Report: AT&T, Discovery Looking to Merge Media Assets

Could WarnerMedia, HGTV, Animal Planet, TLC and Food Network soon be corporate siblings? Media reports suggest AT&T, which owns WarnerMedia, is in negotiations with Discovery to merge media assets in an attempt to better compete in the streaming video world against Netflix and Disney, among others.

Bloomberg is reporting that some kind of a deal could be announced in the coming week. Who would run the combined assets is unclear as Jason Kilar, who heads WarnerMedia, and Discovery CEO David Zaslev both have separate leadership skills. Kilar, who helped launch Hulu, would appear a frontrunner considering his experience in the digital ecosystem. Kilar brought on former Hulu CEO Andy Forssell to run HBO Max and WarnerMedia’s direct-to-consumer business.

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For AT&T CEO John Stankey, a merger of WarnerMedia, which includes Warner Bros., Turner and HBO, better validates the $85 billion spent acquiring the former Time Warner three years ago. That purchase sent AT&T’s corporate debt through the roof — a financial weight the telecom has been trying to reduce ever since. Stankey has been shedding non-core (and core) assets as fast as he can, including selling off Time Warner’s stake in Hulu, AT&T’s New York corporate space, anime unit Crunchyroll, and DirecTV, among other actions.

For Discovery, which launched a branded SVOD platform in January, getting penetration in a saturated market was always going to be a significant challenge — despite offering such assets as “Property Brothers” and Chip and Joanna Gaines’ Magnolia Empire, among others.

HBO and HBO Max ended the most-recent fiscal quarter with 44.2 million subscribers. Discovery+ topped 13 million subscribers at the end of April since launching in January. A strong start, but paltry when compared to Netflix’s 200+ million subs and Disney+ exceeding 103 million. Amazon just disclosed that its Prime Video service has 175 million subs.

 

Discovery+ Streaming Service Tops 13 Million Subscribers

Driven by recent launches on Comcast Xfinity and Amazon Prime Video Channels, the Discovery+ subscription streaming video-on-demand service topped 13 million subscribers through the first quarter, ended March 31.

The SVOD service featuring 55,000 episodes from more than 2,500 reality TV shows from HGTV, Food Network, TLC, Animal Planet, Chip and Joanna Gaines, Magnolia Network and OWN: Oprah Winfrey Network, among others, launched in January priced at $4.99 with ads, and $6.99 without ads. The service is also available on Starzplay in the Middle East and North Africa, and on Samsung Smart TVs and Amazon Fire TV devices in the U.K. and Ireland.

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“The global rollout of Discovery+ is off to a fantastic start by any measure. Key metrics, including subscriber additions, customer engagement, and retention, are exceeding our expectations and demonstrating sustained momentum into the second quarter,” CEO David Zaslav said in a statement.

Zaslav said the company now has more than 15 million SVOD subs when factoring in other branded platforms such as Eurosport’s Global Cycling Network.

Discovery+ SVOD Bows on Amazon Prime Video Channels

Discovery April 15 announced that its Discovery+ subscription streaming video service is now available on Prime Video Channels in the United States. The streamer launched in the U.S. in January on most devices and services, including Amazon Fire TV and Fire TV Edition smart TVs.

The latter is a platform for Prime members that enables access to third-party over-the-top video services for a separate or reduced fee. Amazon keeps a percentage of revenue and user info from each service, while delivering them access to millions potential subscribers.

The streamer features more than 55,000 episodes of current and classic TV shows from Discovery’s portfolio of networks, including HGTV, Food Network, TLC, ID, OWN, Travel Channel, Discovery Channel, A&E, The HISTORY Channel, Lifetime, Animal Planet and the forthcoming Magnolia Network, as well as more than 50 original titles.

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“Today’s launch on Amazon Prime Video Channels expands Discovery+ access … beyond Fire TV streaming devices and Fire TV Edition Smart TVs,” Gabriel Sauerhoff, SVP of digital distribution and commercial partnerships at Discovery, said in a statement. “This innovative relationship provides multiple, compelling ways for us to reach and delight consumers with a truly differentiated streaming experience through Discovery+.”

