Discovery Says Skinny TV Bundles Provide Protection, Growth
- by Wayne Friedman , September 22, 2016
Discovery Communications’ networks says new skinny bundles are not a threat to its business, offering protection from pay TV providers. And long term, its channels are a good deal
for new OTT [over-the-top] providers.Because of diversified long-term deals, Discovery -- with high affiliate increases with traditional pay TV providers -- is in a good position, says David Zaslav, president/CEO of Discovery, speaking at Goldman Sachs Communacopia Conference.
“We have broad protection from every distributor. If Direct TV
offers a skinny bundle, you’ll see our channels on there. If any of the distributors launch bundles you’ll see our stuff on there,” he notes.
In the U.S. pay TV universe, Zaslav says, cord-cutting has accounted for around a 2% reduction in subscribers. No matter, he says -- “the U.S. is growth business.”
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When it comes
to new OTT providers, Discovery can be viewed as economical. New players like Sony can get a great deal by signing Discovery networks to their OTT platforms -- taking either all 14 channels or top 8
channels. For a group of these channels, he says, for the wholesale subscriber fee per month, “we are less than $2,” he says.
Advertising-wise, Discovery still has a way to go.
“We are reasonably cheap; I don’t take great pride in that,” he says. “We were 12% viewership [for all Discovery networks in the U.S.] and getting 5% of the [national advertising] money. We are now 12% to 13% of the viewership getting 6% or 7% of the money. And maybe when we are all finished will be getting 8.5% of the money; we are still under-indexed.”
