In the "great unbundling" of TV packages, while half the providers are working to figure out how to include the key draw of live sports in rights negotiations, another set is wondering why the expensive broadcasts have to drive up package prices.
And a group of media companies including Viacom (VIA, VIAB), Discovery (NASDAQ:DISCA) and AMC Networks (NASDAQ:AMCX) are ready to put the idea to the test, reportedly starting discussions about a Web bundle where users don't have to pay for sports.
The move also comes in an environment when smaller content makers like those risk being left out of new "skinny bundles" amid consolidation, as big pipeline providers like AT&T (NYSE:T) pursue content warehouses like Time Warner (NYSE:TWX).
The cost for TV providers to offer ESPN is by multiples much higher than offering many entertainment channels, a key factor in the high price of cable bundles. And in an era when people are fleeing the high-priced bundles, many are saying they'd happily pay for a cheaper option and don't care about sports.
Such a package might cost $20/month, about half the likely price of Hulu's upcoming live service and YouTube TV. It might look a little bit like Hulu's existing offering. But it could also risk backlash from key sports-rights owners like Disney (NYSE:DIS), and could violate major deals requiring sports coverage from both content providers and TV providers.
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