The ad-free version of Discovery+ is available on Prime Video Channels for $6.99 per month and the less-expensive ($4.99) ad-supported version of the service will be available in the coming months. Prime members can subscribe with no extra apps to download, and no cable required by visiting amazon.com/channels/discoveryplus. The channel subscription can be canceled at any time.

“Adding Discovery+ reinforces Prime Video Channels’ promise of bringing the best [online] shows to our members, all in one place,” said Soumya Sriraman, head of Prime Video Channels. “With a Discovery+ channel subscription, Prime members now have even more ways to access content they love directly on Prime Video.” Shows include “Magnolia Table With Joanna Gaines,” “Guy’s Grocery Games” and “Bobby and Giada in Italy,” among others.

Interpret: Discovery+ Fills Strong Niche

Discovery Channel’s new Discovery+ streaming service, which launched Jan. 4 in the United States, is filling a strong niche, according to Interpret research.

Available for $5 per month with a commercial-free version at $7 per month, the platform not only offers shows from Discovery Channel, with more than 55,000 episodes at launch, but also content from Discovery-owned HGTV, TLC, Food Network, Animal Planet, OWN and more. Discovery also has partnerships with BBC, A&E, Group Nine and others to provide additional content.

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“Discovery’s portfolio of channels offers an array of science, reality and non-fiction programming, providing it with a unique niche of content that is differentiated from Disney+, HBO Max, Peacock or other broadcast and cable TV network-oriented streaming services,” according to Interpret.

Interpret’s New Media Measure found that this type of content is popular, with viewership of Discovery’s portfolio of channels ranging from 7% to 20% of pay-TV subscribers.

“Discovery is betting that those same people will happily pay $5 per month, particularly if they leave traditional pay-TV,” according to Interpret.

Discovery+ is already available in the United Kingdom and Ireland and intends to roll out to 25 international markets this year. A promotion from Verizon provides as much as one year free of Discovery+ to its wireless customers.

Discovery Touts Overseas HGTV, Food Network Launches for Driving Revenue Increase

Media giant Discovery Feb. 27 reported fourth-quarter (ended Dec. 31, 2019) revenue increased 2% to $2.8 billion, with U.S. advertising and distribution revenue up 1% and 5%, respectively. International advertising and distribution revenue increased 5% and 10%, respectively.

Discovery’s portfolio of premium brands includes Discovery Channel, HGTV, Food Network, TLC, Investigation Discovery, Travel Channel, MotorTrend, Animal Planet, Science Channel, and the forthcoming multi-platform joint venture with Chip and Joanna Gaines, Magnolia, as well as OWN: Oprah Winfrey Network in the U.S., Discovery Kids in Latin America, and Eurosport, home of the Olympic Games TV broadcast across Europe.

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Specifically, Discovery attributed revenue gains in part to the globalization of domestic media brands HGTV and Food Network. In 2019, HGTV and Food Network launched in more than 30 new countries and territories combined.

Total share of viewing in 2019 for Discovery’s top 10 international markets increased 2%, on average. The company continued to establish foothold across existing and new direct-to-consumer platforms in Europe, including Dplay in 10 markets, TVN Player in Poland, and Joyn in Germany.

Discovery said it was the most-watched pay-TV portfolio in the U.S. among women 25-54 and 18+ for both primetime and total day in 2019. TLC delivered its best year ever globally, improving both international share and viewership by 8%, and in the U.S., TLC was the fastest growing ad-supported cable network among women 25-54 and 18-49, with its best primetime performance in 16 years.

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“2019 was a year of promises made and promises delivered,” CEO David Zaslav said in a statement. “Our differentiated local content strategy and global scale, coupled with our unique free cash flow conversion profile, provide distinct financial flexibility that allows us to adapt to changing media consumption habits.”

 

Discovery CEO: SVOD Market Turning into ‘Street Fight’

On the heels of WarnerMedia putting a name (HBO Max) to its pending subscription streaming video service, Disney launching branded service as well as expanding Hulu globally, Discovery CEO David Zaslav says “chasing the same ball” (i.e. scripted digital content) with the world’s biggest media companies is not the company’s focus.

