Discovery CFO: Viewer Taste Will Drive Skinny Bundles

Wiedenfels sees Scripps purchase helping with slimmer virtual MVPD packages

While some virtual MVPDs have kept Discovery Communications’ networks off their domestic skinny bundle packages, viewer demand and its recent purchase of Scripps Networks could force distributors to loosen their belts, chief financial officer Gunnar Wiedenfels told an industry audience Friday.

Discovery has been successfully launched on several skinny bundle packages in Europe and has a deal with Amazon Channels in Germany and the U.K., for subscription VOD offerings of its channels. In the U.S., the row has been tougher to hoe – its networks are included in services like Sony PlayStation Vue and DirecTV Now, but have been left out of others like Hulu Live.

At the Bank of America Merrill Lynch Media, Communications & Entertainment conference in Los Angeles Friday, Wiedenfels said that isn’t because Discovery’s content isn’t considered must have – he pointed to research that shows its content is very much in demand with cord-cutters and cord-nevers. And he said that could change as the business matures.

“I am absolutely convinced that over time viewer taste and the viewer experience is going to determine what content gets offered,” Wiedenfels said of smaller video packages.  “We know that consumers are willing to pay for our brands. Across the globe we’re in virtually all relevant skinny bundles.  We’re much more successful outside the U.S., with deals in Europe and U.K. and Germany with Amazon. There’s additional demand and there is so much evidence that people want our content.”

In the U.S., Discovery networks have made it on to some skinny bundles – DirecTV Now, Sony PlayStation Vue – but not on others, like Hulu Live. Wiedenfels said there are some structural issues behind that. Hulu, owned by The Walt Disney Co., 21st Century Fox, NBC Universal and Time Warner Inc., most likely had an interest in getting their own products distributed. And as Discovery nears the close of its $14.6 billion purchase of Scripps Networks – expected in the early part of next year – that should make its content offerings all the more appetizing.

Discovery agreed to purchase Scripps Networks in July, which will add channels like HGTV, Food, Travel and DIY to its lineup. In the past, Discovery CEO David Zaslav has said the combination could allow the programmer to create its own skinny offering

“Over time the consumer’s taste is going to determine what those bundles will look like,” Wiedenfels said. “I’m very confident the Scripps acquisition should hopefully give us some additional tailwind here because we’re expanding the portfolio we have today that is already a strong portfolio with passionate brands.”