Discovery waded into the crowded market of streaming TV services on Wednesday with a new direct-to-consumer product called Discovery Plus that it hopes will grab the attention and wallets of cord-cutters in the United States.
The announcement came less than two weeks after The Desk exclusively reported Discovery’s intentions to launch a domestic version of its overseas streaming service that also bears the Discovery Plus brand name.
The domestic service will include thousands of hours of content from across Discovery’s portfolio of cable channels, including its flagship Discovery Channel, Animal Planet, TLC, Oprah Winfrey Network, Food Network, HGTV, Science Channel and Investigation Discovery. The service will also include TV programs licensed from third party companies, including A&E Networks and BBC Worldwide.
At launch, Discovery Plus will cost $5 a month if customers are willing to sit through a handful of advertisements. Those who want to watch shows without commercials can upgrade their subscription for an extra $2 a month. Verizon’s wireless phone customers will be eligible to receive the cheaper subscription for free.
Discovery is the latest media company to enter the streaming TV space as entertainment giants respond to a consumer shift away from expensive, traditional cable and satellite packages toward cheaper online-based offerings. Comcast (Peacock), AT&T (HBO Max) and the Walt Disney Company (Disney Plus) have launched similar offerings over the last two years.
But Discovery’s decision to enter the direct-to-consumer streaming space is unusual in that, until recently, the company appeared to favor its partnerships with cable, satellite and streaming pay TV services. It even invested heavily in a budget-friendly streaming service Philo, which offers Discovery’s channels among others for $20 a month.
On Wednesday, Discovery’s chief executive David Zaslav said the company is not shifting away from cable and satellite completely — customers will still have to subscribe to a pay TV service like Comcast, DirecTV or Philo to get the company’s live channels — but is instead offering consumers an alternative to the fiction library in Netflix and Disney Plus with a single streaming service for non-fiction based programming.
In an interview with the Wall Street Journal on Wedesday, Zaslav said he was encouraged by the idea of offering consumers Discovery Plus after attending a lunch meeting with fellow media executive Barry Diller.
“I told him Discovery could own nonfiction programming and be an essential streaming service — about the only one that could have a chance at competing with Netflix profitably,” Zaslav told Journal reporter Ben Mullin in an email.
But media analyst Michael Nathanon says if Discovery isn’t careful, they risk jeopardizing their lucrative cable and satellite TV deals.
“The question people will have is, is there a risk of cannibalization of the channels when Discovery’s distributor deals are up?” Nathason questioned.
Discovery Plus will launch in early January 2021.