Discovery’s self-described “experiments” with programming on emerging streaming service Discovery + are one of the reasons why it quickly reached nearly 12 million direct subscribers.
The company announced the streaming totals – of which Discovery + is the largest – as part of its fourth-quarter earnings report. Discovery + was launched on January 4 in the US and the $ 5 per month ad-lite service is launching worldwide. Several major Discovery franchises on networks such as TLC and HGTV have had new iterations in premiere, not linear. The joint venture with the BBC produced the David Attenborough story A perfect planet.
Like other traditional media companies that still collect a lot of fees from pay-TV operators, Discovery needs to walk a fine line to power Discovery +, while also retaining new programming for traditional networks. Asked about the balance on the company’s quarterly earnings call with analysts, CEO David Zaslav said: ‘We’re just experimenting, we’re moving a little bit – we’re moving things around. But we still have a full commitment to the existing bundle. We is the bundle. I mean, it’s basically news, sports and us. ”
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As for the prospect of moving more original to streaming, Zaslav and other executives emphasize the 55,000-hour streaming library and a less-hit mentality than that of other players for subscription. “Top shows that are going on,” estimates Zaslav, “represent less than 10% of what people watch.”
Charlie Ergen, chairman of Dish Network, which led to Discovery’s quarterly earnings call a few hours ago, is keeping a close eye on the implementation of Discovery +. Ergen has long been known for his barefoot dealings with programmers and his willingness to abandon networks he’s not worth paying for (including HBO, which has been dark on Dish for more than two years, as Ergen noted.)
“Discovery’s have good content and we’ve had a long-term relationship with them,” Ergen said. ‘But it’s clear that, to the extent that you put it on a à la carte basis, it will affect future negotiations. Many of our customers do not watch Discovery. Should we tax every customer with Discovery if they can find it elsewhere? … It’s just economics. This is not rocket science. ”
Asked by Ben Swinburne of Morgan Stanley whether he “feels optimistic or comfortable putting your best IP on D-to-C versus linear,” Zaslav replies, “I would not say ‘best’. ‘I would say’ else.’ “
The traditional networking business is still central to Discovery’s strategic thinking, he emphasizes. “It’s still an excellent model,” he said. “And we think it’s going to last a long time. It is also an amazing feeder. So, the people who watch our cable channels buy the [streaming] product. ”
Discovery learned a lot from his first weeks in the streaming game, Zaslav said. Based on the initial customer feedback, he explained, Discovery + is a service that people can look at in two ways. The one is: while cooking, they can – we’ve added a feature where you can – almost like a synthetic channel, which if you like Fixer Bo and you love the Property Brothers and you love Guy Fieri, you can just post it in the app. And this is what will run all day. On the one hand, do you really want to watch Attenborough or this great crime documentary, or Ina Garten doing a great show with Melissa McCarthy. ”
At many entry points for entries, he said, programming is “there for intent, where you want full focus.” He said Discovery has some of the titles, “but we also have the ability to be a companion.” According to him, the latter function is of utmost importance for the promotion of the relationship with advertisers, of which about 100 have already bought time on Discovery +.