With its controlling purchase of Play Sports Group, Discovery Inc. President and CEO David Zaslav said the company is eyeing a two-wheeled revenue strategy as it pursues opportunities in the global cycling market.
The Play Sports deal, announced Jan. 8, will boost Discovery's stake in the digital sports media company to 71% from 20%. Play Sports includes digital brands Global Cycling Network, Global Triathlon Network and Global Mountain Bike Network. Under the terms of the transaction, Play Sports Group founder and CEO Simon Wear and the company's team of 140 cycling experts across various divisions will join Discovery to form a cycling-focused subsidiary of the company.
Discovery aims to forge a global cycling media ecosystem leaning on its principal sports brand Eurosport, the TV rights holder for a broad swath of cycling events, including Grand Tours, over 35 UCI World Tour races, Monuments and the UCI World Championships. It hopes to reach cycling enthusiasts now estimated to represent a $50 billion global market that spans a range of media and consumer products.
"People love cycling. Not just watching cycling, but reading about cycling. What bikes do I buy? What shoes? What socks? What are people talking about? Where should I go on cycling vacation?" Zaslav said at the Citi 2019 Global TMT West Conference in Las Vegas.
Pointing to Eurosport.com, which attracts about 40 million people per month, Zaslav said Discovery will look to create a free, ad-supported platform for cycling enthusiasts. "We'll build a big funnel for cycling through the Global Cycling Network and the Global Mountain Biking Network," he said. Those who want more will be able to subscribe to premium content.
A similar strategy is in play with Discovery's recently launched direct-to-consumer GolfTV offering. The international service features live golf from the PGA Tour, European Tour, Ladies European Tour, as well as various subscription video-on-demand content, including fare that will be produced through a deal with Tiger Woods.
Asked about monetization opportunities for such services, Zaslav indicated he has high hopes but also acknowledged the company does not yet know what numbers these offerings will yield.
"If we can get these passion groups, it's much more sustainable than it is in these big baskets that brought entertainment with scripted and movies," he said, contrasting the niche offerings against broader-themed subscription services.
Zaslav said if Discovery gets people to love its golf and cycling services, it will be easier and less expensive to keep subscribers than a model such as Netflix Inc., which has to generate more original shows like the Golden-Globe winning "The Kominsky Method" and "The Crown."
"We think if we can get people loving this passion, these power-passion baskets, that we'll be able to hold onto those lovers," he said.