Discovery passes 22m streaming subs on back of discovery+ growth

Discovery has said it had 22 million paying streaming subscribers at the end of last year, including recently launched direct-to-consumer offering discovery+, up from around 20 million for the prior quarter.

CEO David Zaslav said that the strong streaming subs growth provided “a tailwind” for revenue growth of 11%. However, even advertising growth reached 10%, despite the challenges facing the ad market.

Zaslav said that Discovery now expects its merger with WarnerMedia to close in the second quarter following approval by the European Commission and a green light from US tax officials for the proposed structure of the deal.

Discovery posted Q4 revenues of US$3.2 billion, up 10% or 11% excluding currency movements.

In the US, distribution revenues grew by 17%, outperforming advertising revenue growth of 5%, while internationally the placing was reversed, with advertising growth of 12% exceeding distribution revenue growth of 5%.

Discovery+ was the main driver of streaming growth, the company said. The service also helped deliver the increase in distribution revenue, offsetting a decline in linear subscribers. Distribution revenue was also boosted by increases in affiliate rates.

Linear subscribers dropped by 5% over the course of the year excluding the impact of the sale of the group’s Great American Country network.

Discovery has also moved forward with plans to deliver an “ad-lite” offering in key markets on the back of moving its European  streaming subs base to the same technology platform as the US. The lower-cost ad-lite version of the service will debut in the UK in March, providing access to unscripted content but not to premium sports.

The factual content giant posted OIBDA of US$1.14 billion for the fourth quarter and OIBDA of US$3.82 billion for the full year.

Zaslav said that 2021 had been “by all measures an exceptional year for our company” that had delivered close to US$4 billion in cash and generated “robust” cash flows, which would support “our ability to invest in growth initiatives”.