The MotorTrend Group will offer live coverage of the Mecum automobile auctions beginning in 2022 as part of a multiyear deal between the two parties announced Thursday (Oct. 28).

Under the new deal, MotorTrend Group — a joint venture between The Enthusiast Network and Discovery — will air more than 160 hours of live coverage across ten Mecum Auctions beginning in January 2022 on subscription streaming service MotorTrend Plus and linear TV channel MotorTrend TV, according to the company. The auctions currently air on NBCSN, which is set to leave the air at the end of this year. 

“Mecum is the leading automotive auction company in the world with the most extraordinary variety of vehicles,” Alex Wellen, global president and general manager for the MotorTrend Group, said in a statement. “Car fans everywhere will be able to watch all Mecum Auctions on MotorTrend’s subscription streaming service anytime, anywhere and on MotorTrend TV, but that’s only the beginning: Together with Mecum, we will channel our collective fans’ passions with the launch of a wide range of interactive, personal experiences across all of our digital platforms.” 

Added Mecum Auctions CEO Dave Magers: “We are thrilled to be joining forces with the MotorTrend Group, the world’s most expansive and prominent automotive media company. This is not simply a new TV programming deal, this is a strategic media partnership between Mecum and MotorTrend coming together to create engaging new experiences for automotive enthusiasts across the entire media landscape. We are very excited to be working with Alex Wellen and the entire MotorTrend team on many future opportunities.”

AT&T and Discovery Communications said they reached a definitive agreement to combine AT&T’s WarnerMedia with Discovery, creating what they called a TV and streaming giant.

AT&T, which bought Time Warner three years ago for $85 billion, will receive $43 billion worth of cash and debt. Its shareholders will own 71% of the new company. The deal would unwind AT&T's strategy of combining its mobile phone and broadband assets with a content company. 

AT&T also agreed to spin off DirecTV, another expensive media acquisition, in March.

Discovery’s CEO David Zaslav, who has been touting Discovery’s unique place in the media world, will be the head of the combined company, which will own streaming assets in HBO Max and Discovery Plus and a collection of cable networks, including the former Turner networks' news channel, CNN, general entertainment and sports channels TBS and TNT, and kids programmer Cartoon Network as well Discovery’s unscripted channels HGTV, Food Network, Discovery, TLC and OWN.

Also Read: David Zaslav Says Name of New Company Coming

The combined company is projected to have 2023 revenue of $52 billion and adjusted earnings before interest, taxes, depreciation and amortization of $14 billion. 

The combination of the two companies is expected to result in $3 billion cost synergies annually. 

They spend a total of $20 billion on content, more than Netflix, which plans to spend $17 billion this year.

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want,” said John Stankey, AT&T’s CEO.

“For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world,” Stankey said. 

"During my many conversations with John, we always come back to the same simple and powerful strategic principle:  these assets are better and more valuable together. It is super exciting to combine such historic brands, world class journalism and iconic franchises under one roof and unlock so much value and opportunity,” said Zaslav. 

“With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins...consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers,” Zaslav said. “We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it.”

The new company would aim to take on the leaders in the new streaming TV market, now led by Netflix and The Walt Disney Co. 

“We think this merger idea would be an explicit acknowledgement that neither company believes it can succeed in the streaming future alone,” said Todd Juenger, analyst at Sanford C. Bernstein. “We don't blame them for doing something, collecting some synergies, giving themselves more options. It's better than doing nothing. But whether this idea is ‘better than nothing’ is not the operative question."

Juenger said he’s looking at the deal from a skeptical point of view.

“Taking two businesses where the vast majority of the cash flow is derived from linear TV, which is in our opinion a structurally impaired business (with cyclicality as well), does not create a better business,” he said.

“In terms of the future optionality created, it's not clear how the streaming offerings would be combined/packaged together, and how that creates a new product(s) which would lead to a consumer proposition that would attract more subs at higher ARPU at higher margin, for which the market would accordingly be expected to value at a higher PV than what is already embedded in the stocks.”

HBO Max is already one of the highest-priced streaming services. Discovery Plus is priced lower because Discovery features low-cost unscripted programming, which Zaslav said gave it a unique position in the industry and offered consumers a distinct value proposition. 

Last month AT&T said it had 44.2 million HBO and HBO Max subscribers at the end of the first quarter.

Discovery most recently reported having 15 million direct to consumer subscribers at the end of the first quarter.

Discovery CEO David Zaslav said he’s in no hurry to push people back to work in offices or in the field in order to get production back to normal.

In the early days after the COVID-19 crisis closed Discovery’s office, a number of Discovery employees tested positive for the virus.

“Those were 14 of the toughest days for me in my life,” Zaslav said on the company’s first-quarter earnings call Wednesday. The company had a call every morning about the virus. “Who had it? Who’s been tested? Who did they come in contact with? It was really an extraordinary effort,” he said.

All of the employees got through their illness--although some employees’ families face challenges, he said. “We’re not in any rush to get back to those calls because we couldn’t breathe," Zaslav said.

"You feel it because they got sick coming to work," he said. "We're not in any rush to push anyone because we're working remotely so effectively. We haven't missed a beat. We've learned a ton. But we want to push anybody into the field. We don't want to have that feeling again."

Zaslav said the virus has forced the company to come together and find better ways to get work done.

When he first joined Discovery, Zaslav recalled that the company had a conference call every morning at 7 a.m. He said it energized the company and ensured everyone was on the same page.

“We have a call every morning now. Every single morning,” he said. “It started out with the virus. And now it’s where are we winning? How do we do this differently? How do we get less people in the office?”

Through the course of the last couple of months, the company has figured out new ways to get things done. One example: “We used to have 14 people in the control room. Now we’re doing it with one,” he said.

“So there's going to be very significant change in the business when we come out of this, I think for the good, in terms of what we've learned including how we shoot content and how we pay for it,” he said.

The pandemic has also boosted the value of direct-to-consumer and streaming businesses. Zaslav and Discovery have been talking about a domestic Discovery DTC offering, and he added more insight into how the company was thinking about extending its reach to cord cutters and other non-cable subscribers.

Zaslav said Discovery had no contractual limitations on its ability to launch a DTC service, but noted that the company has a “hell of a business” with its existing distributors.

Those cable operators are in the broadband business where there are 30 million people that are broadband-only customers, he added.

”We are in discussions with all of them about the fact that we have this great package of content,” Zaslav said.

“Everyone agrees. And so I think you’ll see over the next year or so, our goal is going to be do something with the distributors because they have direct access to those 30 million,” he said. “When you see us move, you’ll probably see us move broadly, but also in tandem in a way that creates value for both of us” because Discovery wants those distributors to feel encouraged that “instead of just doing our own thing, we’re talking to them about doing some things together.”

Zaslav compared a potential Discovery streaming service to Disney+, which features powerful brands like Marvel, Pixar and Star Wars. “Imagine [consumers open an app] and they see HGTV and Food and Oprah and Discovery and BBC Planet Earth, and behind each of those circles is all the great talent that we have. We’ve done a lot of research and people look at that and they go, ‘wow, those are four of my favorite channels and those are my favorite characters.”

Discovery Communications, cleared to acquire Scripps Networks Interactive, on Thursday (March 1) announced new management for the combined company.

Among the top Scripps execs taking prominent roles are Jon Steinlauf, who will be chief U.S. advertising sales officer. Ben Price, currently president of U.S. ad sales for Discovery, will report to Steinlauf, along with Leigh Anne Brodsky, currently executive VP of Discovery Global Enterprises.

Scripps’s programming chief, Kathleen Finch, will become chief lifestyle brand officer for the combined company with oversight of HGTV, Food Network, TLC, ID, Travel Channel, DIY Network, Cooking Channel, Discovery Life, American Heroes Channel, Destination America, Great American Country and Lifestyle Digital Studios in the U.S.

Related: Discovery to Shut Down Maryland HQ, Move to New York

Henry Schleiff will continue as group president for ID, Destination America and American Heroes Channel. Howard Lee, currently executive VP, development & production for TLC and general manager of Discovery Life, will be the new president and GM for TLC and Discovery Life, effective immediately. Both Schleiff and Lee will report to Finch upon closing of the transaction.

Nancy Daniels, currently president of TLC, will assume the new role of Chief Brand Officer, Discovery & Factual, effective immediately. Daniels will lead all aspects of the Discovery Channel and Science Channel brands. Rich Ross, currently group president of Discovery Channel and Science Channel, will be leaving the company.

“Today’s announcement is another major milestone in combining these two fantastic companies into a new kind of media company with the most trusted portfolio of real life entertainment brands in the world,” said David Zaslav, president and CEO, Discovery Communications. “Upon closing, each division will have a best-in-class leader focused on quickly integrating the combined teams to create new ways for advertisers and distributors to reach highly targeted audiences at scale; capturing operating efficiencies across both companies; and driving innovation to continue telling great stories and nourishing our passionate, loyal superfans around the world across every consumer screen, service and platform.”

