At its investor day Wednesday, Discovery claimed its new direct-to-consumer service Discovery Plus would be the only SVOD service focus on non-fiction programming, but analyst Todd Juenger of Sanford C. Bernstein noted that the programmer may have overlooked something--and someone--quite significant.
“They are forgetting CuriosityStream,” Juenger said in a research note.
CuriosityStream was started by someone Discovery and its CEO David Zaslav ought to be familiar with: Discovery founder John Hendricks.
“Listening to Discovery be completely dismissive of CuriosityStream, by omission, we couldn't help but remember the infamous words of the CEO of Time Warner Inc., who once likened Netflix to the Albanian Army ('Is the Albanian Army going to take over the world?')," Juenger said.
In a research note late Wednesday, Juenger noted that many current streaming services provide plenty of non-fiction programming. He ticked off Netflix with Tiger King. Disney Plus with its National Geographic brand. Apple Plus has “a relatively sizable amount of factual programming,” he said, adding “and last but not least there is YouTube, the #1 video service in the world.”
With that much non-scripted content already available, “how many consumers care so much about unscripted/factual that they will sign up to an additional, incremental SVOD service specifically for that purpose,” Juenger asked.
In its presentation, Discovery, unlike many other media companies that have held investor days to roll out their streaming plans, didn’t venture an estimate of how many subscribers Discovery Plus would have even as part of a five-year plan. Or when it might break even.
When Disney provided those numbers, it’s stock jumped.
“Having not provided such guidance, we don't expect the market will capitalize Discovery's DTC similarly,” Juenger said. “If management doesn't have enough confidence to provide a guidance range, then why should the public markets choose their own subs/arpu/revenue expectation and price it into the stock, today? “
Discovery shares did in fact rise 2.51% on Wednesday.
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