• by Wayne Friedman , Staff Writer, July 20, 2017

New, cheaper TV packages of networks -- the ones that cost $20 to $45 a month -- are coming. That means many networks will be left out -- especially cable networks.

Will a big cable network merger gain leverage? Maybe not.

Discovery Communications and Scripps Networks Interactive are two of the companies potentially considering this option. Others might be in the mix, according to analysts -- especially other cable-centric TV network groups, such as Viacom and AMC Networks. 

At issue are skinny TV bundles, those new virtual MVPDs (multichannel video programming distributor). But not all cable networks will make the cut in those packages.

Scripps has long been attractive to many TV media companies, given its strong networks, such as HGTV, Food Network and Cooking Channel. The group has outperformed other cable network groups -- and the category overall -- in terms of advertising sales growth for a number of years.

Michael Nathanson, senior media analyst of MoffettNathanson Research, believes times have changed. Scripps hasn’t had a good year with viewership growth, slipping a bit — a 5% to 10% decline, on par with cable network declines.

On the upside, Scripps is still growing ad revenue. Nathanson estimates Scripps will see a 4% hike for second-quarter 2017 versus the same period the year before.

So now may be the time to sell.

However, John Janedis, media analyst of Jefferies, sees a downside in a possible Discovery/Scripps merger. “While largely reality programming, the genres/content are different. [But there are also] differences in pay scale/ cultures and viewership issues... It may not solve the skinny-bundle challenge.”

A key example here is considering a new-ish vMVPD, YouTube TV. That effort started earlier this year with the idea that the four broadcast networks could be primary anchor-channels. The price tag for consumers is $35 a month.

But YouTube TV includes dozens of cable channels such as ESPN, USA, FX, Disney Channel, MSNBC, Fox News, Sprout, E! and Bravo -- channels owned by the same media companies that own the broadcast networks. Network groups not included at launch? This list includes Turner, AMC, Scripps and Viacom.

Discovery has 13 U.S. networks (including a joint venture in OWN) and 12 international networks. Scripps has five U.S. networks and interest in two international networks. Broadcast networks aside, not all those nearly two dozen networks will make the grade with new digital TV network packages.

So what happens if half of those networks don’t find new digital homes? Will they move to lower-profile website video content? Now multiply that idea a few times to account for the bigger cable market.

Is this the new ecosystem for TV networks?