Discovery Channel has now overtaken MTV to become the world's most valuable and most widely spread cable brand. Parent Discovery Inc (known as Discovery Communications until 2018) claims to be the world's top-ranked cable programmer, controlling a collection of science or reality-based channels with a global footprint. They include multiple Discovery-branded strands, as well as TLC, Animal Planet, ID and now European sports channel Eurosport (until 2015 a partnership with TF1 of France). It also has majority control of Discovery Family (formerly The Hub) with Hasbro and OWN with Oprah Winfrey, and the group has acquired local cable strands in markets as diverse as Scandinavia, Poland and the Middle East, as well as key broadcast rights including pan-European coverage of the Olympics from 2018. Combined audience is more than 3bn subscribers in 220 countries worldwide, including 509m for TLC and 455m for the Discovery Channel. In 2018, the group got bigger still with the acquisition of lifestyle rival Scripps Networks Interactive, whose channels include HGTV, Food Network, the Cooking Channel and a 50% stake in British cable group UKTV, then a joint venture with the BBC. Discovery agreed to buy out UKTV's factual channels in 2019 at the same time as agreeing a major new content partnership with the BBC that will form the basis for the group's own streaming service, set for launch "by 2020". Including a part-year contribution from the Scripps deal, group revenues were $10.6bn in 2018, with net income of $681m. Revenues were split more or less 60/40 between US and international operations, and 55/45 between advertising and carriage fees. David Zaslav remains CEO of Discovery following the Scripps deal. The Discovery Channel was originally launched in 1985 by documentary filmmaker John Hendricks with the funding from several different mediaowners. Following gradual consolidation of those investments, the group is now jointly controlled by Advance/Newhouse Communications (24% of voting shares) and Liberty Media/Global owner John Malone (21%). Founder Hendricks retired from Discovery's board in 2014.
Capsule checked 2nd April 2019
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Adbrands Daily Update 1st Apr 2019: Discovery Inc will launch its own dedicated streaming service "by 2020" supported by a major new ten-year deal with UK broadcaster and content creator the BBC. The service will offer material from Discovery's own library as well as hundreds of hours from the BBC archive, plus new original content and what the company is calling "experiences and offerings that go well beyond video". In all countries except the UK, Ireland and China, the channel will also carry new factual content specially created for it by the BBC. "This is our largest ever content sales deal," said BBC director general Tony Hall. "It will mean BBC Studios and Discovery will work together to take our content right across the globe through a new world-beating streaming service." At the same time, the two groups will effectively dissolve their current UK-based cable joint venture UKTV, with Discovery taking full control of factual lifestyle channels including Good Food, Home and Really. The BBC will buy out the various entertainment channels including Dave, Eden and Gold for around £180m.
Adbrands Weekly Update 3rd Aug 2017: Discovery Communications secured a deal to acquire cable rival Scripps Networks Interactive for around $14.6bn including the latter's debt. The merger will unite two of the leading forces in reality and lifestyle TV programming, combining Discovery Channel, Animal Planet and TLC with Scripps' HGTV, Cooking Channel and Food Network. The group will have four of the five most watched channels among female TV viewers in the US, and will become the #4 cable channel operator by ratings after Disney, Comcast and Fox, with around 13% total share. However, share of affiliate fees is much lower.
Adbrands Weekly Update 20th Jul 2017: Global cable broadcaster Discovery Communications is in talks to merge with unscripted content competitor Scripps Networks Interactive. Discovery is known worldwide for brands including the Discovery Channel, Animal Planet and TLC, and recently acquired European network Eurosport. Combined revenues last year were $6.5bn. The business is controlled by cable tycoon John Malone via a large minority stake. Family-controlled Scripps is a little over half Discovery's size, with strands such as Food Network, HGTV and the Cooking Channel. The two companies have discussed merger several times before, most recently in 2014, but the Scripps family were at that time unwilling to sell. The growing threat to traditional cable businesses from over-the-top streaming rivals is likely to have made them more open to a deal.
Adbrands Weekly Update 8th Sep 2016: Media tycoon John Malone is set to move more aggressively into sports ownership with a complicated deal to acquire Formula One motor racing via Liberty Media Corporation, one of several groups under his control. Liberty Media has acquired a 19% stake in Formula One from CVC private equity for $746m, and will acquire most of the sport's remaining voting shares early next year for around another $3.7bn in cash and stock. At the same time, the current Liberty Media Group entity - which comprises a one-third holding in ticketing and management company Live Nation among other assets - will change its name to Formula One Group. Former News Corp COO Chase Carey was named as its new chairman. F1 CEO Bernie Ecclestone - 86 next month - will remain CEO of the sport. Total value of the deal including debt is $8bn. CVC and other shareholders will retain non-voting equity. In addition to its immediate cash value, ownership of the hugely popular and profitable sport could ultimately be a significant asset for Malone's various other cable businesses, for example the Eurosport channel which also recently acquired exclusive TV rights across much of Europe to the Olympics after 2018. Eurosport is a division of Discovery Communications, controlled by Malone via a 29% shareholding. Liberty Media Corporation mostly manages Malone's US-specific investments, including the Atlanta Braves Major League Baseball franchise and SiriusXM satellite radio, both of which will remain separate from F1. Liberty Global owns a collection of cable operators across Europe including Virgin Media in the UK and Germany's Unitymedia, while Malone is also a major shareholder in the newly merged US cable operator Charter/Time Warner Cable, as well as the combination of pay TV channel Starz and movie studio Lions Gate.
Adbrands Weekly Update 25th Feb 2016: US media companies continued to take a hammering from investors after another collection of disappointing results. Discovery Communications delivered worse than expected figures for the final quarter. Annual revenues edged up 2% after currency headwinds, to $6.4bn, but net income slipped 9% to just over $1.0bn.
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