International is Discovery’s Growth Engine
Discovery Communications has been expanding aggressively overseas in recent years and now sees more revenue growth from international operations than domestic ones. The cable channel owner, whose properties include Discovery Channel, TLC and Animal Planet, has been expanding overseas aggressively in recent years. Overseas division became a bigger driver of revenue than the U.S. business, distribution revenue climbed 24% and advertising revenue rose 7% in the international market, primarily on better delivery in western Europe and higher volume in Latin America.
Discovery plans to keep investing heavily in content, particularly in programming that reflects its new status as a global TV player. Discovery (NASDAQ: DISCA) has recently signed three large deals, including an agreement for exclusive coverage of the Olympic Games in Europe, an agreement to acquire full ownership of pan-European sports network Eurosport and a long-term renewal with Comcast
Discovery’s 30-year history of being the global leader in non-fiction content makes the company uniquely positioned to capture and deliver the remarkable stories and characters associated with the Olympic Games. With almost half of Eurosport‘s existing programming being Olympic sports, the combination of its strong legacy in winter sports, cycling, tennis and athletics, and now the Olympic Games, will allow Discovery and Eurosport to engage passionate fans around these key sports 365 days a year. Discovery’s strategy to grow the Eurosport brand; expand the audience and reach of Eurosport; and plans to leverage sports to meaningfully drive revenue across the entire portfolio. Eurosport’s leadership position on air, online and over the top is unrivaled, giving Discovery a unique advantage and opportunity to drive growth.
Discovery acquired the exclusive rights to broadcast the Olympic Games in Europe, valued at EUR 1.3 billion, across all platforms, including free-to-air television, subscription/pay-TV television, internet and mobile phone in all languages across 50 countries and territories on the European continent. The agreement covers the XXIII Olympic Winter Games in PyeongChang in 2018, and the Games of the XXXII Olympiad in Tokyo in 2020 as well as the Olympic Games in 2022 and 2024, the host cities of which have yet to be elected. Consistent with IOC and local market requirements, Discovery has committed to broadcasting a minimum of 200 hours of the Olympic Games and 100 hours of the Olympic Winter Games on free-to-air television during the Games period. Discovery will sub-license a portion of the rights in many markets across Europe.
International expansion is now Discovery’s growth engine. The key is in targeting the right opportunities in a hugely unpredictable media landscape. Continuing the expansion of its footprint in European market, Discovery Communications has announced; Turkish media giant Dogus Media Group will become the company’s ad sales rep in the country under a strategic partnership. As part of this partnership, Discovery takes over Dogus-owned free-to-air news and entertainment network CNBC-E. The acquisition marks Discovery’s first step into the Turkish free-to-air segment. Discovery’s TLC will be replacing CNBC-e and launch in Turkey in November. Dogus will also be responsible for selling Discovery’s entire commercial portfolio, including local versions of Discovery Channel, Animal Planet and Discovery Science, as well as securing sponsorship opportunities from Turkish advertisers.
Discovery Communications is like no other media company in the world, with an average of 10 channels across more than 220 markets and well positioned for near- and long-term growth. Discovery’s unique global and local infrastructure with a low-cost model that leverages content around the world will support the division’s continued strong growth, including continued meaningful increases in pay-TV global subscribers and earning more for multichannel advertising.