Discovery Communications, Inc. (DCI) (NASDAQ: DISCA, NASDAQ: DISCB, NASDAQ: DISCK) is an American global media and entertainment company. The company started as a single channel in 1985, The Discovery Channel. Today, DCI has global operations offering 28 network entertainment brands on more than 100 channels in more than 180 countries in 39 languages for over 1.5 billion subscribers around the globe.[1] Discovery Communications is based in Silver Spring, Maryland.
DCI both produces original programming and acquires content from producers worldwide. This non-fiction programming is offered through DCI's 28 network entertainment brands, including Discovery Channel, Military Channel, TLC, Animal Planet, Discovery Health Channel and a family of digital channels. DCI also distributes BBC America and BBC World News to cable and satellite operators in the United States.
Discovery Communications Inc. (Discovery), incorporated on March 9, 2005, is a global nonfiction media and entertainment company that provides programming across multiple distribution platforms worldwide. It also has a diversified portfolio of Websites and other digital media services, develops and sells curriculum-based education products and services, and provides postproduction audio services. The Company operates in three segments: U.S. Networks, International Networks and Education and Other. Its U.S. Networks segment consists principally of domestic cable and satellite television networks, Websites and other digital media services. International Networks consists primarily of international cable and satellite television networks and Websites. Education and Other consists principally of curriculum-based product and service offerings, and postproduction audio services.
On November 12, 2010, Discovery acquired the remaining 50% interest in the international Animal Planet and Liv, formerly People + Arts, networks from venture partner BBC Worldwide. The acquisition provides the Company 100% ownership of these entities, which deliver programming primarily to audiences in Europe, Latin America and Asia. On September 1, 2010, the Company sold its Antenna Audio business. On February 17, 2010, it acquired all interests in an uplink facility in London. It provides original and purchased programming to more than 1.6 billion cumulative subscribers in the United States and over 180 other countries and territories. It provides services in more than 120 worldwide networks offering customized programming in over 40 languages.
Outside the United States, Discovery has international distribution platforms with two to thirteen channels in more than 180 countries and territories worldwide. Internationally, the Company distributes a portfolio of television networks led by two networks each of which reach more than 150 million cumulative subscribers. The Company’s content spans genres, including science, exploration, survival, natural history, sustainability of the environment, technology, docu-series, anthropology, paleontology, history, space, archaeology, health and wellness, engineering, adventure, lifestyles and current events. On January 1, 2010, the Company realigned its commerce business, which sells and licenses Discovery branded merchandise, from the commerce, education and other reporting segment into the U.S. Networks segment.
U.S. Networks
Discovery’s U.S. Networks segment principally consists of national television networks. U.S. Networks generates revenues primarily from fees charged to operators who distribute its networks, which include cable and direct to home (DTH) satellite service providers, and from advertising sold on its television networks, Websites and other digital media services. Its U.S. Networks segment also generates revenues from affiliate and advertising sales representation services for third-party and venture networks and the licensing of its brands for consumer products. During the year ended December 31, 2010, U.S. Networks generated 63% of its total net revenues. During 2010, distribution, advertising and other revenues were 44%, 52% and 4%, respectively, of total net revenues for this segment.
The Company’s U.S. Networks segment owns and operates nine national television networks principally throughout the United States, including Discovery Channel, TLC and Animal Planet. Effective December 31, 2010, it also owned and operated the Discovery Health network. On January 1, 2011, it contributed the Discovery Health network to Oprah Winfrey Network (OWN), which is a 50-50 venture between the Company and Harpo, Inc. (Harpo). U.S. Networks also owns an interest in The Hub, which is a 50-50 venture between us and Hasbro, Inc. (Hasbro). In the United States, Discovery owns and operates three fully distributed networks that each reaches more than 97 million subscribers and six networks that each reaches 34 million to 70 million subscribers.
Discovery’s U.S. Networks segment owns and operates the Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Military Channel, Planet Green, Discovery Fit & Health, HD Theater, OWN and The Hub, formerly the Discovery Kids network. As of December 31, 2010, Discovery Channel reached approximately 100 million subscribers in the United States. The Discovery Channel network offers a mix of genres, including science and technology, exploration, adventure, history and in-depth, behind-the-scenes glimpses at the people, places and organizations. Programming highlights on Discovery Channel include Deadliest Catch, Mythbusters, Dirty Jobs, Man Vs. Wild, Storm Chasers, Swamp Loggers and Gold Rush: Alaska. Discovery Channel is also home to mini-series, such as Life.
