Streaming Video, Tax Benefit Up Discovery Q2 Revenue, Profit

Aggressive expansion to over-the-top video distribution across its content portfolio help Discovery Inc. post second-quarter (ended June 30) net income of $947 million, compared with net income of $216 million during the previous-year period.

The bulk of that increase came from a non-cash tax benefit and higher operating revenue. Total revenue increased 1% to $2.88 billion.

Discovery continues to benefit from the $14.6 billion acquisition of Scripps Networks Interactive in 2017, home to popular Food Network, HGTV (“Flip or Flop,” and “Fixer Upper” stars Chip and Joanna Gaines), Travel Channel and DIY Network programming, among others.

In the quarter, Discovery launched nine additional networks on YouTube TV in the U.S. and signed a multi-year live and on demand carriage agreement with fuboTV.

Earlier this year, Discovery and BBC Studios announced a series of agreements for a new 10-year distribution deal, which includes content for a pending global streaming service.

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The company also has a partnership with the PGA European Tour for subscription streaming video service, Golf TV, expanding its content portfolio and move towards becoming the “digital home of golf” around the world.

The wide-ranging agreement includes international multi-platform live rights, in selected territories, to all European Tour events and the next two Ryder Cups.

“We delivered another quarter of strong operating and financial performance with the benefits of the Scripps Networks acquisition flowing through all areas of our global business, while also accelerating our pivot to digital and direct-to-consumer offerings,” CEO David Zaslavsaid in a statement. “With an exceptional team in place, strong top-line performance and a healthy balance sheet, we are confident in our ability to continue executing on our strategic priorities to drive long-term growth and shareholder value.”

Scripps Networks Programming Returns Discovery to Profitability

Television shows about food, home improvement, buying and selling continue to resonate with viewers and the fiscal bottom line of Discovery Communications.

The media company May 2 reported first-quarter (ended March 31) net income of $384 million compared to a net loss of $8 million during the previous-year period. Revenue increased 40% to $1.4 billion from $1 billion last year.

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Key to the economic turnaround: Discovery’s $14.6 billion acquisition of Scripps Networks Interactive in 2017, home to popular Food Network, HGTV (“Flip or Flop,” and “Fixer Upper” stars Chip and Joanna Gaines, etc.), Travel Channel and DIY Network programming.

Discovery is planning new programming and SVOD platforms around the Gaines and their Magnolia brands.

Other quarter highlights included previously reported 10-year global partnership with the BBC for subscription streaming video content as well as a resolution of the UKTV joint venture. Secured a new distribution agreement in the U.S. with YouTube TV, adding to broad inclusion across online TV platforms.

Indeed, Discovery in launching the HGTV brand in Germany and a golf-themed SVOD service (“Golf TV”) overseas with the PGA European Tour.

“In the first quarter we delivered a solid start to 2019, as we continue to power people’s passions through our loved brands and our owned global IP in genres that nourish audiences around the world,” Discovery CEO David Zaslavsaid in a statement.

Discovery Inks Streaming Video Deal with PGA European Tour

Discovery and PGA European Tour Dec. 13 announced a new partnership that will see the media network’s pending subscription streaming video service, Golf TV, expand its portfolio and move towards becoming the “digital home of golf” around the world.

The wide-ranging agreement includes international multi-platform live rights, in selected territories, to all European Tour events and the next two Ryder Cups.

The partnership will bring coverage of the European Tour and Ryder Cup together under Golf TV, launching in January 2019. The SVOD will carry more than 40 European Tour events per year starting in January.

They include:

  • Every Race to Dubaievent throughout the season.
  • All Rolex Seriesevents, including the Abu Dhabi HSBC Championship, Dubai Duty Free Irish Open, Aberdeen Standard investments Scottish Open, BMW PGA Championship, Italian Open, Turkish Airlines Open, Nedbank Golf Challenge and season-ending DP World Tour Championship, Dubai.
  • All World Golf Championshipsevents, including the Mexico Championship, the Dell Technologies Match Play, the FedEx St. Jude Invitational and HSBC Champions.
  • Golf Sixes and the Hero Challenge.
  • The European Challenge Tourand Staysure Tour.

“Welcoming the European Tour and The Ryder Cup into Golf TV is a significant step in our journey to becoming a premier global destination for golf entertainment,” Alex Kaplan, president and GM, Discovery Golf, said in a statement.

The service will stream live coverage of the next two Ryder Cups from Whistling Straits, Wisconsin, in 2020 and Marco Simone Golf & Country Club, Italy, in 2022 will be available to fans in selected territories.

Golf TV underscores Discovery’s strategy to evolve its brand internationally on the links.

Starting in January, Discovery will hold live European Tour linear and digital rights in markets, including Italy, Romania, Russia, Spain (sublicense agreed with Movistar+), Turkey, Germany, Austria, Switzerland, Portugal, Balkan countries, Eurasia, India, Latin America, Indonesia, Thailand, and Singapore, among others.

Discovery will focus on developing key aspects of the European Tour digital operation, such as technology, monetization and advertising. The European Tour will continue to provide content and editorial services for the digital platforms, and service its existing news and media clients.

Under the agreement, Discovery will also have the ability to sublicense TV and digital coverage, in the markets for which it holds exclusive rights, as part of a broader strategy to grow viewership of the European Tour.

These markets include Albania, Belgium, Cyprus, Greece, Hungary, Iceland, Italy, Malta, Netherlands, Poland, Romania, Russia, Spain (sublicense agreed with Movistar+), Turkey and Ukraine.

“To become the true ‘digital home of golf,’ we know we must think differently and go further than anything that has been done before,” said Kaplan.

Indeed, Golf TV last month inked an exclusive global content partnership with 14-time major champion Tiger Woods. The platform will collaborate with Woods on a wide range of content creation opportunities, including deep-dive instruction to help players improve their game, and exclusive access into Woods’ tournament preparation. The unique content will offer fans an authentic and regular look into the life, mind and performance of the game’s ultimate icon.