David Zaslav says “incomplete” $40 to $70 a month offerings won’t succeed with price-conscious consumers.
Discovery Communications CEO David Zaslav on Wednesday said a $10 per month skinny bundle without sports is headed to the U.S. market.
The exec told the 2017 Bernstein Strategic Decisions Conference in New York City that $8 to $12 a month skinny bundles are common in most parts of the world, especially in Europe. “There’s no sports. It’s fewer networks,” he said of entry-level sports-free video packages that allow consumers to sample the TV experience.
Zaslav told investors “incomplete” $40 a month internet-style cable packages increasingly on offer in the U.S., combined with another $30 a month for broadband, was not a compelling offer in the cord-cutting age. “That’s $70 to $80. That’s not a skinny bundle,” he said.
Hulu recently unveiled a new service with programming from CBS, Fox, Disney and Turner that’s priced at under $40 a month. Sling offers the cheapest plan at $20 a month for around 30 channels. And AT&T offers the $60 a month DirecTV Now service with more than 100 channels as part of its own effort to mitigate TV subscriber erosion.
It’s part of an industry-wide push to target consumers with no access to pay TV, have cut or want to cut the cord, or have no interest in signing up for linear pay TV. Viacom CEO Bob Bakish earlier this month echoed Zaslav by telling market watchers a non-sports video bundle at a lower price than currently on offer domestically was needed for cost-conscious TV viewers.
Bakish called for three clearly-defined package tiers offered by cable companies, with the middle one needing to be more expensive than the $40 skinny bundles because the content, assuming they included sports, will cost about $46. “The guys in the middle at $40 can’t survive there,” he told the MoffettNathanson Media & Communications Summit.
Zaslav on Wednesday argued the U.S. market is out of synch with the international marketplace. “The rest of the world is a full bundle, a sports bundle, sometimes sports intertwined with a full bundle, and then a skinny bundle. I believe we will ultimately get there,” he told investors.
Zaslav added cable and phone giants couldn’t continue to deny consumers an inexpensive skinny bundle and allow Netflix without sports to be the only low-price bundle commonly available. “I think there will be and should be a small bundle in the U.S. that offers not everything, but it’s got some stuff,” he said.