Discovery CEO Says 'Television Industry Is Far From Dead'
By Michael Tobin and Benjamin Mullin
Discovery Inc. said second-quarter earnings grew more than
fourfold, boosted by a tax benefit, higher operating results and
strong advertising revenue growth, prompting its chief executive to
say that the TV industry was "far from dead."
Net profit at Discovery, whose channels include TLC, Animal
Planet and Discovery Channel, was $947 million for the quarter
ended June 30, compared with $216 million a year earlier. The
dramatic increase resulted from the $455 million tax benefit, which
was triggered by a reorganization across its international networks
segment. The company reported $2.89 billion in revenue, up slightly
from $2.85 billion a year earlier.
U.S. advertising revenue grew by 5.8% to $1.15 billion, and U.S.
distribution revenue -- the money that pay-TV operators and other
companies pay to license Discovery programming -- grew by 5.2% to
Ad revenue for Discovery's International Networks unit, whose
channels include Eurosport, DMAX and TVN, decreased by 1.5% to $466
On an earnings conference call Tuesday, Discovery Chief
Executive David Zaslav said the company's advertising revenue
growth was driven in part by a strong demand during the annual
"upfront" period, where marketers buy spots in bulk for the coming
"The television industry is far from dead here or abroad," Mr.
Zaslav said. "Contrary to what many believe, we are getting real,
meaningful growth from the core TV business around the world."
Discovery last year closed its acquisition of Scripps Networks
Interactive, a lifestyle-TV colossus that turned Discovery into the
king of evergreen TV content among its peer networks.
Discovery has intensified its focus in recent months on
developing direct-to-consumer video-streaming services aimed at
viewers who are interested in sports, home improvement, the natural
world, sports, cars and cooking.
Mr. Zaslav said the company's planned joint venture with
home-improvement stars Chip and Joanna Gaines, which will include a
direct-to-consumer streaming service, will launch sometime next
year. The company will rebrand its DIY Network as "Magnolia," Mr.
Zaslav said, and Discovery is exploring options that will allow
streaming subscribers to make purchases on its video services.
He added that the growing slate of streaming services are
looking to buy original content from TV programmers but said
Discovery is focused on owning its intellectual property.
"They need more and more," Mr. Zaslav said. "And they're talking
to us about giving them more. But we're not doing any of that right
Write to Benjamin Mullin at Benjamin.Mullin@wsj.com and Michael
Tobin at Michael.Tobin@wsj.com
(END) Dow Jones Newswires
August 06, 2019 16:09 ET (20:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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