Discovery CEO David Zaslav has said many times that big, expensive channel bundles are hurting the U.S. television market. But he’s seeing change now in what AT&T is doing.
During his company’s earnings call today, Zaslav praised AT&T CEO Randall Stephenson for “courageously” launching AT&T Watch TV, a $15 per month streaming bundle of channel that doesn’t include any live sports. The package is being offered for free to some of AT&T’s unlimited wireless subscribers.
Zaslav said that AT&T Watch TV will start a “significant change” in the television industry and the big broadcast network and sports packages will get “pushed to the side.”
Discovery last year had a hand in launching Philo, a $16 per month streaming bundle with a similar model to what Watch TV is offering. Zaslav didn’t make much mention of Philo while discussing skinny bundles, but last month Discovery was part of a $40 million funding round for the service.
The praise for AT&T arose amid questions about Discovery’s direct-to-consumer strategy, particularly in the U.S. and particularly now that the company is integrating with Scripps, which is acquired earlier this year for $14.6 billion.
Discovery this week hired Peter Faricy as CEO of global direct-to-consumer. Faricy joins the company from Amazon where he helped build the Amazon Marketplace.
In Europe, Discovery’s direct-to-consumer plans are already in motion. The company has established its Eurosport Player as a significant source for live sports. The company recently signed a multiyear rights deal with the PGA to offer golf to its OTT subscribers outside of the U.S.
But in the U.S., Discovery’s direct-to-consumer strategy is a bit harder to pin down.
Zaslav said that he likes Discovery’s “full optionality” for DTC, that comes from owning all its own intellectual property, and said that “droves” of 18- to 25-year-olds watching Discovery on the programmer’s Go platform.
He said Discovery’s networks will be on many more skinny bundles and you’ll see progress in the near-term. He also said that Discovery is being more cautious about holding onto its IP as it plots its DTC strategy.
“One of the things with legacy Discovery is that we’re not syndicating our content, we’re not selling it like we used to because we want to hold onto as much as we can because we think we have something really special,” Zaslav said.