US, global revenues rises make strong Q3 for Discovery | Major Businesses | Business
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Discovery has emerged from a period of corporate restructuring to deliver a solid third quarter of fiscal 2019 that has shown healthy revenue growth in both the US and international markets and which has shown signs of future digital profits.
discovery 6 august 2019
For the quarter ended 30 September 2019, Discovery generated total revenues of $2.678 billion, increasing 3% year-on-year, or 5% excluding the impact of non-dollar currency fluctuations (ex-FX). US advertising revenues increased 3% to $1.725 billion and distribution increased 6% on an annual basis, while international advertising revenues increased 10% and distribution increased 8%. Net income increased to $262 million while adjusted OIBDA increased 6% to $1.126 million, 9% ex-FX.

Looking at the US in depth, advertising growth was primarily driven by increases in pricing and to a lesser extent, the continued monetisation of digital content offerings and inventory. It was and partially offset by lower overall ratings and the impact of audience declines on the linear networks. Growth in distribution was primarily driven by increases in contractual affiliate rates and additional carriage on streaming platforms, partially offset by the impact from a decline in overall subscribers.

Operating expenses decreased 7% to $720 million as the costs of revenues decreased primarily due to content synergies related to the integration of Scripps Networks. On an interesting note, Discovery’s total subscriber portfolio for September 2019 was 4% lower than September 2018, while subscribers to the fully distributed networks were 1% lower.

The third quarter results also showed that for international networks, revenues increased 4% to $950 million, up 9% ex-FX. Growth in advertising was primarily driven by the consolidation of the UKTV Lifestyle Business, expansion of digital content offerings and to a lesser extent, higher pricing in certain markets in Europe. Ex-FX, growth in distribution was driven by certain content licensing arrangements, contractual price increases and new channel launches in the Latin America region, increases in digital licensing revenues and growth in Europe related to increases in pricing and monetisation of digital content offerings. Overall operating expenses increased 8% to $713 million.