The recent court decision to temporarily stop Venu Sports -- a joint venture among Walt Disney, Fox Corp., and Warner Bros. Discovery -- has prompted  one major legacy pay TV executive to call for a reexamination for the broader TV “bundling.”

“While DTC [direct to consumer] offerings have evolved, pay TV packages have remained largely unchanged,” writes Rob Thun, chief content officer, DirecTV. 

“Instead of allowing distributors like DirecTV to also develop smaller, more tailored packages at prices that reflect the value they get from the content, programmers have continued to impose and enforce strict bundling requirements through exorbitant minimum penetration rates – the minimum proportion of a distributor’s subscribers required to access a channel," Thun adds.

Traditionally, major TV-based networks leveraged big packaged deals with legacy pay TV distributors -- of sometimes a dozen or more networks -- demanding mandatory high numbers of pay TV subscribers, all of which can drive up the cost to consumers.

With regard to Venu Sports, a court recently issued a preliminary injunction as a result of a lawsuit from Fubo, the virtual pay TV provider FuboTV, which has concerns about potential antitrust behavior and “near monopolistic control” of the three companies behind Venu Sports, which intends to offer a package of 14 sports-focused legacy TV networks to be sold to TV consumers.

Thun agrees with the court’s decision. “DirecTV applauds Judge [Margaret] Garnett’s ruling that the creation of such a genre-based product should not rest entirely with these media giants.” 

At the same time, Thun agrees with Venu Sports’ market research that new network/streaming packages are financially feasible for the marketplace.

“We agree with Venu’s shrouded market-sizing estimates that were unearthed during the trial that recognize an ‘ocean of opportunity’ to offer consumers skinnier packages.”