Why Discovery+ Won’t be Hurt as Late Arrival to the Streaming Wars

Discovery is finally getting on the streaming train, rolling out its own all-in-one service early next year. Are they too late? The non-fiction programming powerhouse is a late comer to the high-stakes streaming after years of opting to dip its toe in the water rather with smaller, niche services like Food Network Kitchen. That’s largely because Discovery, which specializes in non-fiction and unscripted programming, had been much more immune to the erosion of the cable TV bundle. Discovery CEO David Zaslav has taken a more hardline stance against the over-saturation of streaming bundles. But the cable TV bundle, partially driven by the pandemic, has bled customers at a rapid clip. So far this year, the top cable and satellite providers have lost 4.4 million customers, which is identical to the number who cut the cord during the first three quarters of 2019; those providers went on to lose a record 4.9 million customers last year. When Discovery+ launches, it will be the ninth major streaming service and the sixth new one to hit the market within an 18-month span. The streaming wars claimed its first victim when Quibi, the short-form service from Jeffrey Katzenberg, shut down less than eight months after its debut. But unlike Netflix or Disney+, which largely focus on pricey scripted content, Discovery+ is exclusively in the unscripted space. “We believe the service will be a perfect complement to every household streaming portfolio, and it’ll be additive to the market everywhere in the world,” Zaslav said on Wednesday during an investor day to announce the service. “Unlike scripted and movies, our content is a great companion, where people tend to watch us all day while they’re eating lunch while they’re working with their kids on homework when they just want to enjoy great television on the couch.” At the outset, Discovery expects its subscribers to be largely those who already pay for TV and watch their 19 channels (soon to be 20 when Chip and Joanna Gaines’ Magnolia debuts later in 2021). “I really think about it as an evolution,” Lisa Holme, Discovery’s group senior vice president of content and commercial strategy, told TheWrap. “The first wave of originals for Discovery+ will be predominantly focused on serving the network superfans.”

Discovery+ will debut Jan. 4 with 50 series on its first day, including new spinoffs of popular franchises “90 Day Fiancé,” “Gold Rush” and “Say Yes to the Dress.” Discovery+ will also serve as a soft launch for the Gaines’ Magnolia Network, featuring some of the programming that will be on the upcoming cable channel, including a documentary where Chip Gaines trains for a marathon and the premiere episodes of 10 new series. Holme says that initial lineup “may not look that different from what’s on the networks” though it could skew a little younger. “There will be some that goes a little edgier,” Holme said. “For example, some of the ’90 Day’ universe content that will premiere on Discovery+ will be a little bit, ‘You can’t do that on television.’” Another major focus of Discovery+ will be in the documentary space, a genre that has found a big audience on streaming. “We have a real opportunity to serve lovers of documentary films, in our genres in ways that we would never be able to do on networks,” Holme continues. Another way that streaming programming will differ from its cable networks: Genre crossovers. Discovery’s cable networks like Food Network, DIY, Science and HGTV are all thematically separated but Holme says the streaming service will have shows that could plausibly exist on multiple different networks. “We’re working on a show that has Food Network stars, renovating their kitchens,” she gives as one example. “We have a real opportunity to color outside the lines.” Discovery’s TV programming is designed to be binge watched. While that makes its decision to launch a hefty streaming service an obvious next step for the media conglomerate, at the same time it threatens to wean in its own audience off the bundle. After all, why pay for cable to watch a marathon of “Love It or List It” when you can pay $4.99 a month to get the same option on Discovery+? Discovery CFO Gunnar Wiedenfels believes that, if anything, Discovery+ will add more viewers into its ecosystem, not less, taking a bit of a different stance than Holme, who largely believes their first subscribers will be those who already pay for a TV package. “I mean, the most important point here is first and foremost, both domestically and internationally, there’s a large segment of consumers that we currently don’t reach,”  Wiedenfels told analysts. “We believe that the majority of the subscribers we’re getting are going to be incremental to to what we have today.” Holme isn’t too worried about being the reason even more people leave the cable bundle, which is expected even after the pandemic (hopefully) wanes in the back-half of 2021. She says that most people who currently subscribe to TV do so for news and sports. “I’m not sure that we are going to be kind of shifting the behavior away from cable as a as a bundle on our own.” They’re just simply trying to follow where the viewer trends, particularly among younger people, are heading. “That said, the population of cord cutters is growing every month. So we’re really excited to be able to reach them,” she said.