Discovery, Inc.’s U.S. ad revenue dropped 20% in April as the COVID-19 panic took hold but May and June look sbetter. The highly international company’s board will be looking carefully …
put the blame for subscriber erosion on linear TV squarely at the feet of bundles jammed with costly sports.
In a wide-ranging investor call following strong quarterly earnings, Zaslav and CFO Gunnar Wiedenfels discussed Olympic advertising ; surging ratings for its brand of cooking, DIY and comfort programming; this year’s odd; continued work with cable operators on a DTC product; and restarting production.
“Those were 14 of the toughest days of my life,” Zaslav said, recalling the daily updates. “You feel it because they got sick coming to work. “We don’t want to push anyone back into the field. … We aren’t in any rush to get back to those calls, because we couldn’t breathe.” The employees recovered, he said.
On sports, Zaslav urged “a rationalization of the market, particularly at the moment we are in a recession,” noting that much cheaper bundles are available in many other countries. “If you took sports out, you could very easily do that here” and “we would likely see a turnaround in the issue of subscribers losses.” Today the offer is, ‘Take it for $80 take if for $100 or don’t take it at all,” he said. “Give America a chance to buy what it wants with out stuffed sports.
On the advertising front, sales that were down 20% in April are looking up slightly for May and June, although Wiedenfels cautioned that cancellations are coming in on a rolling basis so investors should take the outlook “with a grain of salt.”
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