• by Wayne Friedman , Staff Writer, August 22, 2024

With Venu Sports seemingly weakened after a judge ruled to temporarily halt the launch of the joint venture, analysts are now considering the broader concept of TV bundling -- the basis for TV network business for decades.

Even while a judge agreed that consumers do have some choices in choosing the type of bundling they can buy -- say, from cable TV operators, satellite TV distributors or other companies -- “on balance these practices are bad for the consumer,” according to Margaret Garnett, U.S. District Court Judge.

Garnett says it isn’t fair, generally speaking, that only sports-loving viewers should have to pay for non-sports channels they don’t want.

At the same time, it is also unfair that entertainment-only loving consumers would not have to pay for costly sports channels that are packaged into their bundle and drive up their price.

Looking at Venu Sports specifically, Garnett’s concern is that consumers who want only sports channels should not have just one place -- one distributor -- to go to to attain that product.

Venu Sports would be that place. Offering 14 channels would be that kind of one-distributor exclusive offering via a joint venture.

On top of all this, court documents say that joint-venture participants -- Walt Disney, Fox and Warner -- would be keeping 100% of all the advertising on the 14 sports networks in their bundle. 

This would be unlike nearly all other traditional pay TV bundles. 

Cable TV systems (like Comcast, or Charter) or satellite TV providers (like DirecTV or Dish Network) traditionally get two minutes of local advertising time to sell per hour on the networks they carry. This gives these pay TV distributors a piece of action -- especially valuable for major live TV events such as NFL playoff football games, the Oscars and the Emmys, for example. 

For decades, TV consumers have complained about not being able to buy exactly the channels they want. 

TV network owners -- and pay distributors -- counter that getting 200 or 300 channels for, say, $70 to $80 a month is a good deal. They would add that if consumers got what they wanted -- a true “a la carte” process, where they could pick and choose specific networks -- their overall consumer price would be much higher.

This goes against the tide of the current streaming world that started up with giving consumers huge choice in making their own bundles as it were-- as well as easy options to cancel any and other streamers. 

Now things have changed -- to an extent. TV-network based companies now say they need each other to “bundle” these streaming apps together --  for long-term profitability, perhaps with more limited cancellation options.

In this regard, a Venu Sports joint venture is more a result in response to legacy pay TV issues, looking to stem the flow of cord-cutters -- by packaging legacy, live TV sports-focused TV networks in a virtual pay TV offering, owned and distributed by the joint-
venture partners.

Why did these three big TV-network based companies take this big swing? 

Seems like desperate times. The decline in positive net income/cash flow from linear TV needs to slow down in order to give their premium streamers' business more time to grow into steady profitability.

That promising, shifting dynamic now looks to be much more difficult to achieve.