Discovery had lots to crow about after seven weeks of Discovery+, more than doubling subscribers to its new subscription service and older streaming operations since the start of the year.

The company now has 11 million streaming subscribers, and is on pace to have 12 million by the end of the month, CEO and President David Zaslav said in the company’s Q4 earnings call this morning.

Zaslav said the company’s streaming initiatives “already see very positive signals and signs that, taken together with our core business, nicely position the company for sustainable long-term growth. That is our mission and we are laser focused to deliver it.” 

More than half of Discovery+ signups came in the U.S. market, providing an powerful new opportunity for ad-targeting and viewer information that could be lucrative for Discovery and powerful for brands, Zaslav and CFO Gunner Wiedenfels said.

The company plans to produce 1,000 hours of original content for Discovery+, which launched Jan. 4 in the United States and three other English-speaking markets, Zaslav said. Discovery+ launched with 55,000 hours of wholly owned content from the parent company's portfolio of cable networks.

Ambitiously, Discovery also plans to keep producing significant amounts of content for its legacy pay-TV services, which include networks such as HGTV, TLC, ID Network, Food Network and Animal Planet, as well as the flagship network.

“We’re generating meaningful momentum for our strategic pivot as we're working hard to solidify our core business,” Zaslav said.

That's one reason to continue feeding the legacy businesses, but it could be an expensive and difficult-to-sustain plan over the long term. Wiedenfels in particular sounded almost relieved to have a reason to be upbeat about the U.S. market.

“I like the sound of that,” Wiedenfels said. “Candidly, it's been a while since we've had a positive (forecast in the domestic market).”

Paying for it all won't be cheap, though. Discovery will stop share buybacks and other initiatives to return equity to shareholders, said Wiedenfels. The company – which reported $2.89 billion in revenue for the quarter – spent $1 billion on share buybacks and other shareholder returns in 2020.

But even $1 billion and 1,000 hours may not be enough for the long term, given the global reach and deep pockets of its biggest competitors.

In a post last week, analysts at LightShed Partners said all the traditional media companies trying to compete in the high-end streaming space while maintaining their legacy businesses face a "leaky bucket."

Eventually, LightShed's Rich Greenfield, Brandon Ross and Mark Kelley said investors will shift their attention from splashy top-line numbers such as subscriptions and start focusing more important metrics, especially on the bottom line.

“There is no dabbling in streaming and it is a scale game that requires massive investment to attain success,” the LightShed analysts wrote. “Oddly, investors have thus far completely ignored the TAM of each service, the long-term potential ARPU and most importantly, how profitable the services could ultimately be.”

Zaslav and Wiedenfels seemed to somewhat anticipate that concern during their earnings call, though they didn’t detail key metrics such as watch time, churn rates or average revenue per user (ARPU). But spending on original programming will help the service continue to grow.

“With very healthy metrics seen thus far, scaling the Disovery+ subscriber base as quickly as possible is the best use of our capital," Zaslav said. "Our first and foremost priority has been and will always be to reinvest in our business to drive organic growth.”

But Discovery faces some of the same challenges other media companies do, especially compared to the giant legacy-free newcomers such as Netflix, Amazon and Apple.

Already, the LightShed post pointed out, legacy operations in broadcast and cable have suffered dramatic drops in household penetration in the United States, especially in the past year of the pandemic and economic recession.

As more companies put their premium content on their streaming services, that will only hasten the legacy system's decline in both audiences and advertising, according to the LightShed analysts.

“When taken together," LightShed's post says, "these companies do not have a bright future.”

Though the executives didn’t detail key metrics such as watch time, churn rates or average revenue per user (ARPU), Zaslav said “WIth very healthy metrics seen thus far, scaling the Disovery+ subscriber base as quickly as possible is the best use of our capital. Our first and foremost priority has been and will always be to reinvest in our business to drive organic growth.”

The company will focus on building more streaming partnerships with wireless carriers, pay-TV providers and others, as a way to add value and differentiate those offerings and extend the audience reach of Discovery+.