Inside Discovery’s Streaming Bet

In a presentation last week, senior execs from Discovery, Inc. unveiled the new discovery+ platform, which is set to launch January 4.

Last week, senior management at Discovery, Inc., including David Zaslav, president and CEO, and JB Perrette, president and CEO of Discovery International, lifted the lid on the company’s upcoming streaming platform. Set for launch January 4, discovery+ is being positioned as the definitive subscription streaming service for real-life entertainment, delivering content from across the Discovery portfolio of brands, select acquisitions and a raft of originals in the verticals of lifestyle and relationships; home and food; true crime; paranormal; adventure and natural history; and science, tech and the environment.

Unveiling the service in a 90-minute presentation that included appearances from an array of Discovery’s key personalities—among them Chip and Joanna Gaines, Bobby Flay, Giada De Laurentiis, Mike Rowe and Guy Fieri—Zaslav called the new platform “the most distinct, clear and unique streaming service in the world,” with a January launch “that harnesses the marketing power of our networks, platforms and the reach we have across the entire world. All of our touchpoints can push people to discovery+, whether it’s through franchise extensions, community building around our stars and genres, behind-the-scenes content and so much more.”

The stable of beloved personalities that front shows across the Discovery portfolio “is one of our biggest strategic advantages,” Zaslav said. “We have always believed that great IP that we own globally in every language, great brands, great talent and a wealth of entertainment and sports content around the world sets us apart.”

The platform will launch in the U.S. with a partnership with Verizon in place; the telco’s customers on select plans will get 12 months of free access to discovery+. At launch, the platform will feature more than 55,000 episodes from Discovery’s own brands, the BBC’s natural-history slate and A+E Networks, as well as 50-plus original series. “For the last two years, we have been quietly and aggressively producing and acquiring a vast amount of content just for discovery+, in every language,” Zaslav said. “We’ve been hard at work with our favorite producers and new producers, award-winning storytellers and our vast cast of authentic personalities to create original and exclusive stories for discovery+.”

Noting that the streaming landscape in the U.S. and globally remains crowded, Zaslav said Discovery sees a “compelling white space to offer consumers everywhere a broad and unique unscripted streaming product. It will be a perfect complement to every household’s streaming portfolio. It will be additive to the market, everywhere in the world.”

Discovery plans to bring discovery+ to more than 25 countries over the next year and has already secured deals with Telecom Italia and Sky in the U.K. The platform will be the streaming home of the Olympics in Europe, Zaslav noted.

Perrette said that the global reach of Discovery’s channels will be hugely beneficial as it embarks on its direct-to-consumer push. “Discovery pioneered what it means to be a truly global media company,” Perrette stated. “Our footprint extends to over 200 countries and territories. We are distributed in more than 50 languages, and we reach more than 800 million global viewers every month. With 80 percent awareness, Discovery is at the very top, right alongside Disney, as one of the world’s most recognizable and admired media brands.”

The pandemic has further proven the appeal of Discovery’s content, Perrette added. “In these challenging times, people are gravitating to content that is comforting, centered around areas they love most, and that gives them and their families joy. That’s in part why our international audiences are at all-time record highs in 2020.”

Perrette stressed the importance of Discovery’s on-the-ground presence as it embarks on the discovery+ launch plans. “We’ve learned over the last three decades that in order to scale, and not just skim, it requires going deep with local faces and local stories. That is a key pillar of the Discovery difference. No streaming service will bring the full world of real-life entertainment to you like discovery+.”

Pricing internationally will mostly be in line with the U.S. model—ad-supported for $4.99 a month, ad-free for $6.99 a month. However, Perrette explained, “to maximize scale and economics, it’s best not to take a one-size-fits-all approach. So outside the U.S., discovery+ consumer packages will vary by market. Only ad-free subscription in some, both ad-lite and ad-free in others, and in a few markets, particularly where we have free-to-air networks, a small ad-supported free tier.

“We’ll adapt to local market dynamics as we launch in LatAm and Asia,” he continued. “Markets with a sports offering will have additional pricing and packaging options.”

Perrette said that he and his team have been laying the groundwork for the discovery+ launch internationally over the last few months by “expanding our partnerships with some of our biggest and most important international distributors in many key growth markets. We have methodically secured strong long-term value for our core TV portfolio, while also partnering on our direct-to-consumer future, striking this balance between preserving and extending the economics of our traditional business, and growing our next-generation business.”

The presentation also saw Lisa Holme, group senior VP of content and commercial strategy, teasing some of the upcoming originals, which includes a slate of 90 Day extensions, Bobby and Giada in Italy, American Detective with Lt. Joe Kenda, Mysterious Planet, Six Degrees with Mike Rowe and P.S., Burn This Letter Please.

CFO Gunnar Wiedenfels closed out the presentation by noting the potential of the new service amid headwinds in the pay-TV space. He said the Discovery-Scripps transaction two years ago laid the foundation for the company to be better positioned for this direct-to-consumer pivot. “We believe [discovery+] will appeal to not only the growing broadband-only universe, which we currently do not reach, but also to many current subscribers to our linear channels that desire an even deeper level of engagement with these beloved brands and personalities—or simply an ad-free viewing experience.”

The potential market for the service in the U.S. is 70 million homes, Wiedenfels said. Internationally the potential market is more than 400 million households.