Discovery plots second free channel
15 FEBRUARY, 2017 | BY MANORI RAVINDRAN
Discovery is to launch a second free-to-air channel in the UK, following its acrimonious carriage deal negotiations with Sky.
In the international broadcaster’s full-year earnings call, Discovery Communications chief executive David Zaslav revealed the agreement with Sky “includes new opportunities to launch new channels and services” in the UK and Germany.
Zaslav unveiled plans for a second free-to-air channel to tap into Discovery’s “strong existing IP to reach more viewers in the UK market” and generate revenue in 2017.
Discovery launched free-to-air channel Quest in 2009. The channel, which sits on Freeview channel 37 alongside a +1 service, features a range of Discovery shows including Deadliest Catch [pictured], Salvage Hunters and Wheeler Dealers.
Plans for the forthcoming channel have emerged weeks after Discovery and Sky reached an 11th hour deal to keep channels including Discovery Channel, Eurosport and TLC on the pay-TV platform.
Zaslav claimed that while Discovery did not “look forward to potential carriage standoffs”, the Sky agreement reaffirmed the value of its portfolio of channels and engagement of fans.
He also identified Eurosport Player, the direct-to-consumer SVoD service, as an opportunity to further Discovery’s “Sports Netflix” strategy.
“The team is building bottom-up, country-by-country, business plans with custom pricing and packaging, tailored to the rights we have in each market,” he said. “Early results in testing various consumer packages are promising, including in the UK, where we have seen 150% increase in subscribers in the market.”
International revenue dip
Discovery Communications’ international business saw a slight dip in revenues due to currency fluctuations and its SBS Radio sale, while the domestic business grew by 5%.
The non-American division reported revenue of $3.04bn (£2.4bn) in the twelve months to the end of 2016, down from $3.1bn (£2.5bn) the previous year.
Meanwhile, the US networks drew revenue of $3.3bn (£2.6bn) for the year, up $3.1bn (£2.5bn) the year prior.
Overall, Discovery’s revenues grew 2% to $6.5bn (£5.2bn), up from $6.4bn (£5.1bn) in 2015.
Within the international division, distribution revenues – excluding the impact of currency effects – grew 10% due largely to higher affiliate rates in Europe and Latin America and subscriber growth in Latin America, as well as contributions from Eurosport France.
Operating expenses for international increased 3% - or 9% excluding the impact of foreign currency fluctuations and the SBS Radio sale - due to increased sports content and production costs, higher content impairment charges in Northern Europe, and higher personnel and marketing costs.
News that was too big for the Freeview thread - Discovery is now planning a second FTA channel to complement Quest.
Wonder how this will turn out - Quest+1 could get shunted off the Freeview platform to make way for this new channel, but Discovery can still manage to get Quest+1 on COM8, if anything.