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Discovery Thinks SmallDiscovery's decision to disaggregate content into separate, niche vertical apps is working out, according to its CEO, David Zaslav. During the network's earnings call earlier this week, he offered the example of its True Crime Files subscription channel on Amazon. The channel offers content from the Investigation Discovery channel, and is attracting 10,000 subscribers every month, each paying a monthly subscription of $4. Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK) initially launched a single TV Everywhere app called Discovery Go a little over a year ago, combining content from nine different Discovery channels, including Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Velocity, Destination America, American Heroes Channel and Discovery Life. Discovery was a little late entering the multiscreen market with an app, so felt that real estate on devices was limited. The company believed a single, combined app made more sense at the time. It also allowed for users to sample content from newer, less established channels such as Velocity, which wouldn't happen with separate apps for each channel. However, over the course of 2016, the programmer has completely flipped that approach. It has been separating different types of content and giving each channel its own app. The company believes this is a more effective approach, especially since advertising on the Go apps allows the company to charge premium advertising rates. The company expects the Go apps to be contributing 2% of US advertising revenue growth to the company by the end of 2017, and believes this contribution will continue to increase moving forward. Discovery is also finding that its Go apps work better with the valued youth demographic. Viewers between 18-34 average an hour of tune-in time on the apps, compared with 40 minutes on linear channels. Discovery is keen to target more niches, with Zaslav seeing "huge potential" for categories where the programmer has strong brands, citing Investigation Discovery and Turbo Velocity as specific examples. He plans to look for partnerships, such as the one with Amazon, to launch several other niche vertical apps as Discovery explores further opportunities to monetize library content via online and multiscreen distribution. For starters, Discovery has already launched Destination Unknown, based on its Destination America channel, on Amazon. Zaslav also mentioned kids and science as important niches where Discovery has strong assets, which could be monetized via the direct-to-consumer approach. While Discovery's non-fiction content is easily differentiated from HBO or Netflix's services, its strategy does offer some interesting insight for the market as a whole. I believe there can only be two or three real winners in the general interest OTT space; the rest will die out over time. Targeting niches that are not as well served by traditional programmers and OTT providers is a far more practical strategy for new entrants. OTT does offer a real opportunity to aggregate audiences for niche content, often at a global scale, which is impossible for most new content providers and aggregators via pay-TV services. Ironically, Discovery is one of the few companies that has done that, and yet even it sees more growth potential via an SVoD app aimed directly at consumers. Arthouse film service MUBI is a good example; rather than offer mainstream movies and TV shows, it has developed an innovative business model, and targets only a certain type of niche film enthusiast. It has picked up 100,000 subscribers, and is valued at $125 million. That's a lot less than Netflix, but a lot more than Watchever, for example. (See Does Watchever's Demise Highlight a Looming Challenge for OTT?) Being the next Netflix is a long shot; you would almost certainly need to beat not only Netflix, but also Amazon, Hulu, HBO and host of others. However, thinking small -- identifying a niche that is underserved at a global level, and creating a content bundle aimed at that group, offers a far greater chance of success. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
Contentious issues that are likely to fuel lawsuits and angry blogs in the coming year.
Content producers are unhappy with the advertising approach and revenues they are getting on Facebook Watch.
OTT video usage is driving the penetration of various Internet connected devices to help view online streams on the larger TV screen.
Major Hollywood studio to trial 'virtual' movie theaters using head-mounted displays.
Network technology vendor Sandvine has found that piracy isn't only hurting network operator profits – each pirated set-top box is also using up 1TB per month in 'phantom bandwidth.'
On-the-Air Thursdays Digital Audio
ARCHIVED | December 7, 2017, 12pm EST
Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
Special Huawei Video
Huawei Network Transformation Seminar The adoption of virtualization technology and cloud architectures by telecom network operators is now well underway but there is still a long way to go before the transition to an era of Network Functions Cloudification (NFC) is complete. |
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