Most upstart streaming services long to be the next Netflix, whether they admit it publicly or not. But for Discovery’s new OTT platform, which will debut on Jan. 4, the company is targeting a different streamer’s playbook instead: Disney+.
In a virtual presentation to investors Wednesday, Discovery’s planned international streaming strategy makes good on the adage that imitation is the sincerest form of flattery. Discovery+’s rollout plans are closely and consciously following in the footsteps of Disney+, which debuted almost exactly a year ago and, with more than 73 million subscribers, has become the biggest success story by far among media companies charting out new streaming businesses.
Even putting aside the similar names—adding “plus” has fast become shorthand for streamers—Discovery+ is looking to emulate Disney+ in distribution, interface, original programming offerings and price. Discovery president and CEO David Zaslav made no bones about wanting to emulate Disney’s successful streaming strategy in Wednesday’s call, during which he mentioned the rival platform several times.
Consider Discovery’s distribution plan, which aims to scale fast with an international approach. On the U.S. side, Discovery has inked a partnership with Verizon, which will extend a free year of Discovery+ to Verizon 5G Home Internet and Fios Gigabit Connection customers, and between three and six free months of the service to new Fios customers.
That deal was directly inspired by Disney’s own partnership with Verizon, which extended a free year of the service to millions of customers ahead of Disney+’s November 2019 debut.
“What we’ve learned, and Disney learned it very effectively with Verizon … [is] that having a partner that uses quality content to enhance and de-commoditize their platform is really, really effective in terms of scale,” Zaslav said.
Discovery’s deal with Verizon, which will also include an integration with Verizon’s own marketing materials, could prove to be lucrative for early Discovery+ sign-ups. About 21 million Verizon Wireless accounts are eligible to receive the Discovery+ promotion, with about 80% qualifying for the six-month trial and around 4 million accounts eligible for the free year, according to research firm MoffettNathanson.
If eligible Verizon customers opt for the free trial at the same rate at Disney+, which MoffettNathanson estimated to be around 30%, that could bring in as many as 7 million promotional subscribers to the new service.
The distribution deals won’t stop with Verizon. The lifestyle programming giant is also looking to strike similar arrangements in other international markets where Discovery+ will debut on Day 1 to get even further penetration with discounted offers. “You should expect there will be multiple deals like this that you’ll be hearing about from us in the weeks ahead,” Zaslav said.
Discovery+ may look familiar
Discovery+’s similarities to Disney+ will also be evident within the service’s user interface and programming organization. The streamer is taking a house-of-brands approach within its service, with standalone verticals highlighting the company’s cable brands like HGTV and TLC.
Breaking up programming into content buckets is an increasingly common approach that will also be on display in many different streamers, including ViacomCBS’s soon-to-be-rebranded CBS All Access and WarnerMedia’s HBO Max, but Zaslav made it clear: It’s Disney that did it best.
“If you think about Disney’s product, they’ve done a wonderful job,” Zaslav told investors. “Every time you see Disney+ you see five brands or portals, and from a curation perspective it tells people, ‘I love Disney Family’ or ‘I love Marvel,’ and they want to go there.”