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Discovery ‘Not Developing or Pursuing a Direct-to-Consumer Offering’

But Programmer is ‘Aggressively’ Working on TV Everywhere Agreements 6/26/2013 4:21 PM Eastern

Discovery Communications shot down reports that the programmer is developing a video streaming service that would be available to cable customers for a “very small subscription fee,” but likewise said that it is aggressively working on TV Everywhere services that could be offered to authenticated pay TV customers as part of their video subscription packages.

The idea that Discovery might pursue a TV Everywhere service that tacks on an extra fee for that access stemmed from passages in a new memoir by Discovery chairman and founder John Hendricks titled A Curious Discovery: An Entrepreneur's Story.  In it, he suggested that Discovery fans who also subscribe to cable might be enticed to spend $6 to $8 on a premium streaming video service from the programmer.

Reuters reported Tuesday that Hendricks said in an interview about the book that Discovery would  charge “a very small subscription fee” for such a streaming video service that would be offered to cable subscribers and in partnership with Discovery’s distribution partners. According to the report, Hendricks said Discovery was developing the infrastructure necessary to launch such a service within the next two to five years.

That led to additional speculation elsewhere that Discovery might likewise consider an over-the-top service that could be marketed and sold directly to consumers.  

In a statement issued Wednesday afternoon, Discovery said "confusion and misreporting has arisen over discussions of future cable technologies (to be developed over the next 5-10 years) with current industry discussions regarding TV Everywhere deployment.”

While still short on specifics, Discovery said it intends to follow an already-established model in which pay TV customers would get access to Discovery shows as part of their subscriptions, and dispelled any notion of a standalone OTT subscription offering.

“The company is not developing or pursuing a direct-to-consumer offering. Any discussion or speculation to the contrary is simply inaccurate,” Discovery said. “The company policy is clear: aggressively pursue TV Everywhere agreements that help deploy this critical new platform, reinforce the value proposition of the pay TV ecosystem, and through an authenticated pay wall, give consumers more access and choice."

Discovery has yet to extend TV Everywhere rights in its distribution contracts, and has not announced when it intends to move forward with a TV Everywhere offering.  But the company, which does provide pay TV partners with access to a limited number of VOD titles, has been explicit that it won’t pull the trigger on any TV Everywhere deals until it achieves the right value.

“We haven’t given TV Everywhere rights to anybody. In the deals that we did at the end of last year, we didn't give TV Everywhere rights,” Discovery president and CEO David Zaslav said at the Nomura Global Media Summit in May. “We think TV Everywhere is a very interesting new way for distributors to offer our content. To the extent that Nielsen can measure it on all platforms, it becomes more compelling.”

Zaslav said Discovery is “in discussions with distributors and as soon as we can agree together on the value, then we'll go forward.”

In February during the company’s fourth quarter earnings call, Zaslav said there is a “decent chance we'll do some TV Everywhere deals over the next few months.”

September