After revolutionizing the linear pay TV space decades ago, Discovery Channel founder John Hendricks is finding inspiration in the Golden Age of Television, when shows were regularly sponsored by big conglomerates like Texaco, to help support the next stage in TV’s development: streaming video.
Hendricks’s latest venture — streaming video service CuriosityStream — is lining up major sponsors to back its lineup of fact-based programming, much the way television shows did in the early days of the medium, sort of a new twist on the old Texaco Star Theater.
“The big news for us is this other model, bringing sponsors who are desperate to get at the missing viewers who are abandoning linear,” Hendricks said. “When [consumers] are watching Netflix or Amazon Prime, they’re outside the advertising universe [and advertisers] can’t reach them. What we’ve tried to do is develop a way that the advertisers can work through us to get to those missing viewers, who are some of the most valuable viewers on television.”
Reaching Young Non-Linear Viewers
Subscription video-on-demand services are gaining with consumers because most young, affluent viewers just don’t watch linear TV any more.
“If you’re a [car maker], you’ve got to get to them,” Hendricks, who founded Discovery Channel in 1982, said. “And your spots just aren’t reaching them on cable.”
CuriosityStream, advised by former CBS and Discovery Communications ad-sales chief Joe Abbruzzese, is securing six major sponsors for its factual documentary/science/nature/innovation programming service. Sprint is first out of the blocks with Sprint Theater, which debuted Aug. 2.
Other advertisers in the automotive, banking and financial services, insurance, energy, aerospace and pharmaceuticals industries are expected to follow before the end of the year.
Each show will be preceded by a “non-skippable” 15-second pre-roll featuring sponsor messages, but the core content will be without commercial interruption.
“What we’ve been working hard on for the last six to eight months is, how would you integrate sponsored revenue in the world of streaming on demand, where the consumer doesn’t want to watch commercials?” Hendricks said in an interview.
“Joe [Abbruzzese] and I made the rounds, at the top levels of agencies, and also going to clients. They’re all just ready for it, because they know they missed the wagon on Netflix. You can’t buy a sponsorship on Netflix.”
With about 120 million subscribers worldwide and 56 million in the U.S., Netflix has drawn the attention of the entire pay TV business. Hendricks has done his homework, too. In a new white paper titled “Undeniable and Unstoppable,” Hendricks estimates Netflix could have as many as 600 million subscribers worldwide in the next 20 years. Globally, he estimates that 1 billion households capable of streaming video will triple to 3 billion by 2038. Global SVOD households will balloon from 250 million in 2018 to 1.5 billion by 2038. “It’s like the old days of cable,” Hendricks told Multichannel News.
“The pipe dream, of course, is that at some point, which I don’t think will happen, is that Netflix may say why can’t there be a presenting sponsor at the next season of The Crown, and AT&T writes a huge check,” Hendricks said, adding that his plan would work best with high-quality, scripted and unscripted fare. Sponsors, he said, are eager to associate with high-quality fact-based programming.
CuriosityStream is now offering a free version on the web — Curiosity Showcase — that Hendricks hopes will whet viewers’ appetites, with 18 program titles and sponsored content.
CuriosityStream plans an ad blitz to promote the service. It is using the same ad agency as its exclusive sponsors to get the word out through broadcast, cable and digital media.
This new relationship also will allow Hendricks and CuriosityStream to lower consumer prices. The SVOD service is currently available for $5.99 per month but Hendricks said the plan is to reduce the cost to the consumer to $19.99 for a yearly subscription or $2.99 per month.
Hendricks’s streaming service is already available as an SVOD product on several traditional pay TV offerings from Comcast, Cox Communications and Dish Network, and less traditional outlets like Sling TV, StarHub in Singapore, Amazon’s Prime Video Channels, Sprint Mobile TV, Apple TV, Samsung, Roku, LG, Sony, Vizio, VRV, YouTube TV and others. The service said more than 9 million unique visitors have sampled its online platform and in excess of 900,000 global consumers are now paying subscribers either directly or through bundled packages offered by distributors.
That’s short of the 2 million to 3 million paying subscribers Hendricks had hoped for when he launched CuriosityStream in 2015. But the new sponsorship plan is two-pronged: in addition to representing a steady ad revenue stream, sponsors are also expected to promote the service as well.