Viacom CEO Bob Bakish took up the mantle of skinny bundles at the MoffettNathanson Media & Communications Summit in New York May 18, adding that the industry needs to develop a non-sports entertainment bundle at a lower price that will appeal to price-conscious customers.
“We fundamentally believe the market will segment, there will be a low-end entry point, a mid-priced entry point and a higher end,” Bakish said. “The guys in the middle, the [ones charging] $40 [per month], they can’t survive there, it costs too much. Broadcast and sports rights cost too much to contribute margin.”
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Bakish pointed to the United Kingdom, where half of pay TV customers don’t take sports.
“That leads to people looking for different options,” he said.
Viacom is on OTT offerings DirecTV Now and Sling TV, but is not on YouTube TV or Hulu Live TV. Bakish doesn’t see OTT offerings, usually heavy with sports and broadcast channels, cannibalizing his viewers.
“People who like sports usually like a lot of sports,” Bakish said. “Those products aren’t really creating a new demand because they’re not actually that cheap.”
Bakish’s comments seem to echo those of Discovery Communications CEO David Zaslav, who earlier in the month said that the U.S. will eventually follow the European model, with sports-free video offerings costing between $8 and $12 per month.
At the conference, AMC Networks CEO Sapan said AMC’s five channels are typically between 10% and 25% the cost of similar channels, so they should be on every package because they represent a good value. For that most part that has held true – the channels are part of every major skinny bundle offering except Hulu Live TV.
AMC does have an SVOD relationship with Hulu, but Sapan hinted that affiliate fees and positioning might have played a role in keeping it off Live TV for now.
“Price and term and positioning are central to us in every carriage agreement,” Sapan said. “We would reject an offering that didn’t meet our critical criteria for any of those.”
Sapan, who has had the privilege of airing the top rated show in ad-supported cable – The Walking Dead – for seven years, tried to reassure attendees at the conference that the zombie series still has life left in it.
"It's pretty alive and vital and there's a long time that we're going to be playing with The Walking Dead," Sapan said, adding that despite some ratings softness in the latest season, it still averaged twice as many viewers as the No. 2 and No. 3 shows – broadcast’s Empire and Big Bang Theory.