Discovery Communications posted modest third-quarter gains led by its international portfolio, while Stateside networks grew more modestly and saw continued subscriber losses.
The owner of major cable networks like Discovery and TLC said total revenue of $1.65 billion was up 6% from the year-earlier quarter. Net income of $218 million was up 14%, but without accounting for currency exchange rates it was actually flat with a year ago.
U.S. networks’ revenues for the third quarter rose 4% to $823 million, paced by a 6% rise in distribution and 3% in advertising. The gains in distribution came from higher affiliate fee rates and increases in content licensing revenue, partially offset by a decline in affiliate subscribers. Total portfolio subscribers declined 5% in the quarter, while subscribers to fully distributed networks declined 3%.
Like other programmers, Discovery is battling the erosion of traditional TV viewing as consumers seek out video content through means other than the traditional cable bundle.
Higher affiliate rates in Europe were a key part of Discovery’s international story in the quarter, stemming from Discovery’s investment in sports content and higher affiliate rates in Latin America.
CEO David Zaslav described the results as “solid” and said the company was eager to leverage the portfolio of Scripps Networks Interactive, which it paid $14.6 billion to acquire over the summer. “We are excited by the prospects for a combined Discovery and Scripps as we continue to make progress on the transaction to create a global leader in real life entertainment,” Zaslav said in the company’s earnings release.Let's