Discovery, Inc. revenues were up 21% to US$3.06 billion in the second quarter as direct-to-consumer subscribers topped 18 million today (Aug. 3).
The company reported 17 million DTC subscribers at the end of the quarter, rising from 15 million in Q1.
Discovery’s Q2 fiscal update comes almost three months after it was announced that the mass media giant would be merging with AT&T’s WarnerMedia, with Discovery chief David Zaslav (pictured) at the helm. The deal to form Warner Bros. Discovery is expected to close in 2022.
Net income was $672 million, a sharp increase from the previous quarter, which saw the company’s income drop 63% to $140 million.
Total U.S. Networks revenues increased 12% to $1.97 billion compared to the prior year quarter. Advertising revenue and distribution both increased 12%.
Discovery attributed the gains in ad revenue to higher pricing, the monetization of content offerings on its next generation platforms and higher inventory, partially offset by lower ratings and secular declines in the pay-TV ecosystem. The rise in distribution revenue, meanwhile, was largely due to the launch of Discovery+ in January 2021 and increases in contractual affiliate rates, partially offset by a decline in linear subscribers and certain non-recurring items recognized in the prior year quarter.
Subscribers to Discovery’s fully distributed linear networks were 3% lower than the previous year, while linear portfolio subscribers were 7% lower.
The company’s linear portfolio includes HGTV, TLC, Investigation Discovery, Animal Planet and others.
Total International Networks revenues, meanwhile, were up 40% to $1.09 billion, as advertising revenue increased 88% and distribution revenue increased 11%.
“Discovery delivered very strong results this quarter as we executed well amidst a recovering global advertising market. Advertising revenue increased in every region of the globe and accelerated throughout the quarter, particularly in our International segment as revenue increased 70%. Indeed, many key markets such as the UK, Italy, Germany, as well as a number of Latam and APAC markets, all demonstrated a marked resurgence and finished ahead of 2019. We continued to steadily execute in our emerging next generation businesses, with 17 million paying direct-to-consumer subscribers at the end of the quarter, and 18 million as of today,” Zaslav, president and CEO of Discovery, said in a statement.
” We continue to fire on all cylinders, and I am very pleased with our momentum as we work to complete our transformational WarnerMedia transaction.”