As of December 31, 2010, TLC reached approximately 99 million subscribers in the United States, and approximately eight million subscribers in Canada. Programming highlights on TLC include Cake Boss, Little Couple, What Not to Wear, Police Women, Say Yes to the Dress, LA Ink and 19 Kids and Counting. As of December 31, 2010, Animal Planet reached approximately 97 million subscribers in the United States. Animal Planet provides a range of programming-related to life in the animal kingdom and human interaction with animals. Programming highlights on Animal Planet include Whale Wars, River Monsters, I Shouldn’t be Alive, Fatal Attractions, Pit Bulls and Parolees and It’s Me or the Dog.
As of December 31, 2010, Investigation Discovery reached approximately 70 million subscribers in the United States. Programming highlights on Investigation Discovery include On the Case with Paula Zahn, Disappeared, I (Almost) Got Away With It, Who The (Bleep) Did I Marry? and Extreme Forensics. As of December 31, 2010, its Science Channel reached approximately 67 million subscribers in the United States. Programming highlights on Science Channel include Through the Wormhole with Morgan Freeman, Wonders of the Solar System, How It’s Made, Head Rush, Sci Fi Science, How Do They Do It?, Build It Bigger and Punkin Chunkin.
As of December 31, 2010, Discovery’s Military Channel reached approximately 57 million subscribers in the United States, and approximately one million subscribers in Canada. Programming highlights on Military Channel include Future Weapons, Showdown: Air Combat, Science of War and Top Sniper. As of December 31, 2010, Planet Green reached approximately 56 million subscribers in the United States. Programming highlights on Planet Green include The Fabulous Beekman Boys, Operation Wild, Living with Ed, Conviction Kitchen, Blood, Sweat and Takeaways, and the Reel Impact weekly film series. As of December 31, 2010, its Discovery Fit reached approximately 50 million subscribers in the United States. Programming in Discovery Fit & Health includes Dr. G: Medical Examiner, I’m Pregnant And., The Bronx, Untold Stories of the ER, Bodies in Motion with Gilad, Namaste Yoga, and Shimmy.
As of December 31, 2010, HD Theater reached approximately 34 million subscribers in the United States. Programming highlights on HD Theater include World Rally Championship and Mecum Auto Auctions: Muscle Cars. Upon launch on January 1, 2011, the Company’s OWN channel had reached approximately 75 million subscribers in the United States. OWN is a multi-platform venture, including the OWN television network and Oprah.com. As of December 31, 2010, The Hub reached approximately 60 million subscribers in the United States. The Hub features original programming, game shows and live-action series and specials, including content drawn from Hasbro’s portfolio of entertainment and educational properties and content from Discovery’s library.
During 2010, Discovery formed 3net, which is a venture with Sony Corporation and IMAX Corporation to launch a 24-hours-a-day, 7-days-a-week, three-dimensional (3-D) network in the United States. It provides network services, including affiliate sales and technical support, as well as 3-D television rights to its content and cross-promotion. Its digital media business consists of its Websites and mobile and video-on-demand (VOD) services. Its Websites include network branded Websites, such as Discovery.com, TLC.com and AnimalPlanet.com. Websites also include HowStuffWorks.com, Treehugger.com and Petfinder.com. During 2010, these Websites attracted an average of more than 22 million cumulative monthly visitors.
International Networks
The Company’s International Networks segment principally consists of national and pan-regional television networks. During 2010, International Networks generated 33% of its total net revenues. This segment generates revenues primarily from fees charged to operators who distribute its networks, which consists of cable and DTH satellite service providers, and from advertising sold on its television networks and Websites. The Company’s International Networks segment also generates revenues from license and program access fees for its content. During 2010, distribution, advertising and other revenues were 61%, 34% and 5%, respectively, of total net revenues for this segment.
As of December 31, 2010, Discovery’s International Networks operated over 130 distribution feeds in over 40 languages. International Networks owns and operates a portfolio of television networks, led by Discovery Channel and Animal Planet, which are distributed in virtually every pay-television market in the world through an infrastructure that includes operational centers in London, Singapore and Miami. During 2010, it started the international rollout of TLC as a female-targeted global flagship, which was launched in over 30 countries and territories in Europe and Asia.
