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Discovery Rebrands Velocity as Motor Trend Network (EXCLUSIVE)

Cable group to focus on niche direct-to-consumer offerings following Food Network, HGTV acquisition

Discovery will remodel its automotive-focused Velocity cabler as Motor Trend Network in the fall, part of a strategic effort to deliver more direct-to-consumer streaming services tailored for viewers with rabid interests.

David Zaslav, Discovery Inc. president-CEO, plans to double down on direct-to-consumer offerings designed to “nourish passionate audiences” now that Discovery has completed its acquisition of Scripps Networks Interactive, parent company of Food Network, HGTV, Travel Channel, and other cablers. The focus is delivering original content that is distinct from the complementary linear channels and considered must-have for super-fans of a given genre. The super-fan orientation of the enlarged Discovery will be a major theme at the company’s upfront presentation to advertisers and media this evening at New York’s Alice Tully Hall.

“We see ourselves as a company that is focused on passionate fans and passionate audiences,” Zaslav told Variety. “We have content and brands that nourish passionate audiences for food, cooking, science, Oprah and cars.”

Discovery and the parent org of Motor Trend, the automotive news and content provider, set a joint venture last summer that saw Motor Trend vast archive, Discovery’s Velocity and more than two dozen other automotive-related brands combined into an entity known as The Enthusiast Network, or TEN. TEN has now been rebranded Motor Trend Group. Discovery owns a majority of the partnership with New York-based GoldenTree Asset Management.

“It’s a channels business, a direct-to-consumer business and an IP business,” Zaslav said.

Bob Scanlon will remain president of Velocity and Motor Trend Group Video Content. The Discovery veteran has steered Velocity since its launch (as a rebrand of Discovery’s HD Theater) in 2011.

The pact with Motor Trend was attractive to Discovery because the brand already has about 165,000 subscribers who pay $5 a month for the Motor Trend OnDemand streaming content service that is differentiated from the cabler’s linear programming. The streaming platform is designed for short-form content, news and video viewed on mobile devices.

The deal with Motor Trend and the absorption of Scripps’ blue-chip TV brands has pointed Zaslav and Discovery firmly in the direction of DTC as a growth market.

“(Scripps) is a big part of the reason we’re in the passion brand business,” he said. “We have content that has a great ability to be sticky and sustainable on traditional television. We have a real chance to build a direct-to-consumer business that is compelling.”

Zaslav emphasizes the Motor Trend streaming service is designed to complement the linear channel, but Discovery’s push into direct-to-consumer content is also a hedge against an uncertain future for low-rated niche networks. Velocity, which is widely distributed in about 74 million MVPD homes, has been growing steadily in the past two years but still only delivers a modest linear audience. In the fourth quarter, Velocity averaged 298,000 total viewers in primetime, including about 88,000 men in the 25-54 age range. That’s not a big enough crowd to ensure the rebranded Motor Trend Network a spot in a world of skinny bundles and low-cost options.

However, Motor Trend Network is expanding in international markets. A free ad-supported linear channel will launch in Italy later this month; the on-demand app went up on Amazon in the U.K. in December.

The addition of the content libraries from the Scripps channels gives Discovery the goods to offer a wide menu of programming options for potential customers. The focus inter-connected linear and digital services will give Discovery a boost in trying to dominate advertising in specific niches such as food, travel and automotive. “We’re only in the second inning,” Zaslav said. “Our journey is to be the best in class in longform, nonfiction storytelling.”

Discovery has been building its direct-to-consumer portfolio outside the U.S., notably with its Eurosport linear TV and digital operations. Serving up the winter Olympic games from PyeongChang on Eurosport in February helped Discovery understand the type of content Olympics buffs wanted on linear versus digital platforms. Eurosport’s streaming service added 500,000 subscribers in a 10-day period during the Olympics.

“It helped us understand what people will pay for and what really excites them,” Zaslav said. “The best way to think about these (DTC) products are as the magazine of the new era. In the past if you loved cars, you subscribed to Motor Trend magazine. Now you subscribe to a streaming product.”

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