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Discovery CFO Gunnar Wiedenfels at an investor conference in Barcelona, Spain, on Thursday expanded on CEO David Zaslav’s recent comments that the TV giant could launch a U.S. streaming service aggregating all its programming.
Zaslav had said on the firm’s earnings conference call that Discovery was “starting to explore a new opportunity” in the U.S. that would bring together its content. “We have hundreds of thousands of hours that people grew up on. … We are looking now at whether we should just aggregate … all of our content in the U.S. and having something that looks very different, is very deep, has great personalities, great brands to curate through,” he said.
Zaslav described the effort as “stepping up” to launch “a full attack” on those who are not pay TV subscribers with the company’s content that he said differentiates the firm from the scripted space, highlighting that Discovery owns and controls all its content globally and adds about 8,000 hours of original programming per year. The exec said the company would make decisions and announcements about such a service in the next several months.
“Clearly, we are running scenarios,” Wiedenfels told the Morgan Stanley European Tech, Media and Telecom Conference in a session that was webcast. He said Discovery has gotten a lot of investor questions about Disney+ and other coming streaming services and their impact on traditional pay TV.
“We are prepared. We now have a platform in place that allows us to very quickly flip the switch and bring new products to the market,” he said. “And one of the scenarios is, could there be a win-win partnership with cable affiliates? … Is there room for a Discovery female-skewing aggregated package, which everyone benefits from” — consumers, distributors and Discovery?
“We continue to view ourselves as a very committed and strong partner to the traditional affiliate ecosystem,” the CFO emphasized. “And that’s the reason why, if you look at our portfolio, a lot of the moves we have made in the direct-to-consumer space [in the U.S.] are more around the fringes of our core brands, Food Network Kitchen being the first one that’s sort of closer to the core, but also with a very different value proposition. It is not a video player. This is an active engagement with a lot of different focus areas like live classes, ingredient delivery, e-commerce for kitchen equipment, etc.”
With U.S. cord-cutting hitting new heights amid weakness at AT&T, Wiedenfels was asked about the state of virtual pay TV services. “On the virtual [distributor] side, I do think we are going to see continued growth,” he told the conference. “Clearly [with] Sony Vue, [it] remains to be seen what happens to those subscribers, but my assumption would be they are going to find a new home elsewhere.”
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