Effective January 1, 2011, the Company’s International Networks operated in four regions: Western Europe, which includes the United Kingdom and western European countries; Central and Eastern Europe, Middle East and Africa; Latin America; and Asia-Pacific. International Networks also distributes specialized networks developed for individual regions and markets to 226 million cumulative subscribers, which include Real Time, Turbo and Discovery World; Discovery History, Shed and Quest networks in the United Kingdom; Discovery Civilization and Liv networks in Latin America. In addition, International Networks distributes two Spanish-language networks in the United States, Discovery en Espanol and Discovery Familia, which are distributed to 11 million cumulative subscribers.
Education and Other
The Company’s Education and Other segment primarily include the sale of curriculum-based product and service offerings and postproduction audio services. During 2010, Education and Other segment generated 4% of its total consolidated net revenues. This segment generates revenues from subscriptions charged to public and private Kindergarten through 12th grade (K-12) schools for access to an online video on demand (VOD) service that includes a suite of curriculum-based tools, student assessment and professional development services, publication of hardcopy curriculum-based content and postproduction audio services.
The company started out with just a single channel, Discovery Channel, launched in 1985. In 1991, they acquired their rival The Learning Channel.
In the mid-90s, Discovery Communications started developing several new networks. The first of these to launch was Animal Planet, which was launched in cooperation with the BBC in 1996. In October 1996, four digital networks were launched to take advantage of the then-new digital cable space; Discovery Kids, Discovery Travel & Living Network, Discovery Civilization Network and Discovery Science Network. This was followed by the 1998 launches of Discovery Wings Channel and Discovery Health Channel.
They also bought the Travel Channel in 1997, CBS Eye on People (became Discovery People) in 1998 and The Health Network (became FitTV) in 2001.
Discovery Networks were early to go into high-definition television with the launch of Discovery HD Theater in 2002. With the launch of high-definition simulcasts of Discovery Channel, TLC, Animal Planet and Science Channel in 2007, the original HD channel changed its name to HD Theater.
Starting in the middle of the 2000s, Discovery have been reviewing and overhauling most of their "digital" networks. The networks have evolved from being offshoots of the Discovery Channel, into separate entities with their own identities. The "Discovery" moniker has gradually been dropped from channel names. Some networks had kept the globe in their logo to signal their affiliation to Discovery Networks, but this practice has also been gradually discontinued.
Discovery Networks U.S. operates 13 channels.According to SEC filings, the division "also operates web sites related to its channel businesses and various other new media businesses, including a video-on-demand offering distributed by various cable operators."
OVERALL
Beta: 0.98
Market Cap (Mil.): $11,785.71
Shares Outstanding (Mil.): 278.56
Annual Dividend: --
Yield (%): --
FINANCIALS
DISCA.O Industry Sector
P/E (TTM): 24.60 195.67 13.77
EPS (TTM): 30.14 -- --
ROI: 7.62 3.71 1.32
ROE: 12.00 6.09 2.19
Name Age Since Current Position
Hendricks, John 58 2008 Chairman of the Board
Zaslav, David 51 2008 President, Chief Executive Officer, Director
Singer, Bradley 44 2009 Senior Executive Vice President, Chief Financial Officer, Treasurer
Hollinger, Mark 51 2009 President and Chief Executive Officer - Discovery Networks International
O'Neill, Eileen 2011 Group President - Discovery and TLC Networks
Kaplan, Marjorie 2011 President - Animal Planet and Science Networks
Ligouri, Peter 50 2010 Senior Executive Vice President, Chief Operating Officer
Colan, Thomas 55 2008 Executive Vice President, Chief Accounting Officer
Alpert-Romm, Adria 55 2008 Senior Executive Vice President - Human Resources
Campbell, Bruce 43 2010 Chief Development Officer, General Counsel, Secretary
Malone, John 70 2008 Director
Bennett, Robert 52 2008 Director
Gould, Paul 65 2005 Director
Robison, M. LaVoy 75 2008 Director
Wargo, J. David 57 2008 Director
Beck, Robert 69 2008 Director
Kramer, Lawrence 60 2008 Director
Miron, Robert 72 2008 Director
Miron, Steven 44 2008 Director
COMPANY ADDRESS
Discovery Communications Inc
One Discovery Place
Silver Spring MD 20910
DCI both produces original programming and acquires content from producers worldwide. This non-fiction programming is offered through DCI's 28 network entertainment brands, including Discovery Channel, Military Channel, TLC, Animal Planet, Discovery Health Channel and a family of digital channels. DCI also distributes BBC America and BBC World News to cable and satellite operators in the United States.
