Discovery Eyes Direct OTT Offering, Legacy TV Firms Lock In Streaming Strategies

Slowly but surely, legacy TV companies are embracing the idea of going direct-to-consumer with over-the-top streaming video products. 

The latest potential entrant? The newly renamed Discovery Inc., formed when Discovery Communications and Scripps Networks Interactive completed their merger this week. 

In an interview with The Wall Street Journal, Discovery CEO David Zaslav teased the possibility, citing the company’s combined library of owned IP. Zaslav said a service featuring content from Discovery, Scripps and potentially others could be priced at between six and eight dollars.

A Discovery OTT service would enter a field that is becoming more crowded by the month. Later this year, Viacom will launch a direct-to-consumer OTT offering, also built around library content. Viacom CEO Bob Bakish, speaking at a conference last week, said his company’s OTT service would  “complement what we are doing in the MVPD space” rather than compete with it.



So far most of the OTT offerings in the works from traditional TV players are designed to complement, rather than disrupt, their cable bundles. After all, OTT may be the future, but the revenue from cable and satellite TV is in the present.

AMC offers a horror-themed OTT service called Shudder that combines library content with some original programming, as well as a streaming service that features on-demand content from the main AMC channel, but commercial-free. That service, however, AMC Premiere, is only available to existing cable subscribers. FX offers a similar product with FX+.

Even the most aggressive players in the OTT space are betting on the services being additive. CBS All Access features a live stream of the broadcast network, as well as library content and originals, but CBC COO Joe Ianniello said at a conference this week that it was really designed for “super fans,” many of whom may already pay for TV.

Disney, meanwhile, will launch a Disney-branded entertainment OTT service in 2019, and is gearing up to launch ESPN+, a sports streaming service. in the coming months. The service, which will be incorporated into ESPN’s existing apps and website, will not feature any live sports that appear on TV.

Disney CEO Bob Iger told investors last month that the service would be “incremental” to the traditional bundle.

Nonetheless, he also floated the possibility of the service becoming something more in time.

“Over time, our intention would be for that app to be the app that people experience ESPN on,” Iger said, “but we’re going to manage the migration of that very carefully because right now we have a business — the multichannel video business — that is serving our company quite well.”

The library approach, as Viacom and Discovery are planning, may be the type of product that walks that fine line. These products could launch with a content firehose to rival digital competitors like Hulu.

And if the time does come to pull the plug on the legacy bundled model, those services could be the gateway to the next generation of consumers.

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