Related | broadcastingcable.com: Scripps Networks Interactive Has Higher 4th Quarter Profit

Other executives who will be reporting to Zaslav include:

Gunnar Wiedenfels, currently Discovery’s CFO, who will be CFO for the combined company.

Jean-Briac Perrette, currently president and CEO of Discovery Networks International, will continue in that role for the combined company.

Bruce Campbell, currently chief development, distribution and legal officer for Discovery, will continue in that role. Leading the combined company’s linear, non-linear and mobile distribution efforts in the U.S. & Canada will be Eric Phillips, president, affiliate distribution, reporting to Campbell. Discovery’s General Counsel, Savalle Sims, will retain that role for the combined company, also reporting to Campbell.

Adria Alpert Romm, currently serving as Chief Human Resources and Global Diversity Officer for Discovery, will continue in that role for the combined company.

Susanna Dinnage, currently serving as Global President of the Animal Planet network in the U.S. and Animal Planet brand worldwide, will continue in that role.

Erik Logan, currently serving as president of OWN: Oprah Winfrey Network, will continue in that role and report to the OWN Venture board of directors.

Karen Leever, currently serving as executive VP and GM, Digital Media U.S., and Mike Lang, currently serving as president, Discovery Networks International Digital & CEO TEN/MotorTrend, will continue in those roles for the new company reporting to Zaslav.

Current Scripps Networks executives not assuming roles in the company going forward will participate in the integration process following the deal's close to ensure a smooth transition of responsibilities, Discovery said.

Private equity firm Francisco Partners has agreed to purchase a majority interest in Discovery Education, a unit of Discovery Communications that provides digital content and professional development for public schools around the world, for about $120 million.

Discovery Communications will continue to hold a minority interest in Discovery Education, and will license the “Discovery Education” brand to Francisco Partners

Discovery Education was formed in 2004 after the combination of Discovery Channel School and United Learning Inc. Since then the unit has grown to become a global leader in standards-based digital content for K-12, transforming teaching and learning with award-winning digital textbooks, multimedia content, professional development, and the largest professional learning community of its kind. Discovery Education serves 4.5 million educators and over 50 million students and its services are in half of U.S. classrooms, 50% of all primary schools in the U.K., and more than 50 countries.

“This transaction represents an incredibly exciting opportunity for Discovery Education to accelerate its growth with Francisco Partners, while also maintaining its longstanding partnership with the Discovery Communications family,” said Discovery Education CEO Bill Goodwyn in a statement. “We are well positioned to continue investing in our market-leading products and services, and this investment allows us to further expand our reach and impact both domestically and around the world.”

Discovery Education’s current management team, led by Goodwyn, will operate the company as a standalone business upon the closing of the transaction.

“From its earliest days, education has been rooted in Discovery’s DNA and we are extremely proud of the world-class business that Bill and his team have built and the impact Discovery Education’s products and services have made in transforming student achievement,” said Discovery Communications chief development, distribution and legal officer Bruce Campbell in a statement. “This transaction allows Discovery to focus on driving value and growth across our core media businesses, while maintaining our strong commitment to Discovery Education and its mission to promote and inspire learning. We are excited for its next chapter with Francisco Partners.”

Discovery Education partners with administrators, teachers, students and like-minded organizations worldwide to create dynamic digital learning environments that support the success of all learners. By combining award-winning digital textbooks, or Discovery Education “Techbooks,” and best-in-class supplemental services such as Discovery Education Streaming and STEM Connect with sustained professional development resources, Discovery Education is inspiring student curiosity and empowering educators every day to reimagine teaching and learning.

“We are thrilled to partner with Bill and the entire Discovery Education team as the company embarks on its next stage of growth,” said Francisco Partners partner Jason Brein in a statement. “We are impressed by Discovery Education’s positive impact on student learning, and are excited to help support Discovery Education as it transforms teaching and learning around the globe.”

The transaction is subject to customary closing conditions and is expected to occur in the first half of 2018.

“With this additional investment, Discovery Education will continue its laser-like focus on creating and delivering the innovative services today’s educators need to prepare students for success beyond the classroom,” added Dsicovery Education president K-12 Education Scott Kinney in a statement. “In the short term, our partners will see no change in their relationship with Discovery Education. However, long term, this new relationship tremendously enhances our ability to create the next generation of digital services and initiatives for educators worldwide.”

The rollercoaster ride for Viacom and CBS investors continued Wednesday after the Wall Street Journal reported that one of the biggest shareholders of both companies – CBS and Viacom vice chair Shari Redstone – is attempting to add new directors to the broadcaster’s board as she continues to try to push a deal through.

Viacom stock was up nearly 4% ($1.29 each) to $32.60 per share late Wednesday on the news. CBS shares rose slightly (9 cents) to $59.52 each in late afternoon trading.

According to the Journal, Redstone, who had pulled back her attempt to merge the two companies in 2016, reached out earlier this month to CBS chairman and CEO Les Moonves, who has in the past resisted a merger, to serve as a catalyst toward a recombination.

The paper said she is gathering a slate of possible directors ahead of CBS’s May annual meeting of shareholders, where several directors are expected to be replaced.

Moonves has resisted past attempts to put the two companies together because like other analysts, he sees little benefit for CBS, according to reports. But with large media companies moving to get larger – like Disney’s pending $66.1 billion purchase of certain 21st Century Fox assets and Discovery Communications $14.6 billion buy of Scripps Networks, expected to close in the first quarter, the urge to merge is greater than ever.       

Viacom and CBS split in 2006 in an effort to unlock value at both companies. But since then, CBS has flourished, growing into the top rated broadcaster in the country with a strong OTT service (CBS All Access) and a steady premium channel (Showtime). Viacom, which endured some extreme management turmoil over the past few years, has struggled to get back on track as its networks have slipped in the ratings and the ad market has dwindled.

TheWrap first reported that Redstone was eyeing a reconstituted CBS-Viacom on Friday. That resulted in a 7% runup in Viacom’s stock price on Jan. 12 that was eroded on Jan. 16 after reports surfaced that no formal talks were being held.

In an ever-shifting media landscape, both content creators and distributors spent most of 2017 chasing scale.

With changing consumer habits and growing appetites for more choice, lower prices and true on-demand availability, that pursuit is expected to continue well into the new year.

Scale economics is nothing new to the cable industry — the business was based on the concept that giving consumers more channels would create more customers who would require more channels. The real shift is in how companies in the video space are defining big. Toward the end of the year, more companies were asking themselves, how much scale is enough?

On one side of the argument is The Walt Disney Co., which late last year decided that there is no such thing as too much scale, agreeing to plunk down $66.1 billion for 21st Century Fox’s TV and movie studio, FX and National Geographic cable channels, 22 regional sports networks and U.K. satellite assets.

But Fox, a pioneer in the cable and broadcast business for decades, saw an opportunity to scale down, paring its holdings to a streamlined few — its Fox broadcast network and stations, Fox News Channel, Fox Business Network and national sports networks FS1, FS2 and Big Ten Network.

For Fox, scale is important, but it’s the right type of scale — news and live sports — that is best.

Distributors weren’t immune to the impact of scale during the year, either. Riding a wave of optimism that tax reform and a friendlier business environment would serve as a catalyst to bigger distribution deals, overall cable operator stocks were up 25% in the first nine months of the year, as speculation swirled around possible deals between Charter Communications and Verizon Communications, Charter and Sprint, and Charter and anybody else. But those hopes were dashed in September after Comcast said it would lose video customers in Q3. Add to that an apparent slowing of cable’s biggest profit center — broadband — and distributor gains began to shrink.

“Investors are transitioning to more of a higher data monetization, wireless market share, still-solid overall financial growth and increasingly large capital return strategies,” Pivotal Research Group CEO and senior media and communications analyst Jeff Wlodarczak said. “At the end of the day, I think we are in the seventh inning of the transition for cable.” He expects to see seasonal subscriber gains in the fourth and first quarters, he added, which should help the stocks.

While most investors remain sanguine about the cable business, they are also leery of the blood-letting power of the so-called FAANG stocks (Facebook, Apple, Amazon, Netflix and Google). With a combined market capitalization of almost $3 trillion, those five stocks not only dwarf the pay TV distribution business, which has a combined $800 billion market cap — these companies have the resources to upend the entire distribution model, snapping up sports and entertainment content at will, or at least driving the prices paid for that programming into the stratosphere.

As the new year begins, we chart how the three biggest sectors of the pay TV industry performed in 2017 and the prospects — good and bad — for 2018.

Distributors
Best Performing Stock in 2017: Charter Communications (16.7%)
Worst Performing Stock in 2017: WideOpenWest (-35.9%)

Distributors rode an optimistic wave for most of 2017 — Comcast and Charter were up nearly 20% and 40%, respectively, heading into September — that came unceremoniously crashing down after investors panicked over video subscriber declines. Comcast touched off the mini-firestorm with its Sept. 7 announcement that it would shed between 100,000 and 150,000 video customers in the third quarter, nearly erasing the 161,000 customers it gained in 2016.

Investors headed for the exits, with Comcast stock falling 7% on Sept. 7, but gradually came back to the fold. The sector in general rose 9.2% for the year, backing out new entrants Altice USA and WideOpenWest; the stocks fared better, up 11.2% for the year.

