It was only a
matter of time before the billion-dollar over-the-top (OTT) industry introduced
ad-supported and ad-free subscriptions. I thought Netflix was going to be the
first since they had the foresight to create shows in-house as companies such
as Disney took back their licensing rights and reserved their content for
Disney+. However, Disney+ announced earlier this month their tiered subscription
model. Kareem Daniel, Chairman of Disney Media and Entertainment Distribution
said in a statement: “Expanding access to Disney+ to a boarder audience at a
lower price point is a win for everyone – consumers, advertisers, and our
storytellers…more consumers will be able to access our amazing content.
Advertisers will be able to reach a wider audience, and our storyteller will be
able to share their incredible work with more fans.” This move encouraged other
players such as Netflix to rethink their stance on AVOD. In this article, it
discusses how Discovery will consolidate Discovery+ and HBO Max into one
streaming platform with an ad-supported video on demand tier. This merger will
make Discovery become one of the biggest media companies in the country, adding
roughly 74 million subscribers alone from HBO Max to their respective 22 million
customer base. Both media properties have dabbled in AVOD, so I am interested
to see how Discovery plans to combine the DTC platforms and the results of this
M&A in the coming months. As the industry continues to consolidate, but somehow
the number of my subscriptions continue to expand, it’s exciting to see the
growth and changes to the OTT market. I would buy pay-per-view to see the streaming wars
continue (not really, I don’t need to spend more money…)
“…the Discovery
content I think is going to make for a blowout DTC product, and that should certainly
drive very health revenue growth for years to come.” – Discovery CFO Gunnar Weidenfels.
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