An entertainment-only channel bundle priced around $10 has the potential to draw 4.6 million new subscribers into the pay-TV ecosystem, analyst firm MoffettNathanson says.
Citing research from Altman Vilandrie & Company, the firm predicts that, on top of the new subscribers, an entertainment-only bundle at that price point would also cannibalize 9.2 million pay-TV subscribers. However, should the price increase to $30, the number of new incremental subscribers would drop to 800,000 and cannibalization would account for 1.4 million subs.
As the firm points out, about 17% of U.S. households currently don't have pay-TV services.
MoffettNathanson estimates the wholesale price for a bundle including all channels from AMC, A+E, Discovery, Scripps, Viacom and some independent networks would be around $10. At that rate, an entertainment-only bundle could represent a much stronger financial proposition that the many streaming TV services priced in the $35-$40 range.
“The lower wholesale price of ~$10 creates a low enough cost bar to generate significantly more demand, revenue, and gross profit than the current crop of vMVPD bundles out there today,” the firm wrote in a research note.
