Building on its over-the top offerings in Europe, Discovery Communications CEO David Zaslav told analysts Tuesday that the offering could eventually make its way to the U.S.
Discovery has offered two direct-to-consumer OTT products in Europe for the past 18 months – its Eurosport App and DPlay, its European streaming service launched in June. On a conference call with analysts to discuss third-quarter results, Zaslav said that Discovery has about 200,000 customers to the OTT services, with an eye toward attracting more than one million customers to the offerings.
“If we can get to a million [subscribers] at $6 to $8 a month, we could generate close to $100 million in revenue, which I think gets our whole company's attention in terms of culture,” Zaslav said on the conference call.
He added that so far, the OTT product hasn’t cannibalized the linear channels in Europe. On the call Zaslav said that customers tend to watch the OTT service out of the home and switch to the linear channels inside the home.
“In fact, the linear channel grew more than 15% in the last quarter,” Zaslav said.
He noted that Discovery has managed to keep its costs in check in Europe – its most recent rights deals have not been for expensive marquee sports with 60%-to-80% increases but rather for niche sports with mid-single digit percentage increases.
“We have a lot of optionality,” Zaslav said. "It’s early days, but we have a lot of flexibility to make a move in the U.S. if we want to and we’re looking at it.”
