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MUMBAI:
Global broadcaster Discovery's revenue was up eight per cent
to $886 million for the fourth quarter of 2007 and eight per
cent to $3.127 billion for the full year.
The
revenue growth was due to increases in ad revenue of six per
cent for the fourth quarter and eight per cent for the year.
Distribution revenue grew two per cent for the fourth quarter
and three per cent for the year.
Internationally
(excluding the US), its revenue increased by 14 per cent for
the quarter to $309 million and 13 per cent for the year to
$1.03 billion. Operating cash flow increased 132 per cent
to $72 million for the fourth quarter and 37 per cent to $210
million for the year.
The
increase in revenue was due to growth in both ad and distribution
revenue as well as favourable foreign currency exchange rates.
Ad revenue rise primarily reflected higher viewership rates
in Europe and Latin America combined with an increased subscriber
base in markets worldwide, favourable exchange rates and a
full year of activity at DMax in Germany.
European
advertising was improved by splitting network feeds to increase
targeting for local ad sales. Distribution revenue increased
nine per cent for the quarter and eight per cent for the year,
primarily reflecting combined revenue growth in Europe, Latin
America and Asia, and favourable exchange rates. Both advertising
and distribution revenue were partially offset by declines
in the UK due to a difficult ad market and increased launch
amortisation.
In
the US, revenue was flat for the fourth quarter at $504 million
and increased by four per cent for the year to $1.972 billion.
Operating cash flow was impacted by a special fourth quarter
impairment charge of $129 million associated with the company's
channel repositioning and creative team reorganisation. Operating
cash flow was $97 million for the fourth quarter and $774
million for the year.
Ad
revenue at Discovery US increased by 11 per cent for the quarter
and 13 per cent for the year primarily due to improved ad
sell-out rates, better unit pricing and higher audience delivery,
notably on Discovery Channel and TLC. Ad increases were driven
in part by successful programme initiatives at Discovery such
as Planet Earth, Deadliest Catch, Man vs.
Wild, Dirty Jobs and Mythbusters, and shows
at TLC such as Little People Big World, What Not
to Wear.
Distribution
revenue grew two per cent for the quarter and three per cent
for the year, excluding Travel Channel, driven by a six per
cent increase in average paying subscription units for the
year, principally from networks carried on the digital tier.
This was partially offset by an increase in launch amortisation
and marketing consideration, which are contra-revenue items.
Other
revenue increased primarily as a result of increased revenue
from Discovery's representation of Travel Channel.
Discovery's
online digital media businesses now reach 25 million unique
users per month, according to Omniture. As a component of
its digital media strategy, Discovery completed the acquisition
of HowStuffWorks.com in December. This is an online source
of high-quality, unbiased and easy-to-understand explanations
of how the world actually works. This acquisition provides
a platform for promoting and distributing Discovery's extensive
library of programming content and for cross-promotion and
cross-selling opportunities across multiple platforms.
During the year, Discovery also initiated efforts to create
more valuable consumer, advertiser and distribution brands
across its portfolio of emerging networks including:
--
The re-branding of Discovery Times Channel as Investigation
Discovery in January 2008 to leverage Discovery's extensive
library of fact-based investigation and current affairs programming.
--
Discovery recently announced a planned joint venture with
Oprah Winfrey and Harpo to create a new multi-platform venture
designed to entertain, inform and inspire people to live their
best lives. The JV will consist of OWN: The Oprah Winfrey
Network and the Oprah.com website. It is expected that Discovery
Health Channel will be rebranded as OWN in the second half
of 2009.
--
Discovery will launch a new channel in June. Planet Green
will be an eco-lifestyle television network committed to documenting,
preserving and celebrating the planet. Discovery Home will
be rebranded as Planet Green, and will be complemented by
Treehugger.com, acquired in August 2007. The aim is to create
a multimedia platform in the sustainability and environmental
category.
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