Animal Planet, HGTV enter streaming arena as Discovery launches new service
Discovery Communications, the cable TV home of Shark Week, the Oprah Winfrey Network and reality hits “90 Day Fiancé,” “Property Brothers” and “Dr. Pimple Popper,” is launching a direct-to-consumer streaming service that will make its programming available to consumers without a pay TV subscription.
The service, called Discovery+, will launch Jan. 4, the New York-based company announced Wednesday. It will carry programming from Discovery’s wide range of channels, which include TLC, OWN, Investigative Discovery, Animal Planet and Food Network.
Through a partnership deal with A&E Television Networks, Discovery+ also will offer nonfiction shows from Lifetime, History Channel and A&E.
Discovery is entering a crowded field as media conglomerates such as the Walt Disney Co., WarnerMedia and Comcast have made their programs and films available to consumers who have embraced streaming for their video entertainment, a major habit shift led by Netflix. ViacomCBS is rebranding its CBS All Access service next year as Paramount+.
Disney’s service Disney+ is the most successful of the newcomers, with nearly 75 million subscribers since its launch late last year.
Discovery’s point of difference will be its wide range of unscripted programming, including true-crime offerings from ID, natural history documentaries from Discovery and offbeat reality shows from TLC. The company also has an array of home improvement, real estate and cooking shows from its HGTV and Food Network channels, which were acquired from Scripps in 2018.
While Discovery’s channels remain among the most watched on cable, the steady decline of the overall pay TV universe is an existential threat to its business, as subscriber fees from cable and satellite carriers are a major revenue source. A streaming service is a hedge against an unavoidable decline as more consumers forego pay TV subscriptions.
Discovery President and Chief Executive David Zaslav said Wednesday on a call to stock analysts that he expects his company’s service to be a companion to Netflix or Disney+, which are largely driven by high-end scripted series and movies.
Discovery’s service will have a two-tiered pricing system in the U.S., with an ad-supported version for $4.99 a month and commercial-free streaming for $6.99. Pricing will differ in international markets as Discovery+ has the streaming rights to the Olympic Games outside of the U.S.
The pricing will be lower than other streaming services, on par with the $4.99 per month NBCUniversal is charging for its cheapest premium version of Peacock. Netflix’s standard price is $13.99 a month, while WarnerMedia’s HBO Max is charging $15 a month.
In the U.S., Discovery+ will give consumers access to 5,500 episodes of current and past programs from Discovery’s channels. Discovery+ will launch with 50 original series not immediately available on its cable channels, with programs from its most popular stars including Chip and Joanna Gaines, celebrity chefs Bobby Flay and Giada De Laurentiis, and Mike Rowe, the host best known for his series “Dirty Jobs.” It also will have an original iteration of TLC’s “90 Day Fiancé" and BBC nature programming from David Attenborough.
Zaslav said the company has seen research that shows there is an appetite for Discovery’s content among consumers who are not pay TV subscribers. While cable ratings overall have been declining, Discovery’s channels have seen gains in their share of the TV audience, with a strong appeal to female viewers.
Verizon Wireless’ 55 million customers will get the ad-free Discovery+ for free. As part of the deal, Discovery+ will get marketing support from Verizon with in-store displays and TV advertising.
Some analysts have questioned whether a Discovery streaming service will cut into its cable audience.
“The entirety of Discovery’s business is built on its cable networks, which given the nature of Discovery’s content would likely be highly cannibalized by a direct-to-consumer offering,” media analyst Michael Nathanson of MoffettNathanson wrote last month.
Asked about cannibalization in its analyst call, executives said they expect most of the Discovery+ consumers will be from 30 million homes that have broadband internet but don’t currently subscribe to cable or satellite TV. Zaslav said he believes consumers with pay TV subscriptions may want Discovery+ as well because it offers the full library of shows that can be watched without commercials.
Discovery Communications stock has been rising over the past month in anticipation of the announcement along with a strong advertising market. It was trading near $28 on Wednesday. The stock price hovered around $20 in early November.
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