Discovery Communications Inc. (Discovery), incorporated on March 9, 2005, is a global nonfiction media and entertainment company that provides programming across multiple distribution platforms worldwide. It also has a diversified portfolio of Websites and other digital media services, develops and sells curriculum-based education products and services, and provides postproduction audio services. The Company operates in three segments: U.S. Networks, International Networks and Education and Other. Its U.S. Networks segment consists principally of domestic cable and satellite television networks, Websites and other digital media services. International Networks consists primarily of international cable and satellite television networks and Websites. Education and Other consists principally of curriculum-based product and service offerings, and postproduction audio services.
On November 12, 2010, Discovery acquired the remaining 50% interest in the international Animal Planet and Liv, formerly People + Arts, networks from venture partner BBC Worldwide. The acquisition provides the Company 100% ownership of these entities, which deliver programming primarily to audiences in Europe, Latin America and Asia. On September 1, 2010, the Company sold its Antenna Audio business. On February 17, 2010, it acquired all interests in an uplink facility in London. It provides original and purchased programming to more than 1.6 billion cumulative subscribers in the United States and over 180 other countries and territories. It provides services in more than 120 worldwide networks offering customized programming in over 40 languages.
Outside the United States, Discovery has international distribution platforms with two to thirteen channels in more than 180 countries and territories worldwide. Internationally, the Company distributes a portfolio of television networks led by two networks each of which reach more than 150 million cumulative subscribers. The Company’s content spans genres, including science, exploration, survival, natural history, sustainability of the environment, technology, docu-series, anthropology, paleontology, history, space, archaeology, health and wellness, engineering, adventure, lifestyles and current events. On January 1, 2010, the Company realigned its commerce business, which sells and licenses Discovery branded merchandise, from the commerce, education and other reporting segment into the U.S. Networks segment.
U.S. Networks
Discovery’s U.S. Networks segment principally consists of national television networks. U.S. Networks generates revenues primarily from fees charged to operators who distribute its networks, which include cable and direct to home (DTH) satellite service providers, and from advertising sold on its television networks, Websites and other digital media services. Its U.S. Networks segment also generates revenues from affiliate and advertising sales representation services for third-party and venture networks and the licensing of its brands for consumer products. During the year ended December 31, 2010, U.S. Networks generated 63% of its total net revenues. During 2010, distribution, advertising and other revenues were 44%, 52% and 4%, respectively, of total net revenues for this segment.
The Company’s U.S. Networks segment owns and operates nine national television networks principally throughout the United States, including Discovery Channel, TLC and Animal Planet. Effective December 31, 2010, it also owned and operated the Discovery Health network. On January 1, 2011, it contributed the Discovery Health network to Oprah Winfrey Network (OWN), which is a 50-50 venture between the Company and Harpo, Inc. (Harpo). U.S. Networks also owns an interest in The Hub, which is a 50-50 venture between us and Hasbro, Inc. (Hasbro). In the United States, Discovery owns and operates three fully distributed networks that each reaches more than 97 million subscribers and six networks that each reaches 34 million to 70 million subscribers.
Discovery’s U.S. Networks segment owns and operates the Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science Channel, Military Channel, Planet Green, Discovery Fit & Health, HD Theater, OWN and The Hub, formerly the Discovery Kids network. As of December 31, 2010, Discovery Channel reached approximately 100 million subscribers in the United States. The Discovery Channel network offers a mix of genres, including science and technology, exploration, adventure, history and in-depth, behind-the-scenes glimpses at the people, places and organizations. Programming highlights on Discovery Channel include Deadliest Catch, Mythbusters, Dirty Jobs, Man Vs. Wild, Storm Chasers, Swamp Loggers and Gold Rush: Alaska. Discovery Channel is also home to mini-series, such as Life.
