Discovery to Spin Off Velocity Channel Into Joint Venture With TEN’s Digital Auto Businesses – Variety
Discovery Communications is spinning off Velocity into a new joint venture with TEN: The Enthusiast Network, coupling the TV network with the digital and live-event businesses of TEN’s 20-plus automotive brands including Motor Trend and Hot Rod.
The venture — in which Discovery will have a majority controlling interest — will bring together Velocity and TEN’s entire automotive digital, direct-to-consumer, social and live event portfolio. Financial terms weren’t disclosed. TEN’s print businesses will not be part of the new venture, but the JV will have a commercial agreement for continued cross-promotion between the print magazines and digital properties.
Discovery plans to add content from Velocity’s nearly 7,000-hour library to TEN’s Motor Trend OnDemand subscription video-on-demand service, marking Discovery’s first direct-to-consumer push in the U.S. The Velocity channel is currently distributed to 73 million American pay-TV homes.
The parties will dub the joint venture TEN: A Discovery Communications Company, which will have a combined reach of more than 150 million automotive superfans and car buyers. The combined properties of the JV generate nearly 1 billion monthly social-video views.
News of the automotive JV with TEN comes just three days after Discovery announced an agreement to acquire Scripps Networks Interactive, home of Food Networks, HGTV and others, in a deal valued at $14.6 billion.
The new joint venture “brings together the most trusted media brands in the automotive industry to create a multiplatform business with the reach, talent, and consumer insights to nourish car enthusiasts on all devices,” David Zaslav, Discovery’s president and CEO, said in a statement.
Last fall, Discovery invested $100 million to form Group Nine Media, a digital-media venture merging three startups backed by Lerer Hippeau Ventures (Thrillist, NowThis and the Dodo) with Discovery’s Seeker (formerly Discovery Digital Networks).
Paul Guyardo, Discovery’s chief commercial officer, will serve as chairman and CEO of TEN: A Discovery Communications Company in addition to his current responsibilities. Reporting to Guyardo will be Scott Dickey, president of TEN, and Bob Scanlon, who will be appointed president of Velocity and TEN Video Content.
“This venture is about giving advertisers the quintessential way to reach auto enthusiasts, prospective car buyers and an affluent male audience that buys a lot more than cars,” Guyardo said.
L.A.-based TEN, which is owned by GoldenTree Asset Management, has an option to sell its stake in the venture to Discovery at “fair market value” in the future. Overall, TEN operates 60-plus sites and 50 publications. Its auto group includes Motor Trend, Hot Rod, Roadkill, Automobile, Automotive.com, and IntelliChoice.
Motor Trend OnDemand — currently priced at $4.99 per month — is available on iOS and Android devices, as well as Apple TV, Roku, Xbox, Chromecast and Amazon connected-TV platforms. TEN says it has nearly 100,000 paying subs for the over-the-top service.
According to the companies, the expanded Motor Trend OnDemand will feature more than 2,000 hours of video, including original series such as “Roadkill,” “Head2Head,” “Dirt Everyday” and “Ignition” plus coverage of motorsports and live auto events. The SVOD service also will offer new original content featuring talent from series across TEN and Velocity, including “Wheeler Dealers,” “Bitchin’ Rides,” “Barrett-Jackson Live,” “FantomWorks,” “Speed Is the New Black,” “Iron Resurrection,” “The Auto Firm with Alex Vega,” and “Garage Squad.”