The streaming wars are in full battle mode with many trying to catch up to Netflix in the number 1 position. Disney is currently in second place and then there’s the scrappy Discovery+ app which officially launched January 4. In two months they have over 12M subscribers worldwide, with most of those subs opting for the $5/month ad supported version. What’s intriguing is the amount of ad spend on the app is increasing at a faster rate in contrast to Discovery’s linear cable version. As Nicholas Rossolillo pointed out on the Motley Fool recently in regards to the earnings call, “The quality of advertising dollars spent on discovery+ is already exceeding that of traditional cable.” And as the cliche goes: the trend is your friend.
The beauty of Discovery’s new ad supported app (and Disney’s) is that in order to fully maximize programmatic ad dollars, you need to partner with a supply side platform (SSP) that has the technical know-how/ability to scale alongside with you as viewership increases. Magnite is this partner for both Discovery and Disney, performing custom build-outs particular to both of their needs and thus becoming integral to each company’s ad supported streaming operations. Because big viewership data is the currency for ad placement decisions coming from the buy side (Trade Desk), Magnite is a sticky SSP service that can’t be easily dropped/replaced. Their growing pool of user data will snowball to the point where they will basically serve as the primary infrastructure water main for selling CTV premium ad inventory slots, continuing the mission of creating a federation among content providers against the walled garden giants.
https://www.fool.com/investing/2021/02/26/millions-discovery-plus-subscribers-reason-cheer/
“I skate to where the puck is going to be, not where it has been.” -Wayne Gretzky