Discovery Communications

Posted on October 16, 2016 by bmkozach

Bethany Kozachuk and Christina McDonagh

Discovery Communications’ logo

Discovery Communications
One Discovery Place
Silver Spring, MD 20910

Phone Number: (240) 662-2000
Website: http://www.discovery.com/

OVERVIEW

Poster for Iceberg Alley

Founded in 1982 by University of Alabama graduate John Hendricks, Discovery Communications has become one of the most influential companies in the global cable market. Discovery struggled at first, but deals with the cable operators such as Telecommunications Inc, Cox Cable Communications, and Newhouse Broadcasting group soon arose. By June of 1986, Discovery had seven million subscribers; spurring the company to commission its first original program, Iceberg Alley, in 1989. [11] [4]

Discovery Channel Logo

TLC Logo

Animal Planet Logo

Discovery Communications has become one of the leaders in global entertainment. The company consists of 33 channels worldwide, three full-service production studios, and in the US, 13 cable and satellite networks that compromise the industries most widely distributed portfolios in the US. This portfolio includes three major channels: Discovery Channel, TLC (formerly The Learning Channel) and Animal Planet. These three channels reach over 91 million households in the US and have kept Discovery Communications at the top of the industry. Discovery’s content can be divided into three genres: Kids, Sports, and Non- fiction.[6] [11]

Key Executives

President & CEO of Discovery Communications

The President and CEO of Discovery Communications is David Zaslav. Zaslav has led the company since 2007, and under his reign, Discovery has begun trading as a public company on the Nasdaq stock exchange. As a result, in 2014, the Discovery became a Fortune 500 company. [10]

Bruce Campbell, Chief Development Officer and General Counsel

Andrew Warren-Senior Executive VP and CFO

Jean-Briac Perrette President
Discovery Networks International

2016-2017 Program Roster

Shark Week Poster

For the 2016-2017 Programming Slate, Discovery announced that their lineup would consist of 22 returning shows, but also 20 new shows as well. Cooper’s Treasure Sacred Steel, The Wheel, and a Deadliest Catch spin-off, Deadliest Catch:Dungeon Cove, are four of the highly anticipated shows coming out this season. Discovery also announced that they would be launching a revolutionary anthology series called Discovery Impact. The series was aired at the 2016 Sundance Film Festival and will focus on the impact that mankind has had on the earth’s environment, as well as what individual people can do to solve the global environmental issues.[9] Fan favorites like Naked and Afraid, Gold Rush, and Bering Sea Gold are on the roster for this year as well. The week long event Shark Week has been kept on as well. Last year’s Shark Week had the highest ratings ever for the event. All of these programs have kept Discovery at the top of the pack, but there are still gaps that need to be filled in this programming giant’s empire. [1]

Financials

According to the third quarter reports, net income available to Discovery decreased 22% to $219 million from $279 million due to a $50 million after-tax impairment charge because of a Lionsgate investment and higher equity-based compensation. This was fractionally offset by a decrease in taxes, currency-related transaction gains, and higher contribution from equity investors income. Discovery’s earnings per share (EPS) decreased 16% to $0.36 because of lower DCI Net Income, but that was partially offset due to lower shares outstanding. Adjusted EPS decreased 15% to $0.40 compared to $0.47 of last years third quarter. Free cash flow dramatically increased 75% to $410 million due to lower cash taxes and the timing of working capital.[3] With all of this financial information, it seems as though Discovery has done well for itself in the third quarter, but there are some concerns within the company about distributing media more effectively and their ranking in the stock exchange.[7]

While Discovery is considered to be wildly successful, the company is not immune to hardships. Discovery posed an earnings surprise (down) of 16.39% and in the past three of four quarters has had an earnings surprise averaging 6.02%. These swings in earnings are due to the company’s struggle to produce advertising revenue. Also, problematically, a major source of its revenue comes from 10% of its customers.[15]

Chart of Stock Prices 2015-2016

Stocks at discovery have been sporadic over the years. While the company was doing well in 2015, once 2016 hit, Discovery seemed to take a sharp drop, according to the NASDAQ. Stock has been consistently declining over the past months, but there is still hope for Discovery. With the growth of online streaming and OTP (over the top), many customers are cutting their ties to cable and satellite. In order to keep viewers tuning in, Discovery Communications has begun efforts to get its content on as many screens as possible.[15]