As of December 31, 2010, TLC reached approximately 99 million subscribers in the United States, and approximately eight million subscribers in Canada. Programming highlights on TLC include Cake Boss, Little Couple, What Not to Wear, Police Women, Say Yes to the Dress, LA Ink and 19 Kids and Counting. As of December 31, 2010, Animal Planet reached approximately 97 million subscribers in the United States. Animal Planet provides a range of programming-related to life in the animal kingdom and human interaction with animals. Programming highlights on Animal Planet include Whale Wars, River Monsters, I Shouldn’t be Alive, Fatal Attractions, Pit Bulls and Parolees and It’s Me or the Dog.
As of December 31, 2010, Investigation Discovery reached approximately 70 million subscribers in the United States. Programming highlights on Investigation Discovery include On the Case with Paula Zahn, Disappeared, I (Almost) Got Away With It, Who The (Bleep) Did I Marry? and Extreme Forensics. As of December 31, 2010, its Science Channel reached approximately 67 million subscribers in the United States. Programming highlights on Science Channel include Through the Wormhole with Morgan Freeman, Wonders of the Solar System, How It’s Made, Head Rush, Sci Fi Science, How Do They Do It?, Build It Bigger and Punkin Chunkin.
As of December 31, 2010, Discovery’s Military Channel reached approximately 57 million subscribers in the United States, and approximately one million subscribers in Canada. Programming highlights on Military Channel include Future Weapons, Showdown: Air Combat, Science of War and Top Sniper. As of December 31, 2010, Planet Green reached approximately 56 million subscribers in the United States. Programming highlights on Planet Green include The Fabulous Beekman Boys, Operation Wild, Living with Ed, Conviction Kitchen, Blood, Sweat and Takeaways, and the Reel Impact weekly film series. As of December 31, 2010, its Discovery Fit reached approximately 50 million subscribers in the United States. Programming in Discovery Fit & Health includes Dr. G: Medical Examiner, I’m Pregnant And., The Bronx, Untold Stories of the ER, Bodies in Motion with Gilad, Namaste Yoga, and Shimmy.
As of December 31, 2010, HD Theater reached approximately 34 million subscribers in the United States. Programming highlights on HD Theater include World Rally Championship and Mecum Auto Auctions: Muscle Cars. Upon launch on January 1, 2011, the Company’s OWN channel had reached approximately 75 million subscribers in the United States. OWN is a multi-platform venture, including the OWN television network and Oprah.com. As of December 31, 2010, The Hub reached approximately 60 million subscribers in the United States. The Hub features original programming, game shows and live-action series and specials, including content drawn from Hasbro’s portfolio of entertainment and educational properties and content from Discovery’s library.
During 2010, Discovery formed 3net, which is a venture with Sony Corporation and IMAX Corporation to launch a 24-hours-a-day, 7-days-a-week, three-dimensional (3-D) network in the United States. It provides network services, including affiliate sales and technical support, as well as 3-D television rights to its content and cross-promotion. Its digital media business consists of its Websites and mobile and video-on-demand (VOD) services. Its Websites include network branded Websites, such as Discovery.com, TLC.com and AnimalPlanet.com. Websites also include HowStuffWorks.com, Treehugger.com and Petfinder.com. During 2010, these Websites attracted an average of more than 22 million cumulative monthly visitors.
International Networks
The Company’s International Networks segment principally consists of national and pan-regional television networks. During 2010, International Networks generated 33% of its total net revenues. This segment generates revenues primarily from fees charged to operators who distribute its networks, which consists of cable and DTH satellite service providers, and from advertising sold on its television networks and Websites. The Company’s International Networks segment also generates revenues from license and program access fees for its content. During 2010, distribution, advertising and other revenues were 61%, 34% and 5%, respectively, of total net revenues for this segment.
As of December 31, 2010, Discovery’s International Networks operated over 130 distribution feeds in over 40 languages. International Networks owns and operates a portfolio of television networks, led by Discovery Channel and Animal Planet, which are distributed in virtually every pay-television market in the world through an infrastructure that includes operational centers in London, Singapore and Miami. During 2010, it started the international rollout of TLC as a female-targeted global flagship, which was launched in over 30 countries and territories in Europe and Asia.
