Altice USA, which operates Optimum and Suddenlink, said it reached a new distribution agreement with Discovery, Inc.
The agreement covers networks including Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science, OWN, American Heroes Channel, MotorTrend, Destination America, Discovery Family Channel, Discovery Life Channel, Discovery en Español and Discovery Familia.
It comes at a crucial juncture for Discovery as the company is working to get its new direct-to-consumer streaming service, Discovery+, off to a good start while protecting its traditional linear distribution business.
Discovery reported a 5% increase in domestic distribution revenue for the fourth quarter and said it was primarily driven by traditional linear. Looking ahead to the first quarter, Discovery is expecting high single-digit to low double-digit domestic distribution revenue growth as direct-to-consumer becomes a more meaningful contributor.
“…I'm even more excited about 2021 and the meaningful progress we are making in our strategic pivot, while at the same time, working hard to support our core linear networks business and reinforcing its importance as a critical part of our total consumer offering,” said Discovery CEO David Zaslav, according to a Motley Fool earnings transcript.
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Discovery appears to have maintained a balance between streaming and linear with Altice USA but other pay TV providers seem more skeptical. During Dish Network’s fourth-quarter earnings call, Chairman Charlie Ergen said Discovery+ will affect future negotiations between his company and the programmer.
“A lot of our customers don't watch Discovery. Should we burden every customer with Discovery if they can get it somewhere else? [So, it] has to be a fair rate…and that's just the economics. It's not rocket science,” he said, according to an earnings transcript.
Discovery said most of the Discovery+ subscriber growth – the company added approximately 7 million direct-to-consumer streaming subscribers since the end of the third quarter – so far has come from the U.S. But the company is focused on growing its new streaming product internationally and new agreements with partners like Saudi Telecom should help.
Saudi Telecom said its media business, Intigral, will provide its Jawwy TV subscribers access to Discovery+ content in a branded area and will also offer the full Discovery+ service for 12 months when customers sign up for an a la carte add-on subscription.