1. 10 Reasons Why Discovery+ Is A Winner
Discovery launched its Discovery+ Flix on Thursday, bringing the grand total of Flixes up to eight. (Paramount+ will make it nine.)
The app will have both original and library programming from all of Discovery’s buckets (science and nature, home improvement, documentaries, cooking, reality) along with content from the A+E stable (A+E, History, Lifetime), which makes a lot of sense given the overlap and likely inability of most viewers to distinguish programs on A+E from programs on Discovery.
The new service will launch on January 4th and cost $4.99 for the ad-lite version and $6.99 for the ad-free version.
Why It Matters
Discovery is in a very good position with its Flix. Allow me to list 10 reasons why.
- Their programming is unique. While other Flixes have some non-fiction programming, they are still mostly about comedies and dramas. Discovery is all non-fiction. So when a family is deciding which Flixes to subscribe to, it’s easy to see them adding Discovery+ to the mix as it gives them access to genres they’ll have a hard time finding in such massive abundance elsewhere.
- They own almost all of their programming. Meaning they don’t need to try and buy it from someone else or hope that the studio who made it will license it to them for a usurious sum of money.
- They will have a seriously deep library. Because they own their programming, they have rights to all seasons of it, which gives them a very deep library at launch, over 55,000 episodes. That’s going to look very enticing to subscribers, especially for $5 a month.
- They have a strong international presence. Discovery has been building up their international presence for decades. Their science and nature programming is easily translated–put a Romanian narrator on a documentary about sea horses and suddenly it doesn’t seem like an American show. And they’ve struck deals with many local programmers to further embed themselves. Which means they have strong name recognition outside the US, something many of their competitors will struggle with.
- They have European rights to the 2021 Olympics. That alone is going to get them millions of subscribers this summer. They also have lots of other sports rights through their Eurosport acquisition, so the European market should be very strong for them.
- They have many well known personalities whose personal brands extend into retail. While the stars of many broadcast network hits may have limited name recognition in the general public and rarely have their own line of products, Discovery stars like Chip and Joanna Gaines, Giada De Laurentiis and Bobby Flay all do. That alone will help create additional buzz for the app and draw in viewers.
- $4.99 is about one-third the price of Netflix and HBO. It’s pocket change to most people, and that makes it easy for people to subscribe even if their goal is to have a reliable source of background noise entertainment.
- The deal with Verizon gets them millions of subs right out of the gate. Millions of Verizon subscribers will get some form of free subscription to Discovery+, either a full year or a half year. That ensures lots of subscribers to start, and at $5/month, it’s easy to see many of those subscribers not bothering to unsubscribe when the year is up.
- It translates easily to mobile devices. While mobile viewing of long-form TV programming hasn’t really caught on in the US, Discovery’s programming, especially the real estate, reality and food shows would seem to be ideally suited for mobile viewing, as they can easily be watched in quick bites and paused without losing the plot line.
- Discovery has been smart about using data to drive their digital ad products. That puts them a step or two ahead of most of their rivals and it’s fair to assume that the advertising program for Plus will be as well thought out as it sounded during the initial sale pitch.
The only possible storm cloud is that Discovery has yet to ink deals with Roku and Amazon, though they are said to be “working on them.” Not having those deals hampered Peacock and HBO Max at launch and if Discovery falls into the same trap, it could hurt their ability to attract subscribers.
What You Need To Do About It
If you’re a pay TV operator, this gives your users yet another reason to cut the cord, so it may be best to avoid dick moves like imposing a data cap on all your users and hiking up the price of hidden fees.
If you’re Amazon and Roku, don’t get greedy when negotiating your carriage deals. It’s only a matter of time before consumers turn on you, and/or realize that the interfaces on their smart TVs have vastly improved over the past few years and they don’t need streaming sticks anymore.
If you’re thinking of cutting the cord (or have already done so) and the thought of starting yet another Important series that requires your full powers of concentration is giving you agita, Discovery+ is a nice alternative.
2. Warner To Show All 2021 Movies On Max
Last week Warner announced that it was going to release its upcoming blockbuster “Wonder Woman 1984” on HBO Max the same day it opened in theaters. And that subscribers would not have to pay any additional money to watch it.
This week they announced that they would be doing this with all their first run movies in 2021 which effectively does away with the windowing system (temporarily, at least) where theaters have exclusive rights to first run movies when they open.
Why It Matters
Warner and other studios have long wanted to either shorten or eliminate windows as they don’t believe that showing movies on streaming will devastate box office the way the theater chains do. But since theater chains accounted for a high percentage of the studios’ revenue, there was no advantage to antagonizing them.
Given that many (if not most) movie theaters in the US are now closed until this summer or possibly even this fall, there was no reason for Warner not to press its advantage: with theaters shut, there’s not much owners can do about it anyway, and who knows what state they will all be in once the pandemic is over, or how long it will take before moviegoers feel good about going back into theaters en masse. Especially the crowded, rarely-cleaned ones with crowds that talk during the entire movie.
There was clearly another reason Warner made this move, especially the part about not charging extra for originals the way Disney does: they need to drive subscriptions to HBO Max, as the streaming service has been having serious trouble signing people up.
Max is a tough sell overall. Basically, they’ve got to convince the people who are not currently HBO subscribers that “we’re nothing like that HBO you didn’t want to subscribe to” while reassuring millions of current subscribers that “we’re exactly like that HBO you were subscribing to.” And then convince them to pay an industry high $15/month.
So there’s that and the notion that the ability to watch a first run movie for free each month is probably worth more than $15 to most potential subs, so why wouldn’t they sign up and stay signed up, at least for 2021.
The final piece here is that HBO still needs a deal with Roku and this might put pressure on Roku to reach an agreement. Or not. Roku could easily take the tack that “if you want people to be able to watch your movies, you need us more than we need you.”
So there’s that too and it will be interesting to see how it plays out.
What You Need To Do About It
If you’re Ann Sarnoff and the team at Warner, well played. This was a smart move, got you an incredible amount of buzz (front page in the WSJ) and should really help to both boost subscriber numbers for Max and create even more buzz for the Warner movie catalog.
If you’re a theater chain owner, maybe read up on why it was so easy for Uber to disrupt the taxi industry. Hint: customer service matters. I also suspect you’ll find that same day releases on streaming don’t hurt your box office and may even boost them as it creates more buzz for the movie.
If you are someone who watches the industry, keep an eye on what happens in fall of 2021 when things will (hopefully) be back to normal and movies will be opening in theaters and on Max simultaneously.