Discovery Q1 Profit Tumbles On Content Investment While Streaming Subscribers Top 13 Million

Discovery revealed the big challenge behind getting involved in the media industry’s streaming wars: A new broadband hub can bring in millions of new customers — but it also requires millions of dollars in investment.

The New York owner of Food Network, HGTV, TLC and its flagship Discovery cable outlet said Wednesday that its first-quarter profit slumped after it ramped up spending for content and marketing related to Discovery Plus, the streaming-video outlet it launched in the U.S. on January 4. The company said it attracted 13 million direct to consumer customers in the first quarter, and had reached 15 million of those customers overall, though it did not specify how many of them were signed directly to its new outlet.

Net income in the first quarter fell 63%, to $144 million from $377 million, even as revenue for the period rose 4% to $2.79 billion from $2.68 billion in the year-earlier period.

“Our strong direct-to-consumer performance underscores the outstanding value and appeal of our content, brands and personalities to both consumers and distribution partners alike,” said Discovery CEO David Zaslav in a prepared statement.

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