Discovery plans to reach 3BN global subs in 2015 | Media Investment | Business | News | Rapid TV News
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Discovery Communications would like to reach 3 billion cumulative worldwide subscribers by the end of the year.

That’s the word from its first Investor Day, held this week in New York City to discuss strategies to drive that growth and create shareholder value.
“Discovery Communications is like no other media company in the world, with an average of ten channels across more than 220 markets and we are well positioned for near- and long-term growth,” said David Zaslav, president and CEO, Discovery Communications. “The company stands out in the marketplace due to our efficient global content model; unrivaled international infrastructure run by local teams; and a strong growth position in the US. We are confident in the long-term outlook for our business and foresee continued growth in the years ahead, which we expect will produce significant free cash flow and value for shareholders.”
Zaslav highlighted five key differentiators for Discovery’s growth potential: the company’s portfolio of assets; ownership/control of a growing and diverse portfolio of content and IP that uniquely positions Discovery for the changing media landscape that includes more digital; a strong international distribution platform; a cost-flexible, stable US business that yields continued free cash flow growth; and a strong financial outlook.

Discovery Networks International has been the growth engine for the company of late, and the division has a three-part strategy: grow audience and share; own and control must-have IP; and create and expand powerful and loved brands.

As reported, Jean-Briac Perrette, president, Discovery Networks International, described how Discovery's strategy will hinge on leveraging exclusive content around the world will support the division's continued strong growth.

But aside from Europe, Fernando Medin, GM for Brazil and Southern Cone, gave an overview of the Latin America region, which has some of the fastest growing pay-TV markets in the world. Discovery was an early entrant in Latin America, and has an established leadership position with leading genre categories, including male nonfiction, lifestyle and kids, which presents a unique opportunity for multiplatform growth, the company said.

Medin highlighted Brazil, where Discovery has a portfolio of 11 channels and is very well positioned, and where Discovery Kids is both the No. 1 channel for kids and the number No. 1 pay-TV network overall, because of the cultural differentiator of high co-viewing. Discovery is also prepping the upcoming launch of an authenticated TV Everywhere offering for Discovery Kids in Latin America, called Discovery Kids Play.
Medin said he expects Discovery will continue to outperform across Latin America in terms of subscriber growth, subscription revenue growth and advertising growth.
Meanwhile, CFO Andrew Warren discussed the cost-flexible nature of Discovery’s US business, with 79% of the segment’s content spend, its single largest expense, involving contracts of less than 12 months. Warren also spoke to the US’s stable financial profile and ability to continue to drive AOIBDA growth.
Domestically, Discovery Channel also nabbed the No. 1 ranking this summer among males aged 25-54 — a fact that will provide an ongoing platform for growth.

Overall, the company expects a low double-digit, constant currency-adjusted EPS CAGR from 2015 to 2018, and low double-digit free cash flow CAGR from 2015 to 2018.

"Third quarter results are on track, highlighted by strong US advertising growth," Warren said. "We are pleased that we are delivering on our 2015 commitments and are confident that we are well positioned to continue to grow adjusted EPS in the long-term. In addition, our model generates significant free cash flow, and we expect to have approximately $10 billion in available capital over the next five years."