On the telco side, AT&T was down 8.6% mainly after the government moved to block its deal to acquire Time Warner, and Verizon was relatively flat as investors struggled to decipher its video strategy.

Continued pressure from over-the-top competitors only added to the panic after distributors lost a collective 827,000 video customers in Q3, well above the 559,000 the lost in the prior year. Adding insult to injury: Broadband growth, the one consistent bright spot for cable operators over the past decade, was showing signs of slowing down. Comcast and Charter added 818,000 and 908,000 broadband customers, respectively, in the first nine months of 2017, about 17% behind the prior year’s pace.

While most analysts believe cable broadband will hold its own in the coming years, video is expected to play an increasingly minor role in the overall business. UBS media analyst John Hodulik estimated video would account for 20% of total cash flow in 2018, dropping to 10% by 2020.

Tax reform also will play a big role in added profitability, with Hodulik estimating it would help drive 20% increases in earnings per share and free cash flow for AT&T, Verizon, Comcast and Disney. And while some have already given back some of the expected windfall — AT&T and Comcast announced $1,000 cash bonuses for employees in December — what the companies do with the money is up to them.

“Capital freed could be used for capex, buybacks, dividends or strategic investment,” Hodulik wrote, adding that future deals also could be added to the mix. “Despite the uncertainty cast by AT&T-TWX, we expect M&A to remain a focus with the potential for further media and infrastructure deals.”

Wireless also is expected to play a big role in the coming year, with Charter’s much-anticipated wireless offering — through its mobile virtual network operator (MVNO) pact with Verizon — expected to debut later in the year.

Comcast introduced its wireless product Xfinity Mobile in April, also via the Verizon MVNO, and has more than 250,000 customers for the service. Hodulik estimated that could rise to 500,000 by the end of the year and coupled with Charter, cable operators could have more than 1 million wireless customers by the end of 2018. That’s about one-third of the wireless industry’s net annual growth.

Programmers
Best Performing Stock in 2017: WWE (66.2%)
Worst Performing Stock in 2017: Discovery Communications (-18.4%)

Faced with the havoc that a direct-to-consumer world could wreak on the programing business, content providers struggled with whether to take a more is better or bare bones approach. Both concepts were at play as the year drew to a close.

On the more is better front, Disney’s planned purchase of certain 21st Century Fox assets was the biggest example, but there were others, too.

In July, Discovery Communications pulled the trigger on a long-awaited buy of Scripps Networks Interactive for $14.6 billion. Discovery had long pursued Scripps — the two were reportedly negotiating a deal in 2014, but ended talks — and the inclusion of its similarly themed networks seemed like a perfect fit.

Some analysts, such as Sanford Bernstein media analyst Todd Juenger, have questioned the concept of going big on programming content in a market where consumers seem to be telling distributors they want less, not more. In a recent research note shortly after the deal was announced in July, Juenger said that while Discovery and Scripps had run into the same trouble as other networks in the changing landscape, bigger isn’t necessarily better.

“If you combine Discovery and Scripps, you now have, literally, 20 networks, many of which MVPD’s don’t want,” Juenger wrote. “That’s already a problem for Discovery, but we think adding Scripps makes it worse.”

Juenger later called the Disney-Fox deal a classic “build or buy” decision, in which Disney determined it was more advantageous to buy added scale, saving the money, time and earnings dilution that a build would entail. But there are disadvantages to the buy scenario, too — buying requires paying a hefty premium for content that may never be realized.

Networks are obviously worried about the future, as many sense an end to the content bubble of new TV series being produced. With distributors pushing back on higher affiliate fees, declining advertising revenue and the growing threat from online giants like Google and Facebook, they have good reason to be scared.

It is no accident that the top performer in the pay TV network segment in 2017 — sports-entertainment titan WWE, up 66.2% for the year — got there mostly on speculation that Facebook would bid for rights to its flagship programs, Monday Night Raw and WWE SmackDown.

While Facebook could look to boost its content holdings, it already has a stranglehold on the advertising business. According to MoffettNathanson media analyst Michael Nathanson, traditional media advertising revenue declined 11% in Q3 2017, while digital advertising rose 22%. And Facebook and Google accounted for 74% of digital ad growth in the first half of 2017.

While the third quarter was the third straight period of decline for national TV ads — “the worst we’ve seen in the past decade,” according to Nathanson — the sluggish performance is expected to continue. He estimated that in 2018, a year with a Winter Olympic Games and midterm Congressional elections, traditional advertising will be down by 1% while overall spending will increase by 7%.

FAANG
Best Performing Stock in 2017: Amazon (56%)
Worst Performing Stock in 2017: Google (35.6%)

Amazon turned heads with its April purchase of streaming rights to a package of NFL Thursday Night Football games not for the amount paid — about $80 million — but for the message it sent to the industry. That simple purchase made it known that the online retail giant was a player in the live content business.

Amazon already is spending about $4 billion annually for content to fuel its Amazon Prime Video service, and the addition of live content could only make a powerful competitor even stronger.

BTIG media analyst Rich Greenfield thinks this may be the year Amazon goes deep with Thursday Night Football, bidding more than $600 million for exclusive rights.

While Amazon is expected to get deeper into the original content business, it will still lag behind Netflix, which is expected to plunk down $8 billion for content in 2018. Facebook, which bid $610 million for streaming rights to Indian Premier League cricket matches last year — it lost out to Fox’s Star India, which bid $2.5 billion — is expected to continue to test the content waters in 2018. In a blog post, Greenfield wrote that he expects Facebook to turn its focus on professional wrestling in 2018 — WWE’s rights deals with NBCUniversal for Raw and Smack- Down expire in 2019, but the programmer has said it plans to secure agreements for the U.S. and the U.K. markets in 2018.

Facebook already has a relationship with WWE: It announced a deal last year for a 12-episode show that airs on Facebook Watch called Mixed Match Challenge featuring Raw and SmackDown wrestlers.

In his blog, Greenfield saw that deal as a test bed for a deeper relationship between the companies, and said he believes not only will Facebook try to acquire digital rights for Raw and SmackDown, but it may also bid for exclusive linear rights in the U.S. and U.K.

“The question for 2018 is will Facebook start ‘winning’ the bidding processes it enters or just drive the price up on legacy media rights buyers?” Greenfield wrote.

But other analysts were puzzled by the social media giant’s video strategy, which so far has been a mix of user-generated short-form content and some short-to-medium professionally produced shows for its “Watch” and “Discover” tabs.

Nathanson wrote in December that Facebook hasn’t been very aggressive, save for the cricket bid, in trying to attract studios or smaller content creators for programming.

In a research note, Nathanson wrote that Facebook appears to be tiptoeing into the video space and that a more aggressive stance is “critical for it to jump start this initiative and get real attention in what is already an incredibly crowded space.”

For Google, the launch of YouTube TV hasn’t created the competitive storm some believed it would despite its attractive price point of $35 per month and lineup of 40-plus channels, including broadcast networks, AMC Network, Disney Channel and sports networks. But that could change in 2018 as the service’s reach expands.

YouTube TV was available in 83 markets as of December, up from five at its April launch. Apps for Roku and Apple TV, as well as for smart TVs, are expected in the first quarter of this year.

On the downside, some media executives see the distribution strategies of some of the new-entrant tech companies — especially Apple and Facebook — as “incoherent,” Barclays media analyst Kannan Venkateshwar said. That perception has caused some reluctance in licensing content to these companies, the analyst wrote, because the absence of a strong coherent distribution plan during the initial window of a deal can adversely affect the lifetime value of the content.

“Those selling content believe there are only about 10 or 11 serious buyers of content despite new entrants, i.e. the four broadcast networks, the top four to five cable networks, Netflix and Amazon,” Venkateshwar wrote.

Las Vegas -- As OTT video becomes more prolific and as consumers continue to alter their viewing habits, serving the “superfan” with curated content has become increasingly paramount, Discovery Communications CEO David Zaslav said here Wednesday at a CES keynote discussion.

For Discovery, that strategy will largely continue to focus on non-fiction fare, which emphasizes “enthusiasts and superfan networks,” Zaslav said.

That focus has also been a big driver behind Discovery’s proposed play for Scripps Networks Interactive, which offers a complement of networks and content in non-fiction areas such as food, home and gardening, travel and cooking.

“People not only…fall in love with the show, but they fall in love with the curation,” Zaslav said, noting that the plan is not just to provide deep baskets of long-form content that suits their interests, but also in smaller bites that can be distributed across all platforms.

“We think we can take advantage of that ecosystem by following the superfans and the enthusiasts for cars or science, or food or cooking all around the world and sort of super-feed them,” he added.

Zaslav also stressed the importance of not just owning the content, but also owning the global distribution rights. Discovery owns all of the content on its platforms all across the globe, with the exception of its Eurosport offerings.

“We’re IP [intellectual property] long,” he said. “But we’re also betting that owning the windows for that content globally will give us really unique status.”

