The skinny TV phenomenon continues apace: Viacom, Discovery Communications and AMC Networks are reportedly in talks with pay-TV distributors about creating new online TV services for consumers who don’t want to pay for sports.
Bloomberg, citing “people familiar with the situation,” said that the media giants are in discussions with four to six pay-TV providers, and that such a service could debut by the end of the year. The idea is that without sports rights, which can cost twice as much as other networks, these TV bundles can still offer a good number of channels at a price point of under $20.
It’s unclear as to the exact nature of the positioning, however. While none of these three are part of YouTube’s just-launched live TV service, AMC and Viacom have networks on both Sling TV (DISH’s live package) and DirecTV Now from AT&T, while Discovery is part of DirecTV Now. AMC and Discovery also are both in talks with Hulu to be included in its bouquet when it launches, though Viacom publicly opted out of the Hulu service. But in short, the programmers are not without representation in the live streaming realm.
As for as the content/cost equation, existing skinny TV bundles in the market each have their own special mix of content and price points. Sling TV and DirecTV Now both offer a mix of sports channels, cable fare and broadcast, and start at $20 per month; YouTube Live starts at $35 for more sports networks than either of its two existing competitors but a much more truncated set of cable networks — and no broadcast. Hulu’s Live service is rumoured to launch with 40-60 channels for $40 per month, and include all broadcast networks, sports and a wide swathe of cable nets.
Will under-$20 sports-free TV have enough of a differentiated niche to gain much traction? And will it have enough of everything besides sports to justify its existence? One of the keys to succeeding here will be the ability to break up channel families.
Presumably the programmers are looking to pay-TV distributors to make their vision a reality, because they can aggregate channels based on their existing carriage rights. But this is actually a notable obstacle to the proceedings.
Disney for example owns ABC and ESPN. It’s unlikely that a skinny TV service that doesn’t include ESPN, even as an add-on, will be able to score ABC and Disney on a standalone basis — carriage contracts usually preclude this kind of a-la-carte structure.
Thus, sports-free TV will also be free of one of the Big 4 broadcast players—and the top kids’ network.
When Verizon tried to pioneer this territory with Custom TV back in 2015, it landed in legal trouble.
It may make more sense for Discovery, AMC and Viacom to consider their own over-the-top standalone network, similar to CBS All-Access, for around $5 per month. $7 to $8 per sub is about what ESPN commands in its carriage contract versus much, much less for regular cable nets. So, they could split the difference.