Malone's Discovery buys to battle against Netflix
Discovery Communications has agreed to buy Scripps Networks Interactive for $11.9bn (€10bn) in a bet that uniting ownership of cable channels like Animal Planet and HGTV will help the company adapt to a fast-changing TV landscape.
Discovery, one of Irish-American billionaire John Malone's key holdings, is grappling with shrinking audiences at some US channels - including the Discovery Channel and Animal Planet - as consumers drop cable subscriptions and get more entertainment online from Netflix and others.
Discovery CEO David Zaslav said yesterday he plans to use Scripps programming to strengthen the company's international reach and expand its distribution options, including creating more short-form video for social media.
The combined companies could leverage their programming to ensure they're included in new online TV services that offers fewer channels at lower prices, he said.
Given their wide viewership, both Scripps and Discovery networks are relatively inexpensive for distributors to include in their channel lineups, he said.
Hulu and Alphabet's YouTube TV, for instance, didn't include Discovery networks in their new web-TV services, and YouTube didn't include programming from Scripps.
"It probably helps in those discussions," Zaslav said of negotiating with new online-TV services. "We do think we are making ourselves a very compelling core of a skinny bundle."
Discovery wants to package the Scripps networks with its own in an online service, Bloomberg reported this month, citing a source. Discovery fell 5.6pc to $25.30 early yesterday, while Scripps rose 0.8pc to $87.60. (Bloomberg)