Zaslav also talked up the implications of smart digital assistants and voice navigation, noting that those will provide another way for Discovery and others to provide complementary content in niches and genres that they are about, such as a recipe or instructions on how to build a bench.

Voice navigation “will be big in the way people consume content in the years ahead,” he predicted.

Zaslav and fellow panelist, LionTree LLC CEO Aryeh Bourkoff, were also asked to size up the M&A landscape in the TV and media industry.

Bourkoff acknowledged that it’s a “great time to be a creator,” but stressed that the business model for traditional industries don’t always align with changing consumer behavior. “And that is creating a lot of friction,” he said.

Bourkoff said companies with scale can preserve existing models for longer than smaller companies, which will be the ones that will need to seek out a dance partner.

With the expected closing of its $14.6 billion purchase of Scripps Networks Interactive just a few months away, Discovery Communications is planning to shut down its Silver Spring, Md., headquarters over the next two years and move its base of operations to New York.

In a memo to employees Tuesday, issued prior to an 11 a.m. Town Hall meeting for workers at the headquarters site, Discovery CEO David Zaslav said the plan was to shut down the Silver Spring location and sell it by 2019.

“This was one of the toughest calls we have made in our company’s history, and we do not take it lightly,” Zaslav said in the memo. “I felt strongly about sharing the news with all of you as quickly as possible once the decision was finalized. Maryland is where the magic of Discovery first began. It also is where many of you, and your loved ones, call home. Where so many wonderful ideas, stories and innovations were first imagined. After much discussion, analysis and debate, however, we believe this move is the right choice, at the right time, for the long-term success of our company.”

Discovery also plans to make Scripps’ current Knoxville, Tenn., headquarters a National Operations headquarters for the entire company and to transform Discovery’s Sterling, Va., facility ito a Technology Hub for the company. Scripps built a 150,000 square-foot operations facility in Knoxville in 2010.

Knoxville is where Scripps first launched HGTV and Food Network in 1994.

Discovery also plans to maintain a small Network Hub in Maryland to house select networks and roles that support them.

But at the center of Discovery’s new blueprint is New York. In the employee memo, Zaslav said the plan will be to consolidate Discovery and Scripps team members currently scattered between four locations in the city into a new Global Headquarters, for which planning is underway. Discovery hopes to move into the new building in the second half of 2019.

The moves come about three months after Discovery earmarked $10 million for a renovation of the Silver Spring HQ, relocating workers from surrounding areas and consolidating buildings. While some saw that September investment as proof that Discovery intended to keep its base in the area even after the Scripps deal closed, the company stressed that no final decisions had been made. On Tuesday, that final decision was made.

Discovery, which opened its Silver Spring headquarters in 2003, has about 1,300 employees in Maryland.

The Scripps deal is expected to close in the first quarter of this year.

Following is Zaslav’s memo in its entirety: 

Today I am announcing plans for a new Discovery global real estate strategy and footprint.

Chief among these changes, we have made the decision to move our global headquarters to New York City. We have therefore made the difficult decision to reduce our footprint in Maryland over time, with the ultimate closure and sale of our One Discovery Place headquarters building in Silver Spring, expected in 2019.

This was one of the toughest calls we have made in our company’s history, and we do not take it lightly. I felt strongly about sharing the news with all of you as quickly as possible once the decision was finalized. 

"Maryland is where the magic of Discovery first began.  It also is where many of you, and your loved ones, call home. Where so many wonderful ideas, stories and innovations were first imagined. 

"After much discussion, analysis and debate, however, we believe this move is the right choice, at the right time, for the long-term success of our company.  I will use the rest of this note to explain why, and ask you to please join me for a Town Hall at 1DP at 11AM ET today and live on workplace to discuss these changes in greater detail.

Responding to the Changing Landscape
You have heard me talk extensively about how dramatically the media industry is changing.  An industry that is more global, more consumer-focused and more multi-platform. We are constantly challenged by changing viewer tastes, behaviors and new entrants in the marketplace offering competing products. 

To compete, survive and grow, Discovery must continue to change as well.

For the past several years, we have started the journey to transition from a linear TV company with great cable distribution to a leading IP media company with world-class programming across all screens and services. Our investment in original content created new brands and fueled our expansion into sports, kids, short-form and direct-to-consumer products. The acquisitions of SBS, Eurosport and the rights to the Olympic Games in Europe expanded Discovery beyond our original nonfiction roots.  

The most recent milestone on our journey is Scripps. The pending acquisition has allowed us to undertake an in-depth analysis of where we work and how we work, and the chance to create the most efficient locations for our best-in-class creative, technology, production and operating functions to thrive now, and into the future. 

Beyond the headquarters move to New York and eventual closure of 1DP, we also plan, contingent on the deal closing, to create a National Operations Headquarters at Scripps’ current Knoxville, Tennessee campus and a Technology Hub at our Sterling facility in Northern Virginia.  We also plan to maintain a small Network Hub in Maryland to house select networks and roles that support them.

New York Global Headquarters
At the center of our new blueprint is New York. New York always has been home to the global media industry…our ad partners on Madison Avenue, investors and analysts on Wall Street, many of our creative and production community and, increasingly, our new short- and mid-form content partners, are based in New York. 

The plan would be to bring together the strength of all current Discovery and Scripps team members, currently spread across four different facilities in NY in a new Global Headquarters.  Planning for the space and location in New York is underway and we hope to move into a new building there in the second half of 2019. 

National Operations Headquarters in Knoxville
From an operating and financial perspective, it became clear that, pending closure of the Scripps transaction, we could not operate three large facilities in the U.S.  Since the announcement of the deal, we have evaluated the strengths, capabilities and advantages of the Knoxville, Tennessee campus, which houses the major Scripps brands and creative digital teams along with corporate functions. 

Featuring a compelling environment and infrastructure, Knoxville is a self-contained campus with many amenities and benefits for a National Operations Headquarters, including low cost of living, built-in facilities, and operational capabilities.

Northern Virginia Technology Hub
Discovery’s state-of-the-art media distribution facility in Sterling, Virginia, where we have originated over 80 feeds nearly flawlessly the last 13 years, will become a global technology center. 

The Northern Virginia Technology Hub, as it will be called, has been built as a model for the future. Our technology infrastructure is a competitive advantage and the team has done a terrific job investing for growth. It features modern digital technology, recently upgraded to take full advantage of flexible computing in the cloud, live playout capabilities, increased nonlinear publishing and much more. 

Beyond our global technology operation in Northern Virginia, we also plan to have a technology footprint in Knoxville and maintain several other international locations to service our global operations.

Global Creative Hubs & Regional Offices
Finally, we will continue bolstering our fantastic creative hubs in Los Angeles, New York, London, Miami, Warsaw and Milan, as well as in the Nordics, Brazil and Argentina, among others.  Over the past several years, we have benefited greatly from our expanded presence in these major global markets, offering closer proximity to robust local production communities and providing us more options for global content sourcing. 

To continue to support and draw from the community in Maryland, and to house select network and support functions, we will create a Maryland Network Hub. The Maryland location also will house other select functions, such as government relations, that are logically based in the Metropolitan DC area, as well as our Discovery Education division.

Since we wanted to tell you all as quickly as possible about these important decisions, we have not yet embarked on all the planning to determine which functions will be moved to which location.  For example, there is also duplication of facilities in other cities around the world, and we will continue the evaluation process following the closing of the Scripps acquisition regarding the most efficient and effective plan for housing our combined company employee base.

What This Means for You
We recognize this is challenging news, and that sharing it early would create some uncertainty, but we felt the benefit of more time, planning and transparency was important to help everyone impacted evaluate your own personal considerations.

After we close and begin the integration of Scripps, we will have a much clearer sense of timing and will regularly update you on any decisions that are made, and how and when your department will be impacted.

Our promise is to provide all the resources and support possible, and answer your questions as quickly as we can.

To that end, we will launch a host of resources and tools to help all employees navigate through this changing time. We will share more information about these resources in today’s Town Hall and over the upcoming weeks and months.

As always, thank you for your commitment and hard work for this great company.

David

Discovery Communications made moves Thursday to realign its international operations, naming long-time executive Kasia Kieli president and managing director for the Europe, Middle East and Africa (EMEA) region, and adding responsibilities to two executives within the area.

Discovery said the moves are being made to consolidate its position as a leader in real-life content across all platforms in the markets and create an environment that will help drive growth.

Discovery has made substantial investments in the region over the years, the biggest being its purchase of sports network Eurosport and the acquisition of premium sports rights for the Olympic Games from 2018-2024.

Related: Discovery Selling Mobile TV Olympic Rights in Europe

The company also has launched new direct-to-consumer offerings like Dplay in Italy, Norway, Sweden and Denmark, as well as a streaming service in Germany through a partnership with ProSiebenSat1.

Under the new structure Marinella Soldi will take on the expanded role of chief strategy officer EMEA & managing director Southern Europe and James Gibbons will become general manager UK/Ireland, Australia & New Zealand and head of commercial development EMEA. Both will report to Kieli.

