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Discovery is “very happy” with the integration of Scripps Networks Interactive after its acquisition and how the mega-deal provided the company an opportunity for “transformation,” CFO Gunnar Wiedenfels said Wednesday at an investor conference.
“We have achieved a lot of what we planned to do, in many areas we have overachieved,” Gunnar Wiedenfels told the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills in a session that was webcast. He said the planned cost savings of $600 million, which the firm had increased from $350 million originally, have “pretty much” been reached, with “more initiatives in the pipeline.”
Discovery, led by CEO David Zaslav, last year closed its $14.6 billion acquisition of Scripps Networks Interactive, further boosting its strength in lifestyle and non-scripted content.
Wiedenfels on Wednesday answered a question about Discovery’s interest in potential further deals — with some having suggested that once Viacom and CBS Corp. complete their merger the enlarged company could eye a combination with Discovery — by saying: “We are looking at every opportunity in the market. … And obviously, we would all take another Scripps-like acquisition any day. But the reality is … it’s not that easy to find something that really changes the game again for us as the Scripps acquisition has.”
He added, “There is no real value in just adding scale.”
Wiedenfels was on Wednesday also asked about Discovery’s 69 percent stake in the Food Network, with Tribune, which has agreed to be acquired by Nexstar, owning the rest, saying the company was “very comfortable” with the ownership setup that “works very well for us,” meaning there was “no immediate need” to restructure. He added that buying out the remaining stake could be interesting if a deal happened “at very attractive price.”
Zaslav has touted that Discovery dominates the part of the global TV business not focused on scripted fare, such as dramas. “There’s only one company playing at our level in the other half of the content pie,” he recently said of Discovery. Wiedenfels on Wednesday also touched on that topic, highlighting Discovery’s $400,000 per hour content cost, compared with $5 million-plus, in some cases, for scripted shows.
With various media and entertainment giants launching streaming services, Wiedenfels said Discovery’s programming strategy will be “very stable.” Said the CFO: “For someone like Discovery owning a lot of content this is great times.” He also highlighted Discovery will continue to serve super-fans. “It’s more like the specialty store rather than the supermarket approach,” said Wiedenfels.
The German Discovery CFO also answered a question about a new TV measurement partnership with Kristin Dolan’s measurement company, 605, taking a swipe at TV ratings measuring giant Nielsen. Wiedenfels said that he was surprised when he moved “to the No. 1 TV market in the world just to find out that … Nielsen is still using paper diaries for measurement.”
Arguing that panel-based measurement will increasingly be replaced with new forms of data, he said that “data-driven advertising is probably the single largest opportunity we have for TV advertising in general, especially for Discovery.”
Concluded Wiedenfels: “Together with Kristin’s company, we’re able to combine data from 40 million TV households through set-top box data with a lot of additional data sources that they have lined up to be able to look at attribution across the entire funnel from the very beginning to the sales impact at the end of the funnel, which historically is something that hasn’t been possible and it’s going to give us the opportunity to show all our advertising clients the real value of TV advertising.”
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