Happening Now

560 Media Logo

In November, Discovery joined a group of over thirty producers and distributors that signed with 560 Media. 560 Media is a Global Collections Agency that offers clients intelligence-based revenue-management services.[8] The agency specializes in Television and Film rights that are beneficial to companies in a fragmented and intricate market. Discovery’s partnering with 560 Media will certainly give the evolving company the new edge that it desperately needs. [12] The Director of Global Music at Discovery thinks that,”…560 Media’s fresh and flexible approach to catalog representation will assist Discovery in this specialist area, allowing us to maximize remuneration in the international arena.” Management at Discovery is also working on shifting their focus toward secondary rights management for their high quality catalog. 560 Media will enable Discovery to keep tabs on their revenues and help Discovery gain earning power that is crucial in today’s market.[13]

While Discovery has been late to the online TV business, it certainly has been making

Discovery GO’s logo. The streaming app introduced on December 2nd 2015.

efforts to catch up with other companies like Disney. Last year, the company began allowing online streaming through the Discovery GO app to cable and satellite subscribers. Research found that the key demographic for the app was between 18 and 34, yet that hasn’t quite helped the network grow. [14] Discovery also announced that they will be starting a joint venture to hasten the growth of its Eurosport channel to an online-format as well as new collaborative efforts with Mediacom, Hulu, Sony Corporation, and CBS Corp. Discovery has also launched a joint deal to produce a new digital-only media holding company named Group9. Group9 will be a digital and social media video provider that will have an estimated 3.5 billion views per month. Discovery will own 39% of the entity and have the option to purchase the whole company outright.[2]

The Future?

Discovery has recently partnered with AT&T to expand their streaming services with DirecTV Now. Other networks and program providers like Disney, HBO, Turner, and NBC Universal have signed up to work with AT&T in their new DirecTV Now subscription video on demand (SVOD) program. There will be three streaming options provided. Two will charge a monthly rate, and the third, Freeview, will be ad-supported. There will be a wide variety of content on the streaming service that will vary depending upon which option the subscriber chooses.[16]

BIBLIOGRAPHY

[1]. @Cablefax. “Discovery Upfront.” Cablefax. N.p., 01 Apr. 2016. Web. 29 Nov. 2016.

[2]. “Can Discovery Communications Survive in a Streaming TV World?” NASDAQ.com. N.p., 18 Nov. 2016. Web. 29 Nov. 2016. http://www.fool.com/investing/2016/11/18/can-discovery-communications-survive-in-a-streamin.aspx

[3].”Christian Wheeler.” ReviewForTune. N.p., 18 Nov. 2016. Web. 29 Nov. 2016.

[4]. “Discovery Communications, Inc. – Company Profile, Information, Business Description, History, Background Information on Discovery Communications, Inc.” Discovery Communications, Inc. – Company Profile, Information, Business Description, History, Background Information on Discovery Communications, Inc. N.p., n.d. Web. 29 Nov. 2016.

[5]. “Discovery Communications, Inc.” Discovery Communications Inc. N.p., n.d. Web. 29 Nov. 2016.

[6]. “Discovery Communications, Inc.” Discovery Communications Inc. N.p., n.d. Web. 29 Nov. 2016.

[7]. “Discovery Third-Quarter Earnings, U.S. Ad Revenue Drop.” Surghar Daily. N.p., 03 Nov. 2016. Web. 29 Nov. 2016.

[8]. Editor. “Discovery Taps 560 Media for Rights Revenue Collection.” Rapid TV News. N.p., n.d. Web. 29 Nov. 2016. www.fiercecable.com/broadcasting/discovery-signs-deal-560-media-for-secondary-rights

[9].Hipes, Patrick. “Discovery Channel Greenlights Unibomber Scripted Series & ?Deadliest Catch Spinoff For 2016-2017; Sibling Nets Unveil New Slates Upfronts.” Deadline. N.p., 31 Mar. 2016. Web. 29 Nov. 2016. corporate.discovery.com/discovery-newsroom/discovery-channel-announces-2016-2017-upfront-programming-slate/

[10]. “CNBC Excerpts: David Zaslav, CEO of Discovery Communications, on CNBC’s Closing Bell Today.” CNBC. N.p., 19 Oct. 2016. Web. 29 Nov. 2016.

