Discovery CEO David Zaslav explains why he built his company's new streaming video service to complement Netflix, Disney+

Published Mon, Dec 7 202012:20 PM ESTUpdated Mon, Dec 7 20201:36 PM EST

Key Points

Discovery CEO David Zaslav explains the strategy behind Discovery+, his company's new streaming video service.
Discovery+ will launch on Jan. 4, 2021.
Zaslav told CNBC the next 12 to 24 months will determine the winners and losers in streaming. He expects the losers to consolidate.

A View from the Top is a Q & A series exclusively available on CNBC Pro . Alex Sherman will regularly speak with a business leader about decision-making, investing and industry news. It's David Zaslav's moment to shine. The Discovery Communications CEO officially launched Discovery+ last week, his company's flagship streaming service. For $4.99 per month ($6.99 without ads), consumers will get 55,000 episodes from more than 2,500 shows that have historically appeared on networks including HGTV, Food Network, Cooking Channel and TLC. The subscription service also includes a slate of 50 new original series. Similar to Disney+'s launch, Verizon will give 12 months of the ad-free Discovery+ plan away for free to many of its wireless subscribers. During a Dec. 2 remote presentation of the service, Zaslav said Discovery+ was the most "clear and distinct" subscription streaming product, given its complete focus on unscripted series. He explained why the next 12 to 24 months will isolate the winners from the losers in the so-called "streaming wars," and told CNBC why he didn't give subscriber goals for how many people he expected to subscribe to Discovery+. Here's the full Q & A: (This interview has been lightly edited for length and clarity.) Alex Sherman, CNBC: First, I've got to ask you about the outfit you were wearing on stage at the Discovery+ presentation. Was that turtleneck an homage to Steve Jobs? Discovery CEO David Zaslav: No. After nine months of quarantine, a dark turtleneck hides a lot of sins. I hear that. So, talk to me about the timing of this launch. Because you're obviously doing this later than Disney, HBO Max, Peacock...Did you go through a period where you wondered if launching a streaming service makes sense for Discovery? Is that why you guys were on the later end of things? Did you think, 'maybe we don't have enough content, maybe there are already too many streaming services for us to compete?' We never looked at it that way. We see in the entertainment package that 40% to 45% of what people consume is scripted series and scripted movies. It's the sexiest stuff. You have the openings and the red carpet and Jennifer Aniston and Brad Pitt and everybody gets excited and "The Crown," but ultimately, on a day to day basis, 60% of the content that people consume is our stuff. So we've always felt that there's five, six, seven players fighting over there. We've always said we're one of one. But we really need to own the space. We need to be methodical about it. We also learned from being in this business for a long time, we want to launch with partners. We can't launch alone. We want our narrative, but then we want another major marketing partner to be out promoting us side by side, to be giving us to their customers so that they believe that carrying us is going to help them with subscriber acquisition or churn. So we took the last year. We're announcing today 50 original shows. We're going to have over 1,000 hours of original content on this platform. Chip and Joanna Gaines: We think that they're an extraordinary talent and unique. We've got the whole BBC library. And then we said, is there anything else that we need? So we pulled in the best of A & E, Lifetime and and History. We now think we have an extremely broad, complete, robust non-fiction entertainment service. We think we're just in time, because Disney and Netflix have done the hard work. They've gone out and explained to people, here's how you buy a product. Here's how you get it on your phone. Here's how you move it around. People have gotten much more acclimated to buying content and consuming it. When we hit in January, we have a huge population that knows how to consume content. The final thing is that during this pandemic, people have been consuming a massive amount of content. And so, the big question that I get all the time from my family and friends is, hey, what are you watching on Disney+? What are you watching on Netflix or HBO? What should I watch? I've seen everything. So I think we may really get lucky here because we're going to come to the market with a library bigger than Netflix or the same size, fresh. All these original series, fresh. All this exclusive content, fresh. And I think for people who unfortunately are still going to be hunkered down a little bit for a few months, they're going to be saying, wow, this goes with everything I have. And it's all new, just loads of stuff. Was it a more difficult decision for you to make a product outside the cable bundle? Because you've got a bunch of unscripted networks with cheaper production, largely speaking. You've