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Discovery, led by CEO David Zaslav, said on Tuesday that it has now reached 18 million paying streaming subscribers worldwide to its direct-to-consumer services, including Discovery+, after ending June with 17 million.
In late April, it had reported 15 million paying users.
In its third earnings report since the Discovery+ launch early in the year, the company on Tuesday also disclosed improved advertising revenue, including a second-quarter gain of 12 percent in the U.S. and an 88 percent jump in its international business, or 70 percent excluding foreign-exchange impacts.
The U.S. ad gain was “primarily due to higher pricing, the continued monetization of content offerings on our next-generation platforms, and higher inventory, partially offset by lower ratings and, to a lesser extent, secular declines in the pay-TV ecosystem,” said the company.
Discovery said it “completed a successful 2021-2022 U.S. advertising upfront, delivering the largest revenue upfront in the company’s history, including more than doubling the revenue of Discovery Premiere, our cross-network, cross-platform advertising package, and Discovery Engage, our advanced advertising solution.” And Zaslav on Tuesday lauded upfront ad rates that were “well ahead of (its) peer group.”
U.S. distribution revenue increased 12 percent in the second quarter, “primarily driven by the launch of Discovery+ in January 2021 and increases in contractual affiliate rates, partially offset by a decline in linear subscribers and certain non-recurring items recognized in the prior-year quarter.”
Also in Tuesday’s earnings update, Zaslav commented on the Tokyo Olympics, to which Discovery has the rights in Europe. “Our first Summer Olympic Games have thus far been a success, supporting healthy viewing and subscriptions across both our linear and streaming platforms, and underscores the importance of our commitment and investment in marquee IP,” he said.
The Discovery+ streaming service launched in the U.S. on Jan. 4 with a monthly price of $4.99 with ads and $6.99 without ads. It has also been rolling out in international markets.
As far as the Olympics go, Discovery touted “record engagement,” saying that “more than 275 million viewers have watched the Games so far. Over 100 million of those have watched through Discovery’s coverage on TV and digital, and an additional 175 million more have watched the Games through Discovery’s sub-license agreements with partner free-to-air broadcasters around Europe.”
Discovery continued: “The opening week of the Olympic Games saw record numbers visit Discovery’s digital platforms in Europe to enjoy every unmissable moment of Tokyo 2020. The desire of viewers to personalize their experience, by choosing to watch any of their national heroes or favorite sports, has seen new digital subscriptions in the first week of the Games reach double the total acquired around Olympic Winter Games PyeongChang 2018.”
It added: “Almost three-quarter of a billion streaming minutes of Olympics content has been consumed on Discovery+ and Eurosport subscription services during the first week, nearly 18 times more than by the same stage of PyeongChang 2018.”
And Discovery said: “Large linear TV audience share, demonstrating the widespread interest in these Games, has been seen across the Nordic markets where Discovery is presenting the Games on its free-to-air networks. Shares as high as 78 percent in Norway (handball, Spain vs. Norway); 67 percent in Sweden (soccer, Sweden vs. Australia); and 60 percent in Sweden (swimming) have been recorded.”
On Tuesday’s earnings call, Zaslav lauded “some fantastic traction” during the Olympics so far, calling it “a very pleasant surprise” amid a challenging situation due to the coronavirus pandemic. He also described the Summer Games as a “super funnel” event for the company’s brands. He added that the firm was “very excited” about the upcoming Olympics in Beijing, where he said the company sees a chance to retain subscribers given it is coming up in February, and Paris.
Overall, Zaslav called the Olympics execution “almost flawless.”
Also during the call, Zaslav lauded the “strong” subscriber traction of Discovery+ and its healthy average revenue per user. And he said further key international service launches later this year will come in such markets as Brazil and Philippines.
Discovery’s total second-quarter revenue rose 21 percent to $3.06 billion, including nearly $400 million of next-generation revenue, as the business rebounded after a big coronavirus pandemic hit in the year-ago period. Quarterly earnings rose from $271 million to $672 million.
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