Discovery grows international revenues and profit

David Zaslav

Discovery has reported an uptick in revenues and profit at its international business but noted Brexit concerns meant ad revenues were down in its largest market, the UK.

“You have the UK down 4% and Brexit has had a meaningful impact on the UK,” CEO David Zaslav told analysts in the wake of Discovery reporting its latest results.

Overall in Europe, however, Discovery’s international arm performed well. The company said that currency effects aside, distribution revenues were up double-digit.

The channel operator has been investing heavily in sports rights and has been pushing operator’s for better affiliate fees, resulting in well-publicised battles with platforms including Sky.

That ultimately resulted in a new deal for the Discovery channels in the UK and Germany.

Elsewhere, Zaslav talked up Discovery’s digital and direct-to-consumer efforts highlighting deals with Snapchat and Amazon, on which it recently launched Say Yes to the Dress superfan channel Say Yes.

The Discovery boss also said that internationally where operators are moving to trim their channel line-ups and introduce ‘skinny bundles’, Discovery’s nets are always part of those streamlined line-ups.

In the US, meanwhile, he said the skinny bundle phenomenon did not really exist.

“Skinny bundle in the US is a fiction,” he said. “The idea that you have a $40 offering filled with regional sports, sports and all these – an incomplete package, really, and then you have to buy broadband on top of it, so the skinny bundle is $60 or $70. So it’s really not a skinny bundle. It’s a bundle.”

He added: “It’s a bundle that may be attractive to a small group of people. But, in the end, I think the market will be rationalised.”

Discovery reported overall first quarter revenues of US$1.61 billion (€1.48 billion) compared with US$1.56 billion in the same period a year earlier.

International revenues were US$747 million versus US$711 million and OIBDA profit was US$194 million compared to US$182 million across the same period.