While conceding that the launch of new subscription streaming service Discovery Plus will make negotiations with pay TV operators for Discovery linear networks “a notch more complex,” Gunnar Wiedenfels, CFO for the media conglomerate, insisted that some Discovery affiliate partners are “very, very happy” with the new $4.99-a-month streaming service.
Wiedenfels’ comments Monday at the virtual Deutsche Bank Media, Internet & Telecom Conference came after pointed remarks made last month by Dish Network Chairman Charlie Ergen. “I think Discovery has got great content,” Ergen said during Dish’s Q4 earnings call. “And we've had a long-term relationship with them. But obviously, to the extent that you can get it on a la carte basis, it will affect future negotiations … A lot of our customers don't watch Discovery. Should we burden every customer with Discovery if they can get it somewhere else?”
On the same day Ergen made his remarks, however, Discovery reached a new carriage agreement with cable operator Altice USA.
Wiedenfels added that Discovery has also recently reached carriage agreements with Verizon and Europe’s Vodafone, noting that the former has been a “great helper” in the launch of Discovery Plus. Verizon has been giving the SVOD service away for free to unlimited wireless customers.
Discovery said last month that it had surpassed 11 million subscription streaming customers globally, surpassing analysts’ consensus forecasts. It’s believed that about 5 million of those are new Discovery Plus customers in the U.S., and that Verizon has contributed around 20% of that total.
Meanwhile, asked about his earlier declaration that Discovery Plus will surpass 20% margins, Wiedenfels said he is still “very confident” in that projection.
He also dismissed any notion that Discovery should rethink its pricing strategy for Discovery Plus.
"I think it’s too early to talk about pricing power," adding: "Right now these are the right price points for us."
