A skinny bundle without sports? Duh

By Jim O'Neill on May 25 2017 at 10:30 AM

Skinny bundles from cable operators – and their OTT surrogates like Sling TV – are becoming more common as the companies try to look more attractive to consumers tired of paying for 200-plus channels when they really only watch a dozen or less. Survey after survey has shown that subscribers are hungry for not just a slimmed down offering but also for the subscription savings smaller bundles would engender.

Now, Viacom CEO Bob Bakish told attendees at the JP Morgan Global Technology, Media and Telecom conference this week, there’s an effort being made to craft at least one bundle sans sports… usually the biggest ticket item a bundle contains.

That there’s an effort afoot to roll out an entertainment-only bundle isn’t really a surprise. That it’s taken this long is.

There’s little doubt that sports – especially live sports – is the last bastion of appointment TV. Events like the Super Bowl, the NCAA College Football Playoffs and March Madness maintain an aura of invincibility that continues to attract major ad dollars and millions of real-time viewers.

But all of them are starting to show chinks in their collective armor, as Millennials – the bane (and best hope) of pay-TV providers – begin to drift away from the sporting life.

As Sports Illustrated reported this month, there was a stark irony in ESPN’s multi-day celebration of the NFL draft, the culmination of hundreds of college football players’ careers, at the same time ESPN was laying off a huge swath of it journalists who cover college football all season long.

Those ESPN jobs were the equivalent of the canaries that used to be carried into coal mines as early warnings of toxic gas.

And, it’s not just college football. Attendance at live events, viewers of live sports on TV, subscribers to ESPN (to the tune of 12 million fewer today than in 2011), all are indicators of a significant change in what viewers really want to watch.

I wrote about the declining interest Millennials had for live sports back in November, noting that researcher Analysis, in a survey of 32,000 consumers in the United States and the United Kingdom, found younger viewers far less likely to care about sports than older viewers. In fact, just 11% said sports was their favorite content genre, an abysmal number.

And, there have been other reports along a similar vein for a couple of years.

That it’s taken this long to offer a sports-free package is both a concession to the power of sports broadcasters and an acknowledgment that pay-TV providers are really not in tune with their subscribers.

Viacom’s Bakish said as much during his appearance at the JP Morgan confab, noting that cord-never Millennials aren’t really being drawn to current skinny bundles offered by the likes of Sling TV and DirecTV Now or the soon-to-launch bundles from Hulu, YouTube and the rest.

The reason? There’s still too much “legacy” in the new TV ecosystem.

“The transformational opportunity is to bring in a new entry segment at a much lower price point,” Bakish said.

Stay tuned.

Jim O’Neill is Principal Analyst and Strategic Media Consultant for Ooyala. You can follow him on Twitter @JimONeillMedia and on LinkedIn

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