With five vMVPD offerings jockeying to siphon subscribers from traditional cable providers with broad packages of dozens of channels, there is increasing talk of the need for more tailored entertainment offerings. Discovery chief David Zaslav said an under-$10 counter to Netflix should be more of a priority than "overstuffed turkeys" like Hulu TV, Sling TV or PlayStation Vue.
Opinion is divided on the viability of a pure-entertainment play, with vMVPDs saying they have the best internet-delivered bang for the buck, while analysts see more general entertainment players coming, especially given that sports rights will make standalone sports far trickier to deliver.
Cablefax gathered sentiment from programmers, distributors and analysts and found some friction points around pricing. Univision executive VP of content distribution Eric Ratchman expressed support for a more targeted, entertainment-focused bundle. He said that stance is born of frustration that neither YouTube TV nor Hulu carry his company’s channels, despite the fact that 90% of Univision viewers watch other English-language channels.
“They’re challenged on their margins after getting the four core broadcasters in at their $35 retail price point, that they’re just under water,” he said. “Paying for us on top of them at launch, they have not been willing to pick us up.”
BTIG analyst Rich Greenfield sees a streamlined entertainment bundle as inevitable in the next six months, especially as sports becomes its own distinct part of the entertainment landscape. He told Cablefax sports fans are already "super-served" by traditional bundles. “So, if you believe the sports fan is staying the big bundle, the question is what’s the most compelling bundle for non-sports fans,” Greenfield said. “If you’re looking for a broad cross-section of general entertainment networks, kind of the niche general entertainment networks—History Channel, Nat Geo, Nickelodeon, Discovery ID—there’s a whole wide array of family-fresh, kid-skewing networks that could probably be made available for $15-plus.”
Having just gone through a deliberate and detailed process of evaluating and negotiating with networks for Hulu as it readied its skinny service, Tim Connolly, the company's head of distribution and partnerships, is a believer in offering more choice. Having a non-sports bundle, for him, is a no-go.
“We just don’t think that’s nearly as compelling because, in terms of live services and current-season services, sports and news are the cornerstones of the MVPD business,” he said. “There are so many ways you can get entertainment services—whether that’s through Netflix, our SVOD services or all of the premiums now going direct to consumer; there’s lots and lots of ways to get entertainment services.”
Viewers, he added, need to be able to find what they want, as they always have. “If the Discovery networks are critically important to you as a TV viewer, when you look at our content lineup, you’re just not going to buy us,” he said.