Speaking July 10 with CNBC from the Allen & Co. confab in Sun Valley, Idaho, Zaslav contends the bustling SVOD market is turning into a “street fight” — a scenario he believes Discovery has successfully side-stepped.

“[About] 50% to 60% of the content that people consume is not scripted series or scripted movies,” Zaslav said. “For us, it’s home [HGTV], food [Food Network], Discovery, Oprah, crime [ID], Chip and Joanna Gains [‘Fixer Upper’]. We own most of the golf [programming] in the world, most of the cycling. We have almost all [non-scripted] quality content. And we own it everywhere in the world.”

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With Netflix and Hulu expanding non-scripted programming, including documentaries and food-themed reality TV, Zaslav says Discovery’s market hold on food, home and crime-themed shows is not in threat.

“We’re pretty secure in our space,” he said. “People aren’t buying Netflix to watch a home [improvement] show. We think we have something very differentiated and people come to us for it. They come to us for it on all platforms in all languages.”

Yet, much of HGTV, Food Network, ID and Oprah content is consumed through traditional pay-TV channels — distribution under threat by over-the-top video.

Zaslav agrees the traditional linear TV business is in secular decline. But he said Discovery generated about $3 billion in free cash flow in its most-recent fiscal year.

The executive said Discovery dominates the female non-scripted market in the United States, with OTT video businesses targeting golf (outside the U.S.), cycling and natural history.

“We have a low to mid-single digit growth company, having nothing to do with all of the global IP that we own,” he said. “We think it’s sustainable that we can grow low to mid-single for the next several years.”

Zaslav contends streaming movies and TV shows has become commoditized with Showtime Now, HBO Now, Amazon Prime Video, Netflix, Apple TV all offering similar content.

“That’s why we did Scripps [Networks] acquisition, because we think people that love food are always going to come to food, people that love home are always going to come to home. So, we think that this is an ecosystem that will work together,” Zaslav said.

With Disney buying Fox, Comcast acquiring Sky and AT&T buying Time Warner, Zaslav dismissed suggestions Discovery would have merge with another major media company to remain competitive.

“We’re the largest independent media company,” he said. “We think some of the assets we have that we’re the largest international media company. We’re in 200 countries.

“But in the long run if we’re wrong, then we have the biggest assortment of IP in affinity groups that people love and we’re in every language around the world. We think that we’re going to win either way. We’ll be more valuable.”

Discovery, ProSiebenSat.1 Launching Online TV Service in Germany

U.S. media giant Discovery and German pay-TV operator ProSiebenSat.1 are launching in June an online TV service in Germany dubbed “Joyn.”

The service — similar to Sling TV, DirecTV Now, etc. in the United States — replaces 7TV and will feature about 50 channels streaming content seven days ahead of pay-TV and available on VOD for 30 days.

With a goal of 10 million subscribers, “Joyn” will feature original content as well as movie services Maxdome and Eurosport Player. It will be accessible on TVs, smartphones, tablets and the Internet.

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Netflix currently has about 2.6 million German subs, while Amazon Prime Video has about 3.3 million.

“We are aiming to transform the German video entertainment market,” Alexandar Vassilev, managing director of Joyn, said in a statement.“Our focus is exclusively on the needs of our audiences and we commit to actively listen and reflect their feedback as we make our platform a success.”

For Discovery, the move represents another step integrating internal brands in Europe through over-the-top video distribution.

The parent to HGTV, Food Network and DIY Network, among others, earlier this year bowed Home & Garden TV in Germany, including a series of localized reality TV shows centered around home improvement.

 

 

 

Discovery Launching ‘HGTV’ Brand in Germany

Discovery Communications, beginning June 6, is launching its popular HGTV home improvement network in Germany — the first international bow for the brand since it was acquired in 2018 (along with Food Network and Travel Channel) from Scripps Networks for $12 billion.

