Discovery Prepares for 'Company-vs.-Company Combat' as Discovery+ Debuts

The new year is just a few days old, but Discovery Inc. is starting off 2021 with a bang. The company is shaking up the streaming space with its new platform, Discovery+, which launches today. Discovery+ is debuting in the U.S. at two price points: an ad-supported tier for $4.99 a month, with five minutes of ads per hour, and an ad-free tier that will cost $6.99 a month. And while Discovery might be the last major media company to the party, debuting its steaming service long after offerings like HBO Max and Peacock rolled out in the past year, executives are confident about the platform’s ability to take on its rivals, specifically, Disney, WarnerMedia, NBCUniversal and ViacomCBS. “I see this as company-vs.-company combat,” Jon Steinlauf, Discovery’s chief U.S. advertising sales officer, said. “I see ourselves being able to compete at all levels.” As the “company apps” face off—WarnerMedia’s HBO Max, ViacomCBS’ CBS All Access (which will soon rebrand as Paramount+), Disney’s Disney+, NBCUniversal’s Peacock and Discovery+—“it's like 35 years of Discovery against 35 years of NBCUniversal, against 35 years of ViacomCBS, against 35 years of Disney,” Steinlauf said. Making up for a late start Discovery likes how Discovery+ library stacks up: out of the gate, the streamer has more than 55,000 episodes and 2,500 current and library shows across Discovery’s portfolio of unscripted programming, including library series from Animal Planet, BBC, Discovery Channel, Food Network, History Channel, HGTV, Lifetime and TLC. It is also debuting with 50 original unscripted programs, featuring Discovery stars like Chip and Joanna Gaines (whose Magnolia Network for the company is still on hold due to the pandemic) and chefs Bobby Flay and Giada de Laurentiis “We're starting with probably more content—and more original content—on the streaming service than anybody ever had at launch,” said Steinlauf. Meanwhile, Discovery’s streaming rivals are “playing in a different place,” Discovery chairman and CEO David Zaslav told investors last month. “Almost all of them are led by the same consumer proposition: scripted series and scripted movies. We are different. We are convinced Discovery+ will stand out.” Taking a page out of the Disney+ playbook Because of Discovery’s content model, in which the company owns its entire library and hasn’t licensed it to competing streaming platforms, “we don't have to cannibalize linear to be able to build streaming,” said Steinlauf. “We think we can do a better job managing both the linear business and the streaming business.” Unlike other streaming rivals, Discovery+ isn’t setting out to be the next Netflix. It’s targeting Disney+ instead, mirroring that platform’s distribution deals, price point and house-of-brands approach that brought Disney+ nearly 87 million subscribers in its first year. An essential component of Discovery’s efforts to mirror Disney+’s launch: The company has inked a lucrative deal with Verizon to offer Verizon 5G Home Internet and Fios Gigabit Connection customers a free year of Discovery+, and between three and six free months of the service to new Fios customers. “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 last month. Plus, while other streamers, aside from Disney+, have been slow to expand globally, Discovery+ is debuting globally in 25 countries, and has already rolled out in the U.K., Ireland and India. Zaslav told investors that immediate global availability will give Discovery+ a “running start” that will help it scale fast. On the advertising side, Lowe’s, PepsiCo, Toyota, Boston Beer Co. and KraftHeinz have all signed on as inaugural advertising partners for Discovery’s “ad-light” tier. And as opposed to NBCUniversal’s Peacock, Discovery isn’t limiting the number of brands that can participate in Discovery+’s launch. On Discovery’s linear networks, “we’ve always believed in trying to accommodate as many advertisers as possible, and that’s the approach we’re going to take” with Discovery+, Steinlauf said.