Discovery Channel has 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 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 (it acquired most of founder Oprah Winfrey's remaining shares in 2020), 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 exclusive live coverage of the Olympics from 2018 across Continental Europe (except Russia). Combined audience is around 3.7bn subscribers in 220 countries worldwide, including a footprint of 440m viewers for TLC and 360m 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, at that time a joint venture with the BBC. Discovery agreed to buy out the BBC's stake the following year at the same time as agreeing a major new content partnership with the UK broadcaster that forms the basis for the group's own streaming service Discovery+, which launched at the beginning of 2021. Other recent acquisitions include Magnolia / DIY Network, Golf Digest and most of the shares it didn't already own in specialist cycling broadcaster Play Sports. Group revenues for 2020 were $10.7bn, with net income of $1.4bn. Revenues were split more or less 60/40 between US and international operations, and 55/45 between advertising and carriage fees. David Zaslav is CEO of Discovery. 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. In May 2021, Discovery accepted a proposal to merge with the WarnerMedia division of AT&T in a new publicly quoted company, which will become known as Warner Bros Discovery.
Capsule checked 5th March 2021
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Adbrands Daily Update 17th May 2021: It didn't take long for AT&T to regret its high-priced push into media. Following on from the partial demerger of DirecTV, the group has now confirmed plans to spin out all its other WarnerMedia operations - including HBO, CNN and other cable strands as well as the Warner Bros production business - and combine them with smaller rival Discovery to create a new publicly quoted company, as yet unnamed. The enlarged entity - which will have pro forma sales of around $52bn - will be led by Discovery CEO David Zaslav. AT&T shareholders would end up with around 71% of equity in the new company, while Discovery shareholders would have 29%. The main focus of the business will be its twin streaming services of HBO Max and Discovery+. The two groups said their combined content creation budget of $20bn annually would exceed that of rival Netflix. However, perhaps the most significant aspect of AT&T's dramatic about-face is the huge cost in wasted shareholder funds. It acquired Time Warner just three years ago for more than $80bn and spent millions more on lawyers' fees defending the takeover against the strong objections of the Trump administration. The demerger will net AT&T just $43bn for the business.
Adbrands Daily Update 25th Mar 2020: Every day under Coronavirus detonates new bombs for the global marketing and media industry. One of this week's biggest is the official postponement of the 2020 Tokyo Olympics for at least a year. That has devastating implications for Japan, of course, but also for all the Games' sponsors and for the broadcasters who have spent at least two years preparing for this major media event. Two of the most badly affected are NBC Universal which has broadcast rights for the US, and Discovery Inc's Eurosport which acquired rights for much of continental Europe. NBC has already sold a record $1.25bn of advertising inventory around the Games and must now find a way of managing the resulting hole in its budgets. Discovery faces a similar scramble. In a statement, NBC said the company "is actively working with our advertising partners to navigate this postponement, and we're exploring all options to best serve their brands and our consumers this year, and into 2021." The latest suspension comes in the wake of the cancellation of all US sports leagues, which have regularly provided NBC with the year's top-rated programming.
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.
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