Discovery has a long history of supplying popular networks to linear TV distributors but now the company must factor in Discovery+, its new all-encompassing streaming service.
CFO Gunnar Wiedenfels spoke on the subject today at a Deutsche Bank investor conference and said his company should still be able to find common ground and win-win partnerships with distributors. However, he admitted that there will be some “reallocation of values” between Discovery’s different products.
“Clearly there is one big, new variable that’s in the mix now, so all of these discussions are one notch more complex than they used to be. But as we’ve said so many times, in the affiliate space, none of these deals have ever been super straightforward renewals,” said Wiedenfels. “But I feel very good about it and our partners are very excited. The ones we’ve partnered with for the Discovery+ rollout so far are very, very happy with the product.”
RELATED: Altice USA, Discovery reach new distribution agreement
Discovery recently reached a new distribution agreement with Altice USA for carriage of its cable networks. However, Dish Network Chairman Charlie Ergen, during his company’s most-recent earnings call, signaled some skepticism around continuing to pay for Discovery’s channels.
“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.
Discovery has set distribution deals for its new streaming service with several partners including Vodafone in Europe and Verizon in the U.S. Wiedenfels said the Verizon deal – which provides many of the operator’s customers with extended free trials of Discovery+ — has been a “great helper” with getting the streaming service out of the gate after its Jan. 4 launch in the U.S.
Beyond Verizon, Discovery said it looking into partnerships within different parts of the ecosystem including traditional cable operators, connected TV devices and manufacturers.
“We’re continuing to work on additional partnerships. We’re actually pretty close to finalizing two key deals, so stay tuned. Partnerships are super important to get [Discovery+] to scale quickly,” he said.
Discovery said it anticipated hitting 12 million paid subscribers by the end of February. Last month, Discovery CEO David Zaslav said that most of the 7 million direct-to-consumer streaming subscribers that Discovery added since the end of the third quarter were Discovery+ customers in the U.S.