Discovery For Sale?

Discovery must be in play after AT&T’s recent takeover of Time Warner with its Warner Bros, HBO and Turner programming assets.

The newly combined Discovery Scripps venture is valued at more than $34 Bn.

That is a stratospheric achievement for a company that forged its initial connection with viewers via off-the-shelf acquisitions like Australian lizard-specialist Harry Butler.

Discovery is now a global programming force, with deep interests in Sports and General Entertainment.

However, Discovery lacks scale compared with its giant competitors in the age of online video.

Source: Y-Charts

For Sale?

The signals coming from Discovery send a “For Sale” message.

  • Costs are under the heaviest scrutiny, led by the biggest category – programming.
  • According to producers and agents, the green-lighting process is slow and with added levels of approval.
  • A “Coach Class Only” rule inhibits execs from investing in the relationships that develop the signature Factual programs that breathe life into the Discovery brand.
  • Who is going to squeeze into the back of the plane every few weeks for a long-hauler that’s intended to keep the premium pipeline refreshed?
  • These and other strict cost disciplines bolster the cash flow that boosts Discovery’s already-fantastic gross margins and hence valuation.

Who will buy Discovery?

I don’t know.

  • Discovery’s suite of channels is distributed worldwide.
  • Its programming library and rights, access to talent, brands (and much, much more) — these are all qualities that will attract a buyer and take the company into the revolutionary era of Online Video.
  • I won’t forget that Harry Butler is in its DNA.

Sunny Side Case Studies

I’m heading off today to Stockholm and then to La Rochelle for Sunny side of the Doc.

Next: The Anti-Case Study

A Tragic Loss

My Upcoming Markets & Conferences

SUNNY SIDE OF THE DOC La Rochelle, France. June 25-28 Panel: “The Future of Pubcasters: Adapt or Die”

NEWF: Nature, Environment & Wildlife Filmmakers Congress
Durban, South Africa. July 16-18. Director Noel Kok has organized a great program that combines conservation and wildlife film-making. Make it your reason to come to South Africa. More to come….

Podcasts

Going home after a hard day’s work at Sunny Side