathanson.
MoffettNathanson estimates the wholesale price for a bundle including all channels from AMC, A+E, Discovery, Scripps, Viacom and some independent networks would be around $10. At that rate, an entertainment-only bundle could represent a much stronger financial proposition than the many streaming TV services priced in the $35-$40 range.