Related: Discovery Names Susanna Dinnage Global President of Animal Planet

“Kasia has demonstrated great vision and determination with unmatched expertise in managing what is probably one of the most complex and diverse regions in the world,” Discovery Networks International CEO Jean-Briac Perrette in a statement.  “EMEA represents our largest region in terms of revenue as well as the focus of considerable investment in the past and big ambition for the future. I have no doubt that under Kasia’s strong and effective leadership, we will see our combined EMEA organization continue to grow to new heights and in unimaginable ways.” 

A 17-year Discovery veteran, Kieli previously managed operations across 112 markets that formed Discovery’s CEEMEA operations.

“I joined Discovery in 2000 because I loved the brand, believed in its values and saw the opportunities it was creating,” Kieli said in a statement. “I still share that very same excitement with millions of viewers who come to watch our programs every day to be entertained, inspired, and amazed. After 17 years, my belief in Discovery is stronger than ever. It is an exhilarating time as we can now offer our fans so many new ways to engage with the content they love through multiple partnerships, platforms and devices.”

Paul Guyardo, Discovery Communications's chief commercial officer, will be terminating his employment with the company to pursue other opportunities, effective Dec. 31, the programmer said.

Guyardo previously had been with DirecTV and was a key to Discovery getting into direct-to-consumer and over-the-top businesses.

Related: Discovery Puts Numbers on Direct-to-Consumer Business

Discovery will be treating Guyardo’s resignation as a termination without cause under his employment agreement, the company said in an SEC filing Thursday (Nov. 16).

The company said Guyardo has agreed to effectuate a smooth transition of his responsibilities, which will be allocated across existing leadership at the company, which is in the process of acquiring Scripps Networks Interactive.

Discovery said it does not plan to appoint another chief commercial officer in the near future.

This is being called the golden age of TV programming for scripted shows, in particular.

More shows than ever are being produced, viewers are binge watching them hours at a time through video on demand and streaming services like Hulu and Netflix. And media companies are making piles of cash licensing shows to streaming services, or using them to build their own subscription businesses.

Nonfiction programming has always been a bit of a stepchild in the programming world. People watch, sure. But even the best reality doesn’t get the same acclaim. Nor is it seeing the same kind of demand in this era of peak TV.

All of which leads to the question: What is reality programming’s value in an increasingly on-demand world?

While some nonfiction programming appears on Netflix and Hulu, the opportunities have been more limited.

“With respect to the subscription video-on-demand space, there has been no interest at this particular time in any of the reality types of programming,” one studio executive said.

Unlike networks, which need to fill a programming grid, buyers in an on-demand world are looking for shows that will give their services cachet and recruit and retain subscribers. “Reality is popular on networks, but it’s still viewed as voyeuristic. It’s not necessarily high-end programming,” the studio executive said.

Finding Viewers on SVOD
But as subscription services proliferate and mature, their attitude toward nonfiction could be changing. Viewers are watching more reality shows on demand. Streaming services are showing more interest in creating their own unscripted programming and adding existing shows to their offerings.

According to comScore, the top 10 rated reality programs for the 2016-17 broadcast season garnered more than 66 million VOD transactions, up 26% from the prior broadcast season’s reality programs. The gain came as overall VOD transactions dipped 3% from the prior year.

“I talk to people who produce shows for Discovery, Scripps Networks and A+E [Networks], and they all say they’re getting more interest from SVOD,” MoffettNathanson Research analyst Michael Nathanson said. “Given the price of scripted programming is going up, they’re looking at unscripted, which is less expensive, so they can raise their margins.”

Hulu currently pitches subscribers what it calls the largest offering of unscripted programming available on a streaming platform, with thousands of episodes from Scripps Networks, A+E and NBCUniversal.

“As SVOD programmers, we are always looking for content that will drive subscriber growth and keep viewers engaged,” Hulu vice president of content consumption Lisa Holme said. “We see unscripted series as an excellent driver of engagement and consumption, which correlate highly with retention. In the case of Hulu, we uniquely have a very robust advertising business, and so driving lots of hours of consumption is a priority for us, and unscripted can be a cost-effective way to balance the overall portfolio of content.”

Holme said Hulu subscribers watch a lot of unscripted programming. It accounts for a double-digit share of overall consumption on the service. “Outside of catching up on the latest episode of current series — The Voice, The Bachelor, etc. — we see a lot of viewing of character-based reality and competition-based reality, as well as, more recently, … food, home, travel-related series,” she said.

Prior seasons of broadcast series such as CBS’s Survivor and Amazing Race are popular, too. “People are often surprised that prior seasons of those series, as well as series like [Real] Housewives and [Keeping Up With the] Kardashians are consumed as much as they are on Hulu,” Holme said.

Netflix did not return calls seeking comment on nonfiction programming. Netflix’s reality offerings include Skin Wars, Tornado Hunters, America’s Funniest Home Videos and Undercover Boss.

Audiences as Loyal as Scripted Fans
TV networks say unscripted shows attract loyal audiences just like scripted programs.

“People want to be entertained, whether by scripted or unscripted,” Nancy Daniels, president and general manager of Discovery Communications’ s TLC, said. “They seek out what connects with them. We’ve seen big success with our shows even in this landscape where there are so many choices.”

While it’s harder to get viewers to watch reruns, Daniels said people watch old episodes of series like Little People, Big World to see what the characters looked like when they were younger. “The twins, Jeremy and Zack, have gotten married. They’re having children of their own. But you can go back to when they were 10 years old, starting out,” she said.

While TLC shows still get the bulk of their viewership on the linear channel, the shows that do best on the network also do best on demand or on the TLC Go app. TLC this year created an original spinoff of its 90 Day Fiancé franchise for the app called 90 Day Fiancé: What Now. “It’s been a huge driver for us on Go,” Daniels said.

Off-channel viewing is becoming an important factor in deciding which TLC series get renewed, Daniels said. “We’re not just looking at linear ratings anymore; we’re looking at overall audience engagement,” she said. “That’s certainly been an evolution for us over the last couple of years.”

App viewing is one way Discovery Communications is monetizing its mainly nonfiction programming.

“When it comes to Discovery unscripted, ours has tremendous value,” Discovery Communications chief commercial officer Paul Guyardo said.

Guyardo said that about 40% of what’s being watched on Discovery’s Go apps is library content, as opposed to current series. “Forty percent is a lot bigger than we thought,” he said.

For series on Investigation Discovery, people are streaming episodes they’ve already seen, “to pick up on clues that they didn’t catch the first time,” Guyardo said.

Discovery Communciations is not selling its programming to Netflix. It does have some shows on Hulu. The company is focusing on getting its core networks included on skinny bundles being offered by virtual distributors being rolled out by Hulu, DirecTV, YouTube and others.

Guyardo insists there’s demand for Discovery’s unscripted programing. “It’s our choice not to sell it in pieces, but rather to feature it all on our own digital platform or in skinny bundles, so we’re getting all the shows’ branding and equity.”

He added that Discovery’s programming is a good deal. “If you look at it relative to what distributors are paying for sports or paying for scripted, I would say we are an exceptionally good value.”

Producers said the subscription services are coming to them looking for original unscripted shows.

“Nonfiction may not be as sexy, but it’s very, very cost-effective,” said John Ford, a former Discovery executive and now general manager of NPACT, a trade association representing non-fiction programmers with about 100 member companies. “So you look at broadcast and cable any time of year, you take out sports programming, and many of the top 10, top 15, top 20 programs are nonscripted.

“You can create a pretty good nonscripted show for three or four hundred thousand dollars an hour,” Ford said. “On an hourly basis, you’re spending $3 million to create a scripted show. So you get 10 times the programming for your dollars in nonscripted.”

Ford pointed out there are already documentaries about food and wine on Netflix. Netflix has commissioned the producer of the acclaimed series Planet Earth to make an eight-part series, Our Planet, due to appear in 2019.

Netflix also has some older off-network nonfiction shows as well. “It’s interesting to look, just to troll through Netflix and see all the nonfiction shows that are there,” Ford said. “You’ll find inventory that I was executive producer on back in 2005 and 2006 still lurking in the inventory somewhere.”

Ford said the production of nonfiction programming for Netflix and the other streaming services flies under the radar because the shows don’t involve big stars and budgets. “What’s going on in nonfiction doesn’t necessarily claim the headlines, but I can tell you our members are actively pitching and producing for all of the OTT services,” Ford said.

Digital Is Key to The Workshop
Tom Farrell, CEO and executive producer for The Workshop, said his company is banking on selling shows to on-demand services. Last year, Amazon Prime green-lighted a series about tennis star Novak Djokovic produced by The Workshop, with Farrell as one of the executive producers.

“Everything that we develop has an eye on the digital world now,” Farrell said. “So while we’re still finding homes in the linear space, you would be foolish not to be looking at the digital component of our business.”

Production standards for on-demand shows might be higher than those for networks. “The viewer is so much more demanding because they’re going to it consciously, rather than stumbling upon it setting there on the couch riffing through the channels,” Farrell said. “You make a conscious decision, so I think your expectations are higher.”

