Discovery Passes 11M Streaming Subscribers, Topping Estimates, But Q4 Revenue Stalls On Pay-TV Fade

Discovery said it has passed 11 million direct-to-consumer streaming subscribers and will reach 12 million by the end of February, a gain of about 7 million subscribers since December.

The parent of cable networks HGTV, TLC, Food Network and the Discovery Channel launched streaming service Discovery+ on January 4 in the U.S. and is rolling it out globally. Executives have not provided a specific target number of subscribers but have described the service as a valid complement to Netflix, which has surpassed 200 million paying customers around the world. Verizon has signed on as a key distribution partner, bundling one year free of Discovery+ with many customer plans.

The streaming numbers came as the company reported flat revenue for the fourth quarter of just shy of $2.9 billion and diluted earnings of 76 cents a share. The revenue number exceeded Wall Street analysts’ forecasts, while the earnings undershot expectations.

The consensus forecast by analysts for streaming was 10.5 million subscribers.

A 5% rise in domestic distribution revenue offset a dip in international distribution and ad revenue.

Advertising was flat, with the company saying that higher pricing and monetization of content on new platforms like streaming were offset by “secular declines in the pay-TV ecosystem and lower ratings.”

Shares in Discovery have recently set an all-time high above $50. They were up 2% in pre-market trading.

“Our unmatched global scale and ability to serve consumers everywhere with a truly differentiated offering across platforms, as well as our robust cash flows, even amidst the significant investments in our next generation initiatives and the ongoing COVID-19 pandemic, position us to achieve sustainable long-term growth and drive long-term shareholder value,” CEO David Zaslav said in the company’s earnings release.

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