The No. 3 pay-TV network in the United States comes to Germany featuring more than 500 hours of programming, including legacy series, “Flip or Flop,” “Fixer Upper,” “House Hunters,” “My Lottery Dream Home” and “Good Bones,” among others.

The network will be offered on linear ad-supported TV, despite the fact Discovery partnered with ProSiebenSat.1 last summer to build a subscription streaming video service featuring live TV, local and Hollywood movies and TV shows, and sports.

“We are incredibly excited to be announcing the launch of HGTV in Germany and start using our scale and expertise across [Europe, Middle East and Africa] to expand HGTV and other key real-life entertainment brands into new territories and reach millions of new people,” Kasia Kieli, president & managing director, Discovery EMEA, said in a statement.

For Susanna Aigner-Drews, SVP & GM Germany/Austria/Switzerland at Discovery, HGTV represents one of the last ad-supported broadcast TV network on German television.

Susanne Aigner-Drews

“In a highly fragmented TV market, there are not many niches to prove,” Aigner-Drews told SZ.de.

While house flipping is rare, home ownership in Germany sits at about 51%, compared to about 65% in the U.S. HGTV in Germany will initially focus on its American/Canadian shows, with German-centric programming to follow.

“TLC [The Learning Channel] has [finally] arrived in Germany after five years,” Aigner-Drews said. “We will have the [necessary] patience with Home & Garden TV.”

Discovery Returns to Profitability Following $15B Scripps Networks Purchase

Discovery Feb. 26 reported fourth-quarter (ended Dec. 31, 2018) net income of $265 million following a net loss of $1.1 billion during the previous-year period. Revenue increased 51% to $2.8 billion from $1.85 billion a year earlier.

Spearheading the turnaround was last March’s $15 billion acquisition of Scripps Networks, including coveted brands HGTV, DIY Network, ID, TLC, Animal Planet and Food Network. Discovery also owns stakes in MotorTrend Group and Oprah Winfrey Network (OWN).

For the fiscal year, net income reached $594 million compared to a $337 million loss in the previous year. Revenue increased 54% to $10.6 billion from $6.9 billion.

Discovery has also invested hundreds of millions in sports programming in Europe, including Olympics rights and an over-the-top video deal for the PGA European Tour.

It also inked exclusive pay-TV and streaming deals with Chip and Joanna Gaines, the husband and wife team behind the hugely successful “Fixer Upper” franchise, and Christina El Moussa, the prettier half of the now-divorced from “Flip or Flop” husband/co-star Tarek El Moussa.

“2018 was a transformational year for Discovery, highlighted by our operational accomplishments, our strong progress in synergy generation and our overall solid financial performance, as we continued powering people’s passions around the world,” CEO David Zaslav said in a statement. “Discovery is a differentiated global content company, and we are optimistic that we will continue to build on all of our operating momentum to drive additional shareholder value into the future.”

 

 

 

Sling TV: Subscribers Most Rented, Watched ‘The Incredibles,’ ‘Jurassic World,’ Among Other 2018 Highlights

Sling TV, Dish Network’s pioneering online TV platform, says its 2.4 million subscribers still love to rent and watch catalog movies.

The service says subs rented Disney/Pixar’s The Incredibles the most in 2018, followed by Black Panther, Sony Pictures Home Entertainment’s Jumanji: Welcome to the Jungle, Marvel’s Avengers: Infinity War and Thor: Ragnarok (Disney).

Most-streamed movies on Sling included catalog titles (in order): Universal Pictures Home Entertainment’s Jurassic World, Step Brothers(Sony), Deadpool (Fox), Star Wars: The Force Awakens (Disney), and The Day After Tomorrow (Fox).

Most-watched TV series included HGTV’s “Fixer Upper,” featuring Chip and Joanna Gaines, “The Big Bang Theory” (CBS), “Family Guy” (Fox), “House Hunters” (HGTV) and Food Network’s “Diners, Drive-Ins and Dives.”

The rankings are based on viewing trends of subscribers to the $25 monthly Sling Orange and/or Sling Blue options and Extras (transactional VOD) between Jan. 1 and Nov. 27.