Cable programmers such as AMC Entertainment Holdings Inc (NYSE:AMC), Discovery Communications and Viacom, Inc. (NASDAQ:VIAB) are holding discussions with a view to unveiling an online television service that will cater to consumers who are not willing to be charged for sports. Though sports constitute some of the more popular forms of live programming, it is unfortunately the most expensive. The service will mean that entertainment-only packages will be offered over the internet by television providers. One such package could be introduced as early as this year.
Live television services
Channel owners who have been losing subscribers now want to embrace web-based television services. This comes in the wake of consumers substituting expensive pay-television packagers for options that are cheaper. Some of the channels have, however, been left out of the new wave of skinny bundles. Discovery and Viacom, for instance, are not part of the live television services that are being offered by Alphabet Inc (NASDAQ:GOOGL) YouTube or even the one that will soon be offered by Hulu.
According to a source, a package that doesn’t come with sports would be priced at a monthly fee of less than $20. This would be cheaper than what is likely to be charged by YouTube and Hulu for their television packages. The reason that Hulu and YouTube will be more expensive is that they will be providing close to 40 channels and this will include ESPN as well as other broadcasters such as CBS, Fox and NBC which are heavily reliant on sports programming.
Meager returns
However, these initiatives might be fought fiercely by media giants such as Walt Disney Co (NYSE:DIS) which owns ESPN. About 24 months ago, Verizon introduced a bundle branded Custom TV that didn’t feature any sports. Verizon was however sued by Disney for what was termed as contract violations. The wireless carrier was to later introduce two bundles – one without sports channels and another one with sports channels.
But even as the efforts to offer sports-free bundles gather pace, analysts are of the view that such packages will offer measly returns if any.
On Thursday shares of AMC Entertainment Holdings Inc fell by 0.33% to close the day at $30.20.