The Stream Report
Posts
Discovery+ Threatens Philo

Discovery+ Threatens Philo

Discovery+ Threatens Philo's Success

December 29, 2020

The trend toward individual networks offering their own streaming services (and bypassing traditional cable TV packages) is heating up. For 2021, this could spell danger for low-cost cord-cutting service Philo with the launch of the newest of these services, Discovery+. This week, we'll talk more about Discovery+, what if offers, and how it could do major damage to Philo's growth potential.

Streamer's Spotlight: Discovery+ Makes a Play for Philo's Customer Base

The new Discovery+ streaming service launches on January 4. It brings with it over a dozen Discovery, Inc., channels, including the titular network (Discovery Channel), History Channel, Science Channel, HGTV, and Food Network. This is good news for fans of this array of channels, but it could prove to be a thorn in the side of Philo, which relies on those same channels to drive subscriptions.

What Is Discovery+?

Discovery+ is one of the newest multi-channel TV providers hitting the market. Uniquely, it's one of the first (if not the first, in the truest sense) multi-channel providers from a media company providing its own cache of channels instead of purchasing the rights to broadcast other media companies' channels. Launching on January 4, Discovery+ will carry the following channels:

HGTV
Food Network
TLC
ID
OWN
Animal Planet
Discovery
Discovery Originals
Magnolia Network Preview
BBC Planet Earth
A&E
Lifetime
History
Travel Channel
DIY Network
The Dodo

Discovery is selling this service for just $4.99 per month. That's likely an introductory price, so don't count on it being rock-bottom low like that forever.

Discovery+ Market Advantage

Discovery, Inc., is fully cognizant of its market power, hence the launch of its own service with the full allotment of its cable TV networks. History, Investigation Discovery, Discovery Channel, Food Network, and A&E are all in the top 20 for TV viewership. That makes them subscription drivers; people shopping for cable TV packages are going to make their buying decision based on the inclusion of those networks. That makes a low-cost combo package of those channels a very attractive offer, especially to cord-cutters.

Discovery+ Could Hinder Philo

Then there's Philo. The low-cost service costs just $20 per month with over 60 channels in the package. Notably, almost all of the popular networks available on Philo are owned by Discovery, Inc. Many people likely sign up for Philo as a means to access Discovery, Inc. channels without having to pay higher costs for traditional cable or other cord-cutting services.

That being the case, Discovery+ is an absolute threat to Philo. Should it succeed (and it likely will), it could have two outcomes that aren't good for Philo:

1. A mass exodus of Philo subscribers who instead sign up for Discovery+2. A reduced pace of new sign-ups for Philo

Dioscovery+ may also impact other cord-cutting services, like Sling TV and Hulu + Live TV, but the impact will be less there. Those services attract a slightly different crowd. Philo's subscribers care less about sports, local broadcast networks, and cable news networks, which Philo does not offer. Consequently, this is an existential threat that's primarily going to impact Philo over the course of 2021 and beyond.

Is Discovery+ the End of Philo?

That's hard to say. However, there's nothing about the Discovery+ launch that's good for Philo. It's quite possible we'll see an uptick in searches for "how to cancel Philo" in the coming months.