Discovery makes disappointing start to fiscal year | Major Businesses | Business
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In the face of what the company says are unprecedented global challenges, Discovery Inc has reported first quarter results showing decreased revenues and profits.
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For the quarter ended 31 March 2020, the company posted total revenues of $2.683 billion, down 1% year-on-year with US business bringing in $1.756 billion, flat compared with the same period in 2019, and intranational networks $923 million, a fall of 3%.

In the US, advertising was flat, primarily attributed to increases in pricing, the continued monetisation of content offerings on next generation platforms, and higher inventory, offset by lower overall ratings and secular declines in the pay-TV ecosystem. Distribution revenues increased 2%, primarily driven by increases in contractual affiliate rates, partially offset by a decline in linear subscribers. Total operating expenses increased 7% to $740 million.

Total portfolio subscribers for March 2020 were 6% lower than March 2019, while subscribers to the fully distributed networks were 4% lower. The first quarter of 2020 was the first full quarter in which the company’s networks lapped carriage on certain virtual multichannel video programming distributors.

For international networks, the 3% annual revenue decrease, consistent ex-FX, was based on flat advertising, primarily driven by contributions from the UKTV lifestyle business and growth in our next generation initiatives, offset by the discontinuation of certain pay-TV distribution agreements in the Nordics, and the impact of Covid-19 in key advertising markets. Ex-FX, distribution increased 1%, primarily driven by content licensing arrangements and higher affiliate rates in the Latin America business unit, as well as monetisation of next-generation initiatives in Europe and Asia. This growth was partially offset by the discontinuation of certain pay-TV distribution agreements in the Nordics, and lower contractual rates in certain European markets.

Commenting on the first quarter results, Discovery president and chief executive officer David Zaslav said: “As we navigate through the remainder of 2020, our priority remains on the well-being of our employees, clients, customers, and production partners. Furthermore, we will continue to focus on maintaining a healthy balance sheet with robust liquidity and investing in our businesses to position ourselves for long-term growth amid the changes in the pay-TV landscape."