WBD Grants Discovery+ A Reprieve, Sling Goes FAST

1. WBD Grants Discovery+ A Reprieve

As per the Wall Street Journal, it appears that WBD will not be shutting down its Discovery+ SVOD app after all.

Rather, they will roll out a new Max that combines Discovery+ and HBO Max content that is likely to keep the current $15/$10 price point, while also maintaining the standalone Discovery+ app with its $5/$7 ad-supported/ad-free price point.

This is not all that surprising in that there are currently around 20 million Discovery+ subscribers. It’s unclear how many of them would upgrade to the higher-priced product and how much overlap there is between current Discovery+ and Max subs.

My guess is that the answers to those two questions are “not many” and “not much” which is why WBD’s (alleged) move makes a lot of sense.

Why It Matters

Discovery+ viewers have had around 25 years to decide whether they like HBO in its current incarnation, whether the types of shows the network has on offer are the types of shows they want to watch. 

I mean it’s not like people are sort of wishy-washy on HBO. There’s an audience for shows like The White Lotus and Succession and The Atlantic, Vanity Fair and New York Magazine would have far less content without them. But those shows ratings pale in comparison to the less buzzy fare on network TV. Or to paraphrase a recent suggestion for Netflix’s Bela Bejaria, it’s “things people watch versus snobby shit people don’t.” 

Harsh, but it’s not untrue (Mad Men often failed to break 1 million viewers an episode and that was before streaming. Plus, I don’t think I’m going out on a very big limb by saying that the average Discovery+ viewer falls squarely into the former pile.

So there’s that and all the ad revenue that WBD makes from the Discovery+ shows, many of which are bingable (there are linear channels for many of the more popular shows on Discovery+) is worth a lot, as is the goodwill of Discovery+’s loyal viewers.

Which is worth unpacking some too: Discovery has a lot of franchise shows built around personalities like Chip and Joanna Gaines and Guy Fieri. That creates a far more loyal audience, viewers who will watch all of the franchise’s spin offs and variations and then return to watch reruns. In the long run, that is going to be far more valuable, at least in terms of ad revenue, than a six-episode run of The White Lotus every 18 months.

So there’s that too.

From a consumer perspective, there doesn't seem to be much downside. It’s an easy get for consumers as to why there’s a separate Discovery+ app and as per WBD itself, there is precious little overlap between the audiences.

From an advertiser perspective, it gives WBD two different apps and two different audiences to sell against. So if a brand is interested in reaching consumers it is missing on HBO, it may be able to find them on Discovery+ and vice versa. That, and Discovery+ ads have an almost “magazine” like feel to them in the way that they align with the content—cooking shows feature food brands, home shows feature lawn, garden and DIY brands.

That sort of thing.

But it’s the sort of thing that is very valuable to brands and a great selling tool for WBD.

2. Sling Goes FAST

Taking the title of our recent report, FASTs Are The New Cable quite literally, Sling, Dish’s vMVPD has launched a FAST service as well.

The FAST, which is available via the existing Sling app (no credit card or email required) features 210 channels and 41,000 on-demand titles, mostly from major networks plus national news from ABC and CBS. So pretty much a full aggregator spectrum.

It’s the first FAST from a vMPVD, sort of fitting given that Sling was the first vMVPD period, and it’s not only a very smart idea, it’s also likely a harbinger of things to come.

Here’s why.

Why It Matters
Sling has created a flywheel for themselves. It’s a way to keep viewers in the ecosystem if they decide to unsubscribe. And truth is many of them will unsubscribe and resubscribe in order to watch, say, NFL football. By keeping them in the ecosystem, Sling is (a) increasing the odds they will re-up with Sling rather than YouTube or Hulu the next time NFL season comes up, and (b) keeping them in the pool for advertisers, who are looking for scale.

And Sling will have all sorts of data around their former subscribers that they won’t have around new ones.

There’s also the reality that while vMPVDs are having a moment right now, that moment is not likely to last forever, as viewing (and cable networks) shifts to streaming. Not to mention the fact that Sling has been eclipsed by Hulu and YouTube with their larger and costlier packages.

What You Need To Do About It

If you are Dish, well done. You now have a trifecta: a cable TV service, a vMVPD and a FAST. All of which can work to flywheel each other and to keep people within the greater Dish ecosystem. (It also gives you a bigger pool of viewers along with all the data about those viewers.)

If you’re DIrecTV, this is a good plan for you as well, given that you are in a similar situation. Ditto Fubo TV, for whom a FAST could be a huge plus in terms of creating awareness. (Hulu Live TV and YouTube TV have their own issues that would preclude a FAST.)

If you’ve been reading our FASTs Are The New Cable series, this is a brand new category. Dish is an MVPD, so they don’t own their own programming like the media companies, nor do they own the device, the way the OEMs do. In many ways they are similar to independents like Crackle and Plex. Let’s see what it looks like when it rolls out before giving it a definitive categorization.