Discovery is set to enter the streaming wars in January as the television company behind HGTV, the Oprah Winfrey Network and the broadcaster Eurosport looks to launch itself into a digital future.
The $5 a month service, called Discovery Plus, is part of a second wave of launches following larger entrants into the streaming market dominated by Netflix. Disney a year ago debuted its eponymous streaming service, setting off an industry-wide war as the largest groups in Hollywood and Silicon Valley sought to stake a claim on the future of entertainment.
Following new services from Apple, HBO and NBCUniversal over the past year, smaller players such as Discovery and ViacomCBS are entering the fray despite uncertain prospects for carving out a large audience in the heavily contested market.
David Zaslav, Discovery chief executive, told the Financial Times that the service was “the most important new business” since he joined the company more than a decade ago.
“We’ve been working on this quietly for over two years and watching the marketplace carefully. We think we are right on time,” he said, noting that streaming demand has surged as the coronavirus pandemic has forced people to stay home.
Mr Zaslav faces the challenge of competing in an industry dominated by a few conglomerates following a wave of consolidation in which Disney bought Rupert Murdoch’s prized entertainment assets and AT&T gobbled up Time Warner.
This left Disney with blockbuster brands such as Marvel, X-Men, Star Wars and The Simpsons and AT&T with HBO’s prestige programming alongside popular comedies including Friends and South Park.
Discovery, whose properties include the eponymous cable channel and networks such as TLC and Animal Planet, is much smaller than these groups but has a few crucial advantages.
It has struck a distribution deal in the US with Verizon, the country’s largest telecoms group, to offer Discovery Plus for a year for free to Verizon customers. Disney last year landed a similar agreement with Verizon, which helped it sign up tens of millions of subscribers within days of launching.
Discovery, whose largest individual shareholder is cable billionaire John Malone, also has a bigger reach outside the US than its peers, operating streaming services in markets such as Germany through local broadcast partnerships.
Discovery last month rebranded its DPlay streaming service in the UK as Discovery Plus and has struck a deal to give Sky Q subscribers free access for a year. The group also has full control of Eurosport, the pan-European sports TV network, and has bought the rights to the Olympics on the continent through to 2024.
Mr Zaslav expects sign ups from avid fans of Discovery’s popular cable shows, particularly adult women, a demographic it has dominated thanks to channels such as HGTV and the Food Network.
Discovery Plus will launch in the US with 55,000 episodes of television, including new series from reality franchises such as 90 Day Fiancé and Chip and Joanna Gaines’ Fixer Upper.
Disney has become the big success story among media groups racing into streaming, luring more than 70m subscribers in one year. There have also been failures, notably Quibi, which focused on content for smartphones and shut down only six months after launching.
“Within the media sector, there is Disney and then there is everyone else,” said Michael Nathanson, analyst at MoffettNathanson.
While Disney attracted subscribers with its widely popular franchises, Mr Nathanson said the customer base for a Discovery streaming product is “mostly undefined”.