How can Discovery balance producing more original content for Discovery+ versus licensing existing shows to reduce costs?

Introduction

The trade-off between producing more original content for Discovery+ versus licensing existing shows to reduce costs is a critical decision that impacts our product strategy, user experience, and financial performance. This scenario touches on content acquisition, user engagement, and cost management. I'll analyze this trade-off by examining the product ecosystem, key metrics, and potential experiments to inform our decision-making process.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Discovery+ is facing increased competition in the streaming market. Could you confirm if this is driving the need to evaluate our content strategy?

Why it matters: Helps frame the urgency and competitive landscape Expected answer: Yes, competition is intensifying Impact on approach: Would emphasize differentiation in content strategy

• Business Context: Based on our current revenue model, I'm thinking subscription growth is our primary goal. Is this correct, or are we also focusing on ad revenue?

Why it matters: Influences content strategy to drive subscriptions or ad views Expected answer: Subscription growth is primary, ad revenue secondary Impact on approach: Would prioritize content that drives subscriber acquisition and retention

• User Impact: I'm assuming we have data on user preferences for original vs. licensed content. Can you share any insights on engagement differences?

Why it matters: Helps understand user behavior and content value Expected answer: Original content drives higher engagement but varies by genre Impact on approach: Would suggest a targeted approach to original content production

• Technical: Considering our current platform capabilities, are there any limitations in terms of content delivery or personalization that might affect this decision?

Why it matters: Ensures technical feasibility of content strategy Expected answer: No major limitations, but personalization could be improved Impact on approach: Would consider enhancing recommendation systems alongside content decisions

• Resource: Given the potential shift in strategy, I'm curious about our current content production capacity. Do we have the internal resources to significantly increase original content production?

Why it matters: Determines feasibility of ramping up original content Expected answer: Limited in-house capacity, would need to expand Impact on approach: Would consider phased approach or strategic partnerships