Discovery+ First-Year Subscribers Could Hit 7 To 10 Million: Analyst Estimates

Discovery’s new streaming service discovery+ could hit seven million to 10 million subscribers in its first year of operation, according to industry estimates.

Macquarie Research that for 2021 the service could “suggest an assumption of 10 million subscribers” -- with many coming from a Verizon distribution deal that will give its existing and new wireless and broadband customer anywhere from six months to a year of free access.

Verizon has 55 million wireless and broadband subscribers.

Macquarie estimates discovery+ could see $600 million in annual revenue in its first year, with expenses and costs amounting to $1 billion for content, technology and marketing expenses. “The latter of which will be aggressive, but targeted.”

The question is whether discovery+ can compete with the other major media company streaming services.

MoffettNathanson Research writes that the deal with Verizon “could lead to as much as seven million promotional subscribers for discovery+ [which] could prove aggressive compared to the powerful I.P. within Disney+.”

Like Disney+, Discovery inked a promotional distribution deal with Verizon. Disney+ was estimated to have had anywhere from 10 million to 12 million in initial subscribers signups when it started a year ago.

MoffettNathanson writes: ‘We believe Discovery appears to have struck a similar business model as Disney did where Verizon is paying Discovery on a per subscriber basis with a discount off rate card that keeps the wholesale price above the effective MVPD bundled rate.”

Launched this week, discovery+ is priced at $4.99 for its ad-supported service (featuring light advertising loads), and $6.99 for its ad-free option.
Discovery also said it had other distribution deals in the works. Analysts presume this will be with Roku and Amazon Fire TV.

Discovery did not offer its own subscriber estimates at launch, in contrast to what Walt Disney did when it started Disney+.

But the company did project a potential total available, addressable market (TAM) of 70 million U.S. TV households and 400 million internationally, plus 6 billion mobile devices.



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