Discovery Communications Company

Discovery Communications allows viewers to go on safari without ever having to leave their couch. It is the world's #1 non-fiction media company, with more than 150 worldwide cable TV networks, including Discovery Channel, Animal Planet, and The Learning Channel (TLC). Among its US joint venture networks are The Oprah Winfrey Network (OWN), The Hub, and 3net (the first 24-hour 3D network). Discovery Communications reaches more than 1.8 billion subscribers in more than 200 countries. In addition, the company offers educational products and services to school; a diverse set of digital media services; and online content through Discovery.com and AnimalPlanet.com. Operations Discovery Communications' flagship Discovery Channel, with 100 million US subscribers, offers a mix of adventure, science, and history programming (Deadliest Catch, Dirty Jobs, Mythbusters). Its TLC reaches 99 million people in the US (and 8 million in Canada) and concentrates on personal interest shows (Cake Boss, Say Yes to the Dress, What Not to Wear). Animal Planet reaches 97 million people and highlights programming related to wildlife and pets (It's Me or the Dog, Whale Wars), while other channels include Investigation Discovery (Unusual Suspects), Science Channel (Through the Wormhole with Morgan Freeman), and Military Channel (Greatest Tank Battles). Financial Analysis Discovery Communications has enjoyed several straight years of substantial gains in profits and revenues. From 2008 to 2011, its net income skyrocketed from $317 million to more than $1.1 billion, while its revenues increased from $3.4 billion to $4.2 billion during that same four-year span. The company attributes increases in contractual rates, rises in advertising revenues, and growth in its subscriber base as main reasons for its prosperity. It also cites the popularity of non-fiction programming as a key factor in its success; Discovery has carved out its leading position in the TV business by focusing on non-fiction and reality-based shows that mix entertainment and educational content. Strategy Like rival cable programmers such as Viacom and A&E Television Networks, Discovery Communications uses its portfolio of channels to segment its audience by programming each network around specific interests. The strategy gives each of Discovery's channels a distinct identity and simplifies the company's marketing efforts. It also increases the value of commercial air time for advertisers trying to reach those audiences. Discovery generates the lion's share of its revenue through advertising and carriage fees paid by cable system operators. In addition to maintaining its existing outlets, Discovery Communications is also working to expand its portfolio of cable channels. In 2011 the company launched The Oprah Winfrey Network (OWN), a 50/50 joint venture with talk show host Oprah Winfrey (through her production company Harpo). The channel's programming reaches about 75 million people and features human interest and self-help stories, as well as the queen of daytime talk herself hosting a new show. OWN is hoping to turn things around after a challenging first full year, when it struggled with weak ratings, layoffs, executive turnover, and the cancellation of flagship program The Rosie Show. Discovery Communications is also focused on growing its digital holdings. In 2012 the company acquired digital video provider Revision3 for a reported $30 million. Revision3 makes and distributes its own Web shows (such as Tekzilla and Epic Meal Time). Discovery is using the purchase to strengthen its online video presence. And previously the company joined with Sony Corporation of America and IMAX to create 3net, a new programming service that provides a 24-hour schedule of 3D TV content. Launched in 2011, 3net is banking on gaining traction with the introduction of 3D-capable televisions by such manufacturers as LG Electronics, Panasonic, and Sony. Ownership Media mogul John Malone, who controls various properties through his Liberty Media holding company, holds about 30% voting control in Discovery Communications and is represented on the company's board. Advance/Newhouse, an affiliate of Advance Publications, has more than 25% voting control in the company.