Discovery Inc is launching a global subscription video-on-demand (SVoD) factual service later this year powered by a ten-year agreement with the BBC to access library and new programming from BBC Studios.
In every country except for the UK, Ireland and China. Discovery will be the ‘exclusive global home’ of BBC factual content on SVoD, including Planet Earth, Blue Planet and Life. The new service will have rights to the BBC series ‘following their linear transmission’, implying that BBC Studios will continue to sell its factual output to traditional channels around the world.
Discovery and BBC Studios will also jointly develop new landmark factual content for Discovery, co-funding a dedicated team within BBC Studios.
No details of the service name or pricing were announced.
As part of the same agreement, announced today, Discovery and the BBC will no longer jointly operate UKTV, with the US company taking over UKTV’s three factual channel brands.
BBC Studios will acquire seven of UKTV’s channel brands, the UKTV digital player and the UK TV brand. Discovery will take over the three remaining channels – Good Food, Home and Really, adding them to its portfolio of 16 channels.
The UKTV deal is expected to be completed in spring 2019. BBC Studios will pay £175 million ($230 million) to Discovery and will assume £70 million in debt. The US company will also receive additional funds of at least £10 million from the UKTV balance sheet.
Discovery took over a 50% stake in UKTV when it acquired Scripps last year. The BBC has always had a commercial partner in the venture (previously it was cable company Virgin Media), and will therefore take full control for the first time.
The two groups previously co-produced high end factual programming and operated channels together, but ended this relationship in 2013.
The new SVoD service continues the US cable programmer’s strategy of launching online services in partnership. It already operates GOLFTV with the US PGA Tour and is in partnership with ProSiebenSat1 in German streaming venture 7TV.
With major media US media groups Disney, Warner Media and NBC Universal all planning direct-to-consumer launches this year and next, there is no surprise that Discovery Inc is planning to launch a factual online service by the end of the year.
In securing exclusive rights to BBC factual programming (the release refers to science and technology, adventure and exploration, history, space, animals and more') for ten years, Discovery has added a powerful source of programming to its own output. The acquisition of National Geographic by Disney - completed this month - may also have concentrated the minds of the Maryland-based cable programmer.
The move is consistent with Discovery's strategy of launching vertical online services based around specific content - Eurosport Player and GOLF TV - and if any company is likely to make a success of a factual SVoD service, it is Discovery, with the Scripps acquisition added lifestyle channel brands like Food Network and Travel Channel to its portfolio last year.
It is significant that, despite collaborating on productions and channels for the best part of two decades, Discovery and the BBC will not be in partnership (expect for the co-development deal for new flagship series). The BBC will pay well north of $200 million to buy Discovery out of UKTV, which is the second largest pay TV channel venture in the Corporation's home market after Sky. Discovery will take over the three lifestyle brands, with the BBC gaining full control of the entertainment channels.
UKTV is important to the channels business of the BBC's commercial subsidiary BBC Studios, contributing just under 50% of its £330.6 million in revenue for its Branded Services unit in the last financial year. It is also significant that the BBC will now wholly own the online UKTV Play as well as the channel brands, as the corporation plans to launch BritBox in partnership with ITV later this year. Full ownership should give the BBC a wider range of options about what to do with UKTV Play, which is currently a free-to-view service.