Discovery Communications’ Eurosport unit and Snap have formed an agreement to create Olympic content for Europe on Snapchat’s Discover platform.

The companies said it was Snap’s first multi-language European deal.

Related: Discovery Selling Mobile TV Olympic Rights in Europe

The plan is to attract younger viewers with mobile content offering behind-the-scenes action from Olympic events including snowboarding, downhill and freestyle skiing, and ice hockey.

Discovery’s ad sales teams across Europe will be able to offer brands the opportunity to reach younger, digitally minded viewers through Snap ad packages.

“We are thrilled to bring the excitement and passion of the Olympic Games directly to Snap’s dynamic and engaged younger audience, allowing Discovery to deliver on its promise to bring the Games to more people across more screens in Europe than ever before" said Michael Lang, president, international development and digital for Discovery International. “This partnership delivers original content, through Discovery’s unparalleled and innovative storytelling of the Olympic Games, to one of the most powerful and influential social media platforms in the world.”

Ben Schwerin, vice president of partnerships for Snap, said “Snapchat gives sports fans an unparalleled way to experience the Olympic Games and engage with their favorite athletes and teams. Discovery has already been a great collaborator for us, reimagining their iconic Shark Week franchise into a show for Snapchat. We’re thrilled to be expanding our partnership to give Snapchatters across Europe the best Olympic Games experience possible.”

Discovery and Snapchat already work together in the U.S. where Discovery creates mobile shows for Snapchat’s Discover platform. During Discovery’s Shark Week, 17 million viewers watch Shark Week on Snapchat.

Snapchat is used by 57 million people daily in Europe, the company said.

“We couldn’t be more excited to be the ‘The Home of the Olympics’ on Snapchat in Europe, and to give our Olympics sponsors and advertising partners exclusive access to the audiences and conversations that only Snapchat can deliver during one of 2018’s most high-profile sporting events,” said Jonathan Davies, managing director, International advertising partnerships for Discovery and Eurosport.

Discovery Communications has unveiled the first installment of its multipronged direct-to-consumer strategy, partnering with motorsports publisher TEN: The Enthusiast Network, home of Motor Trend magazine, with auto-focused Velocity in a deal that will bring exclusive on-demand content to subscribers.

Discovery first talked about the strategy last November, shortly after the launch of its Discovery Go app. Along with that authenticated online version of its linear content (which is also tied to an existing multichannel video programming distributor subscription), Discovery also hatched the direct-to-consumer plan. Velocity is the first network to try the model.

Discovery is essentially forming a new venture with TEN — TEN: A Discovery Communications Company — led by Discovery chief content officer Paul Guyardo. Velocity executive vice president and general manager Bob Scanlon will become president of Velocity and TEN video content after the deal closes later this year.

“The overall strategy is to raise the awareness of some of the content that TEN is currently creating on different platforms,” Scanlon said in an interview. “On the Velocity side, the intent is to leverage our talent — the face of Velocity — [and their] popularity, that trust and expertise to create what I call content from the cutting-room floor.” Scanlon added that content would be more process-oriented, offering deeper dives into aspects of certain shows on-demand for a price. For example, on Velocity’s popular Bitchin’ Rides, an episode where the crew installs an engine into a vehicle could be shown in greater detail on-demand.

Scanlon added that the move is about tapping the rapport and trust the talent has built with the audience, “to convince them this content is legit, it’s OK and it’s stuff that you’re not going to get on Velocity. It’s really in the weeds for true enthusiasts.”

Scanlon said it is essential that the content provides something to viewers they can’t get anywhere else. But the segment seems ripe for the kind of detailed content Velocity wants to provide.

Packaging and pricing for the offerings haven’t been decided yet, but Scanlon said he has other ideas for the service as well, including taking a page from the traditional TV playbook.

“I’ve got some other ideas about creating the idea of appointment viewing behind the paywall, a show that would really require viewers to tune in at a certain day and time in order to see something time-sensitive,” Scanlon said. “That increases the value.”

Discovery Communications has formed a joint venture with automotive magazine publisher and content provider TEN: The Enthusiast Network, pairing its Velocity pay TV network with iconic industry brands like Motor Trend to create an offering that will encompass all screens and platforms.

The deal comes just days after Discovery agreed to purchase Scrpps Networks Interactive in a deal valued at $14.6 billion.

The deal appears to be the first step in Discovery’s previously announced plan to offer direct-to-consumer programming. The new venture – to be called TEN: A Discovery Communications Company – will be headed by Discovery Communications’ chief commercial officer Paul Guyardo, who will become chairman and CEO of the venture in addition to his current responsibilities. Also leading the new venture will be Scott Dickey, president of TEN, and Bob Scanlon, who will be appointed president of Velocity and TEN Video Content. Both Dickey and Scanlon will report to Guyardo.

TEN has more than 20 brands across the automotive space in addition to Motor Trend, including Hot Rod, Roadkill and Automobile. The venture will create a top automotive media company in the U.S. and an unrivaled destination for automotive enthusiasts, auto buyers and advertisers looking to reach this high-quality audience on all screens and platforms. Discovery will take a majority controlling interest in the venture.

“Continuing with Discovery’s strategy to reach superfans on all platforms in popular and durable content categories, this joint venture brings together the most trusted media brands in the automotive industry to create a multiplatform business with the reach, talent, and consumer insights to nourish car enthusiasts on all devices,” Discovery CEO David Zaslav said in a statement. “By combining popular brands like Motor Trend, Hot Rod and Velocity, this venture will create a content engine that fuels not only our linear platform but also new direct-to-consumer, social and mobile opportunities with the goal of owning the car vertical across all platforms.”

The new venture also is expected to give advertisers a unified offering with a combined reach of more than 150 million automotive superfans and car buyers, proven expertise in the branded content space, as well as sophisticated audience targeting capabilities.

While TEN’s print businesses will not be contributed to the new venture, a commercial agreement will allow for continued cross-promotion between the print portfolio and the new venture for a true multiplatform, 360-degree advertising offering.

“This venture is about giving advertisers the quintessential way to reach auto enthusiasts, prospective car buyers and an affluent male audience that buys a lot more than cars,” uyardo said in a statement. “It’s also about giving consumers OTT access to world-class automotive content on every screen.”

As part of the venture, Discovery will add Velocity content to TEN’s Motor Trend OnDemand subscription video on demand (SVOD) service. Motor Trend OnDemand will feature thousands of hours of automotive video, including exclusive original series, such as Roadkill, Head2Head, Dirt Everyday and Ignition alongside motorsports and live auto event content. Motor Trend OnDemand also will offer new, original content featuring some of the best-known talent from series across TEN and Velocity, including Wheeler Dealers, Bitchin’ Rides, Barrett-Jackson Live, Fantomworks, Speed is the New Black, Iron Resurrection, The Auto Firm with Alex Vega, and Garage Squad, and will be available across connected devices via IOS/Apple TV, Google Play, Roku, Xbox, Chromecast and Amazon platforms.

“Velocity is the fastest growing network on cable since launching in 2011 and is the #1 television destination for automotive super fans, with a stable of experts and personalities that represent the most respected names in the car world,” Scanlon said in a statement. “By combining Velocity and TEN’s high-quality content, wide-reaching talented hosts and comprehensive production expertise, we are creating a powerhouse of short-, mid- and long-form content for the passionate and growing base of automotive super fans in the U.S. and around the world.” 

In the future, TEN has an option to put its stake in the venture to Discovery at fair market value. Discovery will have an option to acquire 100% of the new venture.

TEN is a portfolio company of GoldenTree Asset Management LP.

BTIG media analyst Rich Greenfield has long warned that the traditional programming model was eroding more rapidly than the industry thinks, telling traditional programmers that if they don’t do a deal quickly, they may be too late. While that stance has led to varied and emotional response from content companies, recent deals seem to show that at least some programming execs may have been listening.

“Over the past 10 months, industry fundamentals have eroded with it becoming increasingly clear to investors that the era of cable networks’ over-earning at the expense of the consumer is coming to a screeching halt,” Greenfield wrote in a blog Wednesday.

After AT&T’s blockbuster announcement to purchase Time Warner for $108.7 billion in stock, cash and assumed debt, the floodgates were expected to open with programmers all seeking a way out of what is a rapidly changing business. That didn’t happen but there have been some deals – Lionsgate’s $4.4 billion buy of Starz and last week, Discovery Communications’ $14.6 billion agreement to purchase Scripps Networks Interactive. Greenfield pointed to the heavy cash components of some of those deals – AT&T/Time Warner at 50%; and Discovery/Scripps at 70% -- as an indication that programmers are losing faith in the future.

Now, that might not seem to be entirely fair. Discovery and Scripps, for their part, have said their deal is a means to secure continued strong affiliate fee increases and could lay the groundwork for a future direct-to-consumer offering, much like what Greenfield and other analysts have been proposing for other programmers. And AT&T-Time Warner hasn't been completed yet, so there is still a chance for that deal.   

But historically, companies make all-stock acquisitions for two reasons – tax implications and a hope that as the stock rises the deal is worth more down the road. Taking mostly cash usually means that you don’t believe that the stock is going to appreciate. Or, if you're an individual, you won't be around long enough to see it appreciate.

