Virtual MVPD Skinny Entertainment Bundles Coming, MoffettNathanson Says

Current pricing of virtual MVPDs is probably too high to attract cord cutters/cord nevers, MoffettNathanson analyst Michael Nathanson wrote investors Thursday. Entry-level bundles are priced at $35-$40 monthly, and economics of wholesale pricing preclude distributors from going lower, he said. Inclusion of broadcast and sports networks "creates a very high bar for distributors" that cuts the ability to be profitable while also keeping pricing low enough to stimulate incremental demand. Nathanson called it "a strong likelihood" that an entertainment bundle of channels will be tested soon. The wholesale cost of such a bundle, if it excludes broadcast-led network portfolios, might be roughly $10 monthly, which could generate more demand, revenue and gross profit than current virtual MVPD bundles, he said.