Discovery Communications joined a handful of other cable programmers in Philo’s new skinny, nonsports streaming bundle this week, and the company said that more similar services may follow.
Discovery CFO Gunnar Wiedenfels told the audience at a Wells Fargo investor conference that Discovery continues to talk to all the players in the virtual MVPD market as well as established traditional MVPDs, and that over time he expects even more new streaming packages will emerge to satisfy consumer demand.
He pointed toward the announcement of Philo—a $16-per-month streaming bundle that includes channels from Discovery, AMC, A+E, Viacom and Scripps—and said it’s the first truly skinny bundle.
“There is an unserved segment and I think we’re now in the process of addressing that segment and time will tell how big it actually is. For us, it’s very important. We’ll continue our strategy and secure as much distribution as possible to reach as many people as possible,” Wiedenfels said.
Wiedenfels said that Discovery and Scripps combined command 20% of viewership and that among both cord-nevers and cord-cutters there’s a “high willingness to pay” for Discovery’s and Scripps’ networks.
“There’s a real demand for our content and over time, the offerings will have to follow that demand. We’re in talks with most of the players and it will just take some time,” Wiedenfels said.
While Discovery has found its way into streaming services like DirecTV Now, the company’s networks have been left out of similar services including Sling TV, Hulu and YouTube TV. As those services continue to emerge as traditional distributors continue to lose subscribers, concerns have mounted about the future of distribution and affiliate revenues or cable programmers.
“It’s not a hypergrowth environment, no question about it,” Wiendenfels said, acknowledging those concerns. But he said Discovery was able to secure high-digit price increases during its last renewal cycle and that his company continues to guide toward mid-single-digit distribution revenue growth for the rest of the year.