Not to say all those all-stock deals were good -- AOL’s purchase of Time Warner Inc. in 2000, anyone? – but they were struck with an optimistic eye toward the horizon. That seems to have disappeared as programmers struggle with rapidly changing viewership trends, declining advertising and declining subscribers.

“Lack of confidence in the future is clearly driving a strong desire for cash-heavy exits,” Greenfield wrote. “Now the question is should everyone head for the exit and who will try to scale up to temporarily mitigate the secular challenges facing the legacy media industry?”

For Greenfield, the next steps should involve laundry list of programmers, but the most interesting in my book involve Disney, Fox, and AMC. I encourage you to investigate his blog to get the details.

Greenfield has been a staunch critic of Disney and its falling ESPN subscribers, but at this point he believes only the biggest tech giants can afford a deal, and they’re not biting. Instead, he sees Disney making a “series of strategic acquisitions in the coming year to diversify away from cable networks and build direct-to-consumer relationships and data on their consumers.”

At Fox, Greenfield hopes they will follow Time Warner’s lead and be acquired, but given Murdoch family control, he doesn’t expect that to happen. Fox has instead focused on consolidating it’s U.K. satellite company Sky – still winding through the approval process.

Smaller programmers like AMC, he noted, have done some interesting content deals with YouTube TV, Charter and Comcast, but Greenfield sees them as more a seller than buyer. For MSG Networks, the analyst expects it will be the same, more likely as a tuck-in acquisition for Fox, Comcast or another distributor with exposure to the NY market.

Perhaps the most interesting Greenfield scenario is for Comcast/NBCUniversal. Greenfield notes that NBCU made a mid-sized content purchase -- DreamWorks Animation for about $4 billion in 2016 – but he has higher hopes.

“Given the unique regulatory environment, we continue to believe Comcast should attempt an M&A Hail Mary by trying to buy Charter and if they want to focus on smaller deals with less regulatory risk, Spotify, Twitter and MGM would all be at the top of our lists,” he wrote.

Discovery Communications said it signed a definitive agreement to buy Scripps Networks Interactive for $14.6 billion in cash and stock.

The price equals $90 a share, according to the companies—up 34% from where Scripps Networks was trading before sales rumors started on July 18. Viacom had also expressed interest in buying Scripps Networks, but bowed out of the bidding last week.

The move creates a larger programmer at a time when the industry is consolidating. But the new company still must operate in a challenging environment in which pay TV subscribers are falling and television advertising spending is growing slowly and facing strong competition from digital media.

Related: Analysts: Discovery-Scripps Merger Won’t Solve Problems

Neither company has links to a U.S. broadcaster or major domestic sports rights, so it will remain to be seen how much leverage the combined company will have with distributors.

“This is an exciting new chapter for Discovery," Discovery CEO David Zaslav said in a statement. "Scripps is one of the best run media companies in the world with terrific assets, strong brands and popular talent and formats. Our business is about great storytelling, authentic characters and passionate super fans. We believe that by coming together with Scripps, we will create a stronger, more flexible and more dynamic media company with a global content engine that can be fully optimized and monetized across our combined networks, products and services in every country around the world.”

Related: Discovery, Scripps Report Q2 Earnings

Discovery and Scripps will have nearly 20% share of ad-supported pay-TV audiences in the U.S., the companies said. Additionally, the combination will be home to five of the top pay-TV networks for women and will account for over 20% share of women watching primetime pay-TV in the U.S.

While making the announcement that Discovery Communications had agreed to buy Scripps Networks Interactive, the two companies released second- quarter financial results.

Discovery said its second-quarter net income dropped 8% to $374 million. The company attributed the downturn to currency fluctuations, losses from equity and solar investments. Earnings per share were 64 cents, down from 66 cents a year ago.

Revenue at Discovery rose 2% to $1.745 billion.

At Discovery’s U.S. networks, operating income rose 4% to $567 million. Revenue rose 2% to $890 million.

Distribution revenue was up 4%, while ad revenue hit $472 million, flat versus $471 million a year ago.

Scripps Networks Interactive’s preliminary results for the second quarter shows income from operations before income taxes were $400.8 million, up 20.8%.

Read more at B&C.

Viacom has withdrawn its interest in acquiring Scripps Networks Interactive, sources said.

The company had reportedly given Scripps Networks an all-cash offer worth $10.6 billion earlier this week.

Discovery Communications, which started the merger talks that seem to have put SNI in play, is still talking with the company.

Related: Scripps, Discovery Stocks Soar on Deal Speculation

For a cable programmer like Discovery or Viacom, acquiring SNI -- with its strong brands led by HGTV and Food Networks -- would create greater scale at a time when distributors are consolidating and consumers are seeking lower cost skinnier bundles of channels.

But analysts say a combination of Discovery and Scripps would not address the industry’s main problems of declining ratings, slow ad revenue growth and subscribers shifting from pay TV to digital video. 

News of Viacom’s withdrawal from the bidding for Scripps was earlier reported by Variety.

Viacom is offering to buy Scripps Networks Interactive for $10.6 billion in an all-cash deal, according to a report from Reuters.

Discovery Communications is also reportedly bidding for SNI, which runs cable networks including HGTV, Food Network and Travel Channel.

Viacom, which is trying to recover from a loss of viewers and ad revenue at its cable networks, including MTV, Nickelodeon and Comedy Central, already has $12.17 billion in debt, which means a bid would stretch its ability to raise money.

The Reuters report, pegged to sources familiar with the matter, said Discovery was not expected to make an all-cash bid.

None of the companies involved commented.

Discovery Communications is in talks to combine with Scripps Networks Interactive, according to a report in theWall Street Journal.

Terms of the potential deal couldn’t be learned by the paper, which added that another bidder for Scripps could emerge.

The report come amid difficult times in the cable TV business as more consumers drop their pay TV subscriptions and watch digital video instead.

Discovery and Scripps both own mainly non-fiction cable channels and do not have ties to the broadcast networks or sports franchises that would make them must-haves as programming bundles get skinnier.

Go to broadcastingcable.com for the full story.

Discovery Communications’ European sports network Eurosport won its fight to stop the largest satellite TV service provider in Germany from marketing itself as the exclusive home of Bundlesliga soccer, after a German court issued an injunction against Sky Deutschland, adding that the satellite service mislead consumers.

The Regional Court of Cologne, 31st Civil Chamber issued the injunction late Monday. According to the ruling, the court found deceptive consumer practices in Sky Deutschland’s campaign “Every Game, Every Goal” regarding its coverage of Bundesliga soccer. Sky Deutschland had been the exclusive provider of Bundesliga soccer until last year, when the league opened up bidding for its games to other providers after the Federal Cartel Office, Germany’s anti-trust agency, initiated the “no-single buyer rule” for rights to the matches. Eurosport has the rights to 40 Bundesliga games, while Sky Deutschland airs 572 of the 612 games each season.

Sky Deutschland is a subsdiary of Sky plc, which is in turn controlled by 21st Century Fox. The German ruling comes as Fox awaits word from U.K. regulators on whether it will be allowed to buy the remaining interest in Sky plc it doesn't already own. That decision is expected to be announced on June 29.

“Discovery has an obligation to ensure fans understand which Bundesliga matches they can watch, when they can watch them, and where,” Discovery Networks Deutschland said in a statement. “With consumers at the core of our business, we therefore felt it necessary to take action against Sky Deutschland, who have blurred the lines between fact and fiction, stating that all matches in the upcoming season will only be available on Sky’s platforms. A claim that Sky has been making that is complete fiction and in our view detrimental and confusing, to millions of sports fans throughout Germany.”

Beginning in August, Discovery Networks Deutschland will air every Friday night primetime match, five Sunday afternoon and five Monday evening matches exclusively, as well as the Supercup and four relegation games. All of the matches will be available through Discovery’s direct-to-consumer offering, the Eurosport Player, on the TV screen, computer and mobile devices.

“We look forward to continuing our strong partnership with the DFL and showcasing football to the highest standards for football fans in Germany,” Discovery Networks Deutschland continued in its statement.

Investments in solar power cut into profits at Discovery Communications, whose U.S. networks increased operating income by 6% in the first quarter.

Net income fell 18% to $215 million, or 37 cents a share, from $263 million, or 42 cents a share a year ago, because of the timing if the company’s investment in solar power, and a $34 million debt extinguishment charge, the company said.

Revenue rose 4% to $1.613 billion.

Read more at broadcastingcable.com.

Discovery Communications has promoted Savalle Sims to general counsel.

Previously deputy general counsel, Sims now will lead the company's global legal teams and manage all legal issues across its locations worldwide. She will continue to report to Bruce Campbell, chief development, distribution and legal officer.

“Savalle is a strong leader, with an incredible legal mind and strategic approach that has served Discovery exceptionally well,” Campbell said of Sims, a member of MCN's Wonder Women Class of 2016.

As deputy general counsel Sims managed Discovery’s litigation and trademark legal teams, handling the company’s intellectual property issues. Prior to that she was senior vice president of litigation and intellectual property.

