Discovery, Inc.’s first quarter earnings fell well short of Wall Street estimates Wednesday (April 28) with the media company posting a 63% drop in net income to $140 million, down from $377 million in Q1 2020.
Revenues, meanwhile, rose 4% to $2.79 billion year on year, matching forecasts.
President and CEO David Zaslav said Discovery+ — which launched in January – currently has 15 million total paying direct-to-consumer subscribers, having crossed the 13 million mark at the end of March.
The non-fiction streamer has rolled out on Comcast Xfinity and Amazon Prime Video Channels in the U.S., Starzplay in MENA, and on Samsung Smart TVs and Amazon Fire TV devices in the U.K. and Ireland.
Total U.S. networks revenues increased 3% to $1.81 billion compared to the year-ago quarter. Ad revenue decreased 4%, which Discovery largely attributed to lower overall ratings, while also citing “secular declines in the pay TV ecosystem and lower inventory.”
That dip was partially offset by higher pricing and the monetization of content offerings on Discovery’s platforms — primarily Discovery+ and TV Everywhere — the company stated in its fiscal update.
Distribution revenues, meanwhile, increased 12% following the launch of Discovery+, partially offset by a decline in linear subscribers.
As of March 31, subscribers to Discovery’s linear networks were 2% lower and total linear subscribers were 4% lower compared to the prior year quarter.
On the international side, total revenues increased 7% to $987 million. Ad revenue provided a rosier picture than the domestic numbers, as it climbed by 16%. Distribution was flat with a 2% decrease.
“The global rollout of Discovery+ is off to a fantastic start by any measure. Key metrics, including subscriber additions, customer engagement, and retention, are exceeding our expectations and demonstrating sustained momentum into the second quarter,” Zaslav said in a statement. “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. We continue to expand the reach of Discovery+ with recent launches on Comcast Xfinity and Amazon Prime Video Channels. At the same time, we continue to extend our overall engagement with viewers across screens, anchored by another quarter as the most-watched pay-TV portfolio in the U.S. and our seventh consecutive quarter of international share growth.”
DISCOVERY+, PLIMSOLL PREP MEET THE MEERKATS
In related news, Discovery+ is set to premiere Plimsoll Productions’ Meet the Meerkats this May.
Narrated by actor and comedian Rob Delaney, the series travels to the Kalahari Desert in South Africa where three rescued meerkat families (mobs) are learning the way of life in the wild for the very first time.
Premiering May 8, Meet the Meerkats follows the journey of three rehabilitated mobs, most of whom were snatched from the wild as pups and returned to their home in Africa after being rescued from the illegal wildlife trade.
For Plimsoll, Martha Holmes serves as executive producer, Riaan Venter is director of photography and Virginia Quinn is showrunner. For Discovery+, Howard Swartz is executive producer with Joe Mazzeo as coordinating producer.