Discovery CFO Touts Upfront Ad Outlook: "Dollars Are Moving Back to TV, From Digital"

Andrew Warren - S 2016
Courtesy of Discovery

Andrew Warren - S 2016

CFO Andrew Warren also discusses the company's Olympics monetization strategy with Eurosport and the SVOD licensing business.

Discovery Communications CFO Andrew Warren on Tuesday expressed optimism about the upcoming upfront ad market.

"Going to the broadcast upfronts, scatter volume is strong. Pricing hasn't been better for a couple years now," he said at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco in a session that was webcast.

Warren was also bullish about overall first-quarter 2016 ad sales at Discovery. "It will be up solid mid-to-high digits. We clearly have more momentum on the ad sale side," he told analysts.

That ad market growth is coming in part from advertisers putting more dollars in traditional broadcasting with what Warren claims is better audience measurement. "Anecdotally, ad dollars are moving back to TV, from digital, looking for reach. TV has done a better job of providing metrics beyond the Nielsen guarantees," he told investors.

Warren also discussed Discovery’s deal to acquire the multiplatform rights to the Olympic Games in Europe for its Eurosport network, beginning in 2018. "It was a big swing. We're now the gatekeepers for the Olympics across Europe," he said as Eurosport aims to become a European TV sports powerhouse.

Warren said the Olympics deal would bring positive returns from, in part, sub-licensing deals. Here Discovery and the BBC recently unveiled a long-term deal covering the U.K. TV rights for the Olympics, with the public broadcaster getting the free-to-air rights in Britain through 2024, with Discovery focusing on pay TV coverage.

"That [deal] was significantly better than when we originally modeled the Olympics," he told analysts of the BBC pact. Being an Olympic broadcaster also aims to bring affiliate deal benefits to Eurosport.

"We're already seeing the Olympics being a significant influencer and driver of our bundle deals," said Warren. On the SVOD side, the Discovery CFO touted a recent distribution agreement with Hulu to stream a number of its popular programs on that digital platform.

But don't expect users of other SVODs to view such shows as Mythbusters, The Little Couple and Say Yes to the Dress as Discovery instead focuses on TV Everywhere and Discovery Go. "We'd much rather support either the TV Everywhere platforms, or Discovery Go. Other OTTs really don't make sense for us, with the exception of Hulu," said Warren.