[11]. @IDAorg. “Two Decades of Discovery, and There’s Still More to Learn.” International Documentary Association. N.p., n.d. Web. 29 Nov. 2016. www.documentary.org/magazine/two-decades-discovery-and-theres-still-more-learn

[12]. Munson, Ben. “Discovery Signs Deal with 560 Media for Secondary Rights.” FierceCable. N.p., 18 Nov. 2016. Web. 10 Nov. 2016.

[13]. “NEWS.” 560 MEDIA. N.p., n.d. Web. 29 Nov. 2016. www.560media.com/news/

[14]. Rossolillo, Nicholas. “Can Discovery Communications Survive in a Streaming TV World?” The Motley Fool. N.p., 01 Jan. 1970. Web. 29 Nov. 2016.

[15]. Street, Active Wall. “Post Earnings Coverage as Discovery Communications Misses Earnings and Revenue Forecast.” Baystreet.ca. N.p., n.d. Web. 29 Nov. 2016. www.baystreet.ca/viewarticle.aspx?id=448707

[16]. https://corporate.discovery.com/wp-content/uploads/2016/11/163002_2016_Q3_AT-A-GLANCE_WEB.pdf

Discovery Communications

Posted on April 8, 2013 by Whembley Sewell

by Whembley Sewell

Logo for Discovery Communications [1]

CONTACT:

One Discovery Place

Silver Spring, MD 20910

http://corporate.discovery.com/

COMPANY OVERVIEW & INFLUENCERS:

President and CEO David Zaslav [14]

Discovery Communications is the leading creator of non-fiction media content in the world.[2] Since its founding in 2005, Discovery’s influence has grown to span over 200 countries across multiple different media platforms.[3] Under the leadership of CEO and President David Zaslav, the company has been experiencing many successes, in the realms of both finance and popularity. The company’s stock has increased 51.1% since the previous year,[13] viewership for their various channels have been at all-time highs with an estimated 1.7 billion subscribers.[15] New ventures are also beginning to break even and gain a strong foothold within the world of cable television.

HOLDINGS & MAJOR SUCCESSES:

From websites, to various cable channels, to magazines, Discovery Communications does it all. Their dedication to providing both entertaining, yet educational and informative content, factor into their overall success with their audiences. They produce material on each of their sites and channels that have worked to generate a large following and strong ratings. Each one of Discovery Communications’ holdings has a loyal group of viewers that are drawn in day and day out by the unique content that Discovery creates.

Logo for Discovery Channel [12]

One of their most notable holdings includes the channel bearing their name, The Discovery Channel. Since its founding in 1985, it has served the purpose of exposing viewers to the inner workings and complexities of the world, be it subjects including technology, history, or science. The Discovery Channel has stationed itself as “the number one media and television brand in overall quality”, providing its audiences with content featuring top of the line cinematography. Some of the programs that are popular now include Deadliest Catch and MythBusters.

A poster for TLC’s hit show “Toddlers & Tiaras” [10]

The Learning Channel, or TLC also stands out amongst Discovery Communications as a heavy-hitter in the world of cable programming. In 1991, when Discovery acquired TLC for $31.5 Million, they used the opportunity to launch more reality programming. Early programs like “Trauma in the E.R” paved the way for other successful reality shows like “Trading Spaces” and “What Not to Wear”. Now, TLC is churning out multiple hit shows like “Jon & Kate, Plus 8”, “Toddlers & Tiaras”, “DC Cupcakes,” “Cake Boss”, and the craze that is “Here Comes Honey Boo Boo”.[9] Though shows like “Toddlers & Tiaras” and “Here Comes Honey Boo Boo” draw in some negative criticism from viewers, many of these non-fiction series and their respective casts have become “worldwide phenomena” that continuously draw ever broadening audiences in to the programming that Discovery Communications has to offer.

CURRENT VENTURES:

Logo for Revision3 [16]

In 2012, as an attempt to cater to the “internet generation”, Discovery Communications acquired Revision3. All of its content exists on Revision3.com, but it can also be viewed on a television. Their also features programming features content that can be accessed on various different mobile devices, and can be found across the internet on sites like YouTube, Dailymotion, and Metacafe. It is estimated that Revision3 rakes in about 23 million viewers, all looking to enjoy the network’s shows about technology, modern culture, and music amongst many other things.[7] Though the site and its extensions rake in an estimated 80 million views monthly, efforts are being made to improve these numbers. In order to increase the popularity amongst their target demographic, Revision3 recently launched an XBOX360 app for easy access. This will allow them to reach over 70 million people,[11] and aligns them with other over the top video services such as Netflix, Hulu, and HBOGO.