Effective January 1, 2011, the Company’s International Networks operated in four regions: Western Europe, which includes the United Kingdom and western European countries; Central and Eastern Europe, Middle East and Africa; Latin America; and Asia-Pacific. International Networks also distributes specialized networks developed for individual regions and markets to 226 million cumulative subscribers, which include Real Time, Turbo and Discovery World; Discovery History, Shed and Quest networks in the United Kingdom; Discovery Civilization and Liv networks in Latin America. In addition, International Networks distributes two Spanish-language networks in the United States, Discovery en Espanol and Discovery Familia, which are distributed to 11 million cumulative subscribers.
Education and Other
The Company’s Education and Other segment primarily include the sale of curriculum-based product and service offerings and postproduction audio services. During 2010, Education and Other segment generated 4% of its total consolidated net revenues. This segment generates revenues from subscriptions charged to public and private Kindergarten through 12th grade (K-12) schools for access to an online video on demand (VOD) service that includes a suite of curriculum-based tools, student assessment and professional development services, publication of hardcopy curriculum-based content and postproduction audio services.
The company started out with just a single channel, Discovery Channel, launched in 1985. In 1991, they acquired their rival The Learning Channel.
In the mid-90s, Discovery Communications started developing several new networks. The first of these to launch was Animal Planet, which was launched in cooperation with the BBC in 1996. In October 1996, four digital networks were launched to take advantage of the then-new digital cable space; Discovery Kids, Discovery Travel & Living Network, Discovery Civilization Network and Discovery Science Network. This was followed by the 1998 launches of Discovery Wings Channel and Discovery Health Channel.
They also bought the Travel Channel in 1997, CBS Eye on People (became Discovery People) in 1998 and The Health Network (became FitTV) in 2001.
Discovery Networks were early to go into high-definition television with the launch of Discovery HD Theater in 2002. With the launch of high-definition simulcasts of Discovery Channel, TLC, Animal Planet and Science Channel in 2007, the original HD channel changed its name to HD Theater.
Starting in the middle of the 2000s, Discovery have been reviewing and overhauling most of their "digital" networks. The networks have evolved from being offshoots of the Discovery Channel, into separate entities with their own identities. The "Discovery" moniker has gradually been dropped from channel names. Some networks had kept the globe in their logo to signal their affiliation to Discovery Networks, but this practice has also been gradually discontinued.
Discovery Networks U.S. operates 13 channels.According to SEC filings, the division "also operates web sites related to its channel businesses and various other new media businesses, including a video-on-demand offering distributed by various cable operators."
OVERALL
Beta: 0.98
Market Cap (Mil.): $11,785.71
Shares Outstanding (Mil.): 278.56
Annual Dividend: --
Yield (%): --
FINANCIALS
DISCA.O Industry Sector
P/E (TTM): 24.60 195.67 13.77
EPS (TTM): 30.14 -- --
ROI: 7.62 3.71 1.32
ROE: 12.00 6.09 2.19
Name Age Since Current Position
Hendricks, John 58 2008 Chairman of the Board
Zaslav, David 51 2008 President, Chief Executive Officer, Director
Singer, Bradley 44 2009 Senior Executive Vice President, Chief Financial Officer, Treasurer
Hollinger, Mark 51 2009 President and Chief Executive Officer - Discovery Networks International
O'Neill, Eileen 2011 Group President - Discovery and TLC Networks
Kaplan, Marjorie 2011 President - Animal Planet and Science Networks
Ligouri, Peter 50 2010 Senior Executive Vice President, Chief Operating Officer
Colan, Thomas 55 2008 Executive Vice President, Chief Accounting Officer
Alpert-Romm, Adria 55 2008 Senior Executive Vice President - Human Resources
Campbell, Bruce 43 2010 Chief Development Officer, General Counsel, Secretary
Malone, John 70 2008 Director
Bennett, Robert 52 2008 Director
Gould, Paul 65 2005 Director
Robison, M. LaVoy 75 2008 Director
Wargo, J. David 57 2008 Director
Beck, Robert 69 2008 Director
Kramer, Lawrence 60 2008 Director
Miron, Robert 72 2008 Director
Miron, Steven 44 2008 Director
COMPANY ADDRESS
Discovery Communications Inc
One Discovery Place
Silver Spring MD 20910