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Discovery offering OTT in US, expands Eurosport

Discovery is to offer “direct to consumer” programming App to its US viewers. Discovery’s president/CEO David Zaslav told analysts: “We have invested over the last year and a half primarily through our Eurosport partnership and in Northern Europe with the Eurosport app and with Dplay. We’re learning a lot. Both of those platforms are growing meaningfully. We do have a target in place which we’re calling March to a Million. We have 200,000 subscribers right now. And if we can get to a million at the $6 to $8 a month, we could generate close to $100 million in revenue.”

Zaslav said the OTT growth was not coming at the expense of conventional viewing.  “In fact the linear channel grew more than 15% in the past quarter. So people are signing up for the U.S. Open and they’re watching maybe a choice of 18 courts. Most of it is when they’re outside the home and then when they’re in the home, they’re watching one of the three Eurosport channels in most cases. So we’re finding that it’s additive.”

He also addressed the prospects for further international expansion. “Right now, we feel very good about the growth characteristics of our International business. We’re growing share. Because we’ve been able to grow share, we feel like we have a real ability and you’re seeing it in our ability to drive price on advertising, and together with Sports in Europe and Kids in Latin America and more scale to drive pricing on distribution and you’ll start to see more of that. Because we’re in 220 countries and we have, on average, 10 channels, we have a fair amount of synergy. And so we’re always looking opportunistically, but we don’t feel like we need to do anything.”

Specifically commenting on Eurosport, Zaslav said that Discovery had discovered that they could grow audiences and ratings without buying big-time football. “The good thing for us is we’ve kind of ducked our heads on that. And because so much economics has gone to soccer and because we’re the only player that can offer a pan-European platform, we’ve been able to sweep in 60-plus deals of very compelling rights, whether it’s speed skating, speed jumping; most of winter sports, summer track and field, more cycling, more tennis at mid-single-digit. And we’re even having discussions with some players that bought soccer that are looking to pick up some extra economics by selling some of these niche sports.”

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