International nets drive growth at Discovery

Double-digit growth at Discovery’s international networks helped drive overall revenue and profit growth at the channel operator.

Discovery’s full-year revenues increased 8% year-on-year, taking the total to US$4.5 billion. International networks contributed US$1.6 billion of the total, a 13% year-on-year uptick. The company’s US nets generated US$2.7 billion, a 5% increase on the previous year.

Discovery said that international growth was driven by an 11% increase in affiliate fees and a 13% rise in advertising revenue. Overall viewing numbers increased by 25% across the international bouquet of channels.

“Our content investment strategy is generating real momentum across our domestic portfolio, and the increased market share is translating into sustained financial growth,” said company CEO David Zaslav on an analyst call. “The same story is playing out internationally. We have made targeted content investments globally to capitalize on our unparalleled distribution platform. And as a result, we are increasing our share to grow on pay TV universe and capturing more and more advertising dollars.”

David Zaslav

Discovery acquired the SBS Nordic networks and a share of Eurosport late last year.

“These are well-positioned channels that complement our non-fiction networks in terms of genre appeal and demographic reach,” said Zaslav. “We believe the combination of these two businesses will create nice synergies while strengthening our relationships with existing advertisers and affiliate partners.”

Discovery’s international president and CEO Mark Hollinger added that there is a specific opportunity to roll out new channels in Sweden following the SBS deal. He said: “I think that there is probably [an opportunity] in Sweden where TLC has been a bit under-distributed and where the SBS portfolio is smaller than it is in the other markets, we do have a chance for a new channel or two in the Swedish market.”

Separately, Zaslav added that OWN: Oprah Winfrey Network will hit its previously stated goal of breaking even in the second half of 2013.

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