Discovery Plans OTT Products in the U.S.

Strategy builds on existing services in Europe
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Discovery Communications said it plans to announce over-the-top products in the U.S. and Latin America later this year.

Speaking on Discovery's earnings call Thursday morning, CEO David Zaslav said the company already has a quarter of a million OTT subscribers for products in Europe paying $8 a month, generating substantial earnings.

Zaslav says the company plans to use what it's learning in Europe to create an OTT strategy in other markets. He said Discovery plans to discuss that strategy with its distribution partners in the U.S. and Latin America.

The Discovery CEO said that more about these products will be released later in the year.

Zaslav said that early OTT products would be aimed at "super fans" and that Oprah Winfrey's OWN and Science Channel might have content consumers would be interested in subscribing to.

But he added that he expected the pay TV ecosystem to be largely unchanged over the next three years. Beyond that, he said, programmers have to be prepared to go direct to the consumer if current distributors haven't figured out how to satisfy consumers.

Discovery also said it expected ad sales growth to be "tepid" during 2015. Discovery domestic ad revenues were down 3% in the fourth quarter, and the company expects a slightly better performance in the first quarter.

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