Release poster for 3Net [20]

3Net is a revolutionary concept created by world class teams at Discovery and leading studios Sony, and IMAX.[18] The entire channel serves the purpose of creating top of the line, three-dimensional content. 3Net, released in early 2011 and fully launched in late 2012, is now functioning as the first and the only 24/7 3D network.[17] Its unique position as the first channel of its kind allows 3Net to have established one of the “most extensive” libraries of 3D content in the entire world.[19] It has something for everyone, offering a wide range of programming in every genre, be it documentary, action, lifestyle, cuisine, kids and family, or travel.[17] Even though it in its infancy, this network has been well received and has acquired a base of approximately 40 million viewers already. Their distribution affiliates have grown to include companies like DIRECTV, Comcast, and Netflix.[21] In order to provide their increasing influence and generate even more widespread appeal, 3Net has been looking to create the highest quality content. In the works is the development of 4K and UltraHD programming that will provide 3Net’s audience with best grade of entertainment possible.[21]

Promotional poster for the release of Oprah Winfrey’s network, OWN [6]

One of Discovery’s most recent and notable ventures is that of OWN, or Oprah Winfrey Network. OWN, a network with a very female-centric focus, has allowed Discovery Communications to market on Oprah Winfrey’s massive audience and has used Winfrey’s widespread appeal to launch extensions of the world reknown Oprah Winfrey show. Shows such as “Oprah’s Next Chapter”, “Oprah’s Lifeclass”, and “Oprah’s Masterclass” all utilized Winfrey’s fame to springboard her entire network. [4] Unfortunately, OWN was off to a rocky start and its potential for success was questioned early on. After starting with losses of $330 Million and upwards, rumors flew that the network would be quickly axed.[5] Fortunately, Winfrey has recently partnered with other heavy-hitters like Tyler Perry to produce new and diverse releases to draw in bigger audiences. [4] New shows debuting in May, like Perry’s “The Haves and the Have Nots” and “Love They Neighbor”, are OWN’s first ventures into scripted series, which hopefully will help them to bring in more viewers and compete with other networks with largely female audiences like Bravo and Lifetime.[8]

WORKS CITED:

[1] http://media.corporate.discovery.com/blog/wp-content/uploads/2012/04/DISC-COMM-pos-4c.png

[2] http://corporate.discovery.com/our-company/overview/

[3] http://www.reuters.com/finance/stocks/companyProfile?symbol=DISCA.O

[4] http://www.oprah.com/own

[5] http://www.dailymail.co.uk/news/article-2140773/Oprahs-OWN-network-Losses-approach-330m-amid-predictions-axed-year.html

[6] http://www.mediabistro.com/prnewser/files/2011/01/OWN.jpg

[7] http://corporate.discovery.com/brands/revision3/

[8] http://online.wsj.com/article/SB10001424127887324391104578225750715281798.html

[9] http://www.businessinsider.com/history-of-tlc-from-learning-channel-to-honey-boo-boo-2012-11?op=1

[10] http://www.canadianfreestuff.com/wp-content/uploads/2012/07/Toddlers-300×225.gif

[11] http://www.reelseo.com/revision3-xbox-360-perfect-match/

[12] http://www.vivatv.ro/wp-content/uploads/2011/12/discovery-channel-logo.jpg

[13] http://www.deadline.com/2013/04/discovery-david-zaslav-2012-compensation-salary/

[14] http://www2.pictures.zimbio.com/gi/Summer+TCA+Tour+Day+3+Di10W00Q6aql.jpg

[15] http://www.reuters.com/finance/stocks/companyProfile?symbol=DISCA.O

[16] http://media.corporate.discovery.com/blog/wp-content/uploads/2012/08/revision3-logo.jpeg

[17] http://press.discovery.com/us/3n/info/

[18] http://corporate.discovery.com/brands/us/3d-network/

[19] http://www.3net.com/about

[20] http://www.adweek.com/files/cable.3NET_SONY.ad.jpg

[21] http://corporate.discovery.com/discovery-news/3net-marks-second-anniversary-dramatic-growth-cons/

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Tag Archives: Non-Fiction

Discovery Communications