“She is the ideal choice to manage Discovery’s high-functioning legal team supporting our complex global business," Campbell said.

Before joining Discovery in 2011, Sims was a partner in the commercial litigation department at Arent Fox, LLP, in Washington, D.C., where she spent more than 10 years working on complex commercial litigation and intellectual property matters, including several engagements with Discovery.

Sims holds a Bachelor of Science degree from Syracuse University and Juris Doctorate from University of Notre Dame Law School. Discovery’s board is expected to formally approve her appointment as an executive officer in May.

Providing further evidence of social media’s influence on programmer strategies, Discovery Communications has inked a new deal to create short-form videos exclusively for Snapchat and its Discover platform.  

The initiative, focused on Snapchat’s “mobile-first” audience, will center on short-form shows “inspired” by Discovery programming properties such as Shark Week and MythBusters. The initial slate for Snapchat are expected to debut in the U.S. in the “coming months,” they said.

 They’ll also work together on ideas for sponsors that tie Snap’s ad tech and formats with Discovery’s stable of advertisers.

“We’re thrilled to introduce our iconic Discovery content to the Snapchat community,” Paul Guyardo, chief commercial officer at Discovery, said in a statement. “There are few other platforms as dynamic and engaging, especially among younger audiences.”

“Discovery are world-class storytellers who have turned unlikely subjects into cultural phenomena,” added Nick Bell, VP of content at Snap Inc. “We have seen what they can do when developing and producing creative concepts for TV and we’re excited to see what’s in store as they apply their talent and expertise to this new medium.”

LISA WILLIAMS-FAUNTROY

TITLE: Senior Vice President for Business and Legal Affairs

COMPANY: Discovery Communications

CAREER HIGHLIGHTS: Jointly lead deal-making and legal production team for Discovery Channel’s Harley and the Davidsons; led deal-making and acquisition for Discovery’s global documentary Racing Extinction; served as key business and legal affairs executive on corporate joint-venture deals involving Hasbro, OWN: The Oprah Winfrey Network and Travel Channel.

QUOTABLE: “A strong dedication to your values along with a commitment and belief in your personal and professional life goes a long way toward establishing yourself as a woman that can be recognized and appreciated.”

Read More >Celebrating Media's Influential Women: The 'MCN' Wonder Women Class of 2017|Meet 2017's 12 'MCN' Women to Watch|The 'MCN' Wonder Women Online Archive

Lisa Williams-Fauntroy has dutifully served as Discovery Communications’s legal warrior for nearly 20 years. Though she currently manages business and legal affairs matters for Discovery Channel, Animal Planet and Science Channel, Williams-Fauntroy during her career has worked behind the scenes for nearly every Discovery-owned network, negotiating complex deals relating to defamation, publicity, privacy and copyright issues.

In her formative years, though, Williams-Fauntroy wanted to be in front of the camera, the 2017 Wonder Women honoree said.

“I wanted to be a broadcast journalist,” she said. “I loved to write and I loved to talk ... my parents would cosign on that. I was news editor of my high school newspaper; I enjoyed photography; I was a news junkie.”

Growing up in Washington, D.C., with two brothers, Williams-Fauntroy said her parents — both professors at Howard University — were her biggest inspirations. Also serving as a role model to Williams-Fauntroy in the early 1980s was a then up-and-coming talk show host named Oprah Winfrey.

COMMUNICATIONS LAW BECKONED

“She was on the air in Baltimore when I grew up, so I feel like I had a chance to see her before she moved to Chicago and before she became as grand as she is,” she said. “For a young black girl, to see her on TV then was incredibly inspiring and encouraging.”

Smitten by the journalism bug, Williams-Fauntroy attended Syracuse University’s prestigious Newhouse School, majoring in broadcast journalism. But her studies would soon lead her to another calling.

“I loved my communications law class as a sophomore at Syracuse,” she fondly recalls. “Other people thought it was weird, but I geeked out over it and I decided to go to law school.”

Williams-Fauntroy would earn a law degree from Georgetown University Law Center in 1994 before landing a job at the D.C. communications and entertainment law firm Roberts & Eckard (now Davis Wright Tremaine LLP).

“It was a great first start for me and I was very hand-son,” she said. “It wasn’t a big, shiny-floor corporate firm. It was more of a small, boutique firm where I got a lot of great experience.”

After two and a half years at the firm, she would take that experience to the legal department at Discovery Channel, then an emerging network.

“I think one of the benefits that I had was that there weren’t a lot of entertainment law firms in D.C., but my small firm had an entertainment law practice,” she said.

Williams-Fauntroy started at Discovery in 1997 as one of the most junior members of the legal department. It didn’t take her long to climb up the network’s corporate ladder. Marc Grab-off, Discovery Communications’s president of Global Business & Legal Affairs, PMD and Studios — to whom Williams-Fauntroy reports — called her a role model for people coming up within the organization and a future industry leader.

“Lisa is clearly the wonder woman of Discovery Channel as far as the business and legal affairs group is concerned,” Graboff said. “She’s a creative deal-maker — when she has deals in front of her that have difficulty being made, she comes up with creative solutions to get it done. That’s a skillset that not everyone has.”

Added Williams-Fauntroy: “I had the opportunity to grow within Discovery. I’ve had an amazing opportunity to grow and evolve with the business.”

She attributed much of her success to great mentors such as former Roberts & Eckard partner Linda Eckard, former Discovery executive Doug Coblens, and former BET executive Maurita Coley, all of whom nurtured her through positive career moments, as well as difficult times.

Williams-Fauntroy is now a very active mentor herself, becoming a leader in Discovery’s MentorNet, a structured program that allows employees to apply for an in-house company mentor.

“I think mentoring for me as a beneficiary and mentoring for me as someone who can mentor others is invaluable and critical for so many purposes and cannot be underestimated,” she said.

She also serves as co-chair and executive sponsor for Discovery’s Black Cultural Alliance, comprised of more than 80 employees within the company. Along with mentoring up-and-coming young executives, Williams-Fauntroy said the BCA over the years has developed events and projects within Discovery that “recognize the importance of diversity in our content and in our employee base.”

ON BOARD AT NAMIC

She’s also mentoring industry executives through the National Association for Multi-Ethnicity in Communications and currently sits on the diversity organization’s board.

Despite her busy schedule, Williams-Fauntroy makes sure to spend quality time with her husband Michael and her 9-year-old twins, Brett and Logan. Every so often, she finds time to indulge in her guilty pleasures of photography and watching music videos.

“I have a robust life,” she said “It’s like a pie of pizza with lots of slices and you want to give 100% to all of those slices.”

Her ability to effectively balance her work and home life has impressed many executives around her, including Michelle Rice, NAMIC board of directors chair and executive VP of content distribution and marketing for TV One. “I truly admire how effortlessly she seems to keep all the balls in the air,” Rice said. “This is no easy task for Lisa, who manages a busy East Coast-West Coast travel schedule, a demanding career, a young family and serves on multiple committees on the NAMIC board.”

Despite her lengthy and impressive list of accomplishments, Williams-Fauntroy said she hasn’t quite given up on her on-air aspirations.

“I was able to marry the areas of law and media,” she said. “The only thing I need to do now is to have my own TV show and I’d be happy.”

Sandy Wax, the former president of NBCUniversal-owned Sprout, has joined market research firm LRW (Lieberman Research Worldwide) as executive vice president and chief operating officer at a time when the firm said it is growing internally and via acquisitions. Wax's hiring comes as Jeff Reynolds has been promoted to president and COO of SWHoldings, the holding company for LRW businesses, continuing to report to long-time chairman and CEO Dave Sackman. Wax reports to Reynolds, who said in a release: "Sandy is a proven leader that will add strength to our management team and bring fresh perspective to our business. Most importantly, as a consumer of consumer insights throughout her professional career, she will have a sharp perspective on helping to make sure LRW remains focused on driving business impact for our clients, which is at the core of our strategy.”

Wax, who was the top executive at Sprout from soon after its launch as a joint-venture owned, pre-schooler network and through its full acquisition by NBCU in 2013 until leaving in 2016, will oversee key operations and administrative teams at Los Angeles-based LRW and guide operations integration with future acquisitions, the company said. Prior to Sprout, Wax held leadership positions at Disney including senior vice president, brand strategy and research. She also spent seven years as VP of research and planning at Discovery Communications Inc.

LRW said Reynolds joined the company in 2003 as a research director and quickly moved through the ranks to VP, general manager and ultimately president of LRW in 2010. 

LRW also has offices in London, New York, Philadelphia, Chicago and Orange County. In 2015, with capital raised with Tailwind Capital Partners in New York, LRW has made three recent company acquisitions so far as part of a planned series of deals.  Sackman said in the release: “Jeff’s well-earned promotion supports our goal to become the leading consulting firm utilizing integrated data analytics in the market research industry. Our vision includes rapid organic growth along with carefully targeted strategic acquisition, and Jeff’s expanded role will deliver the collaboration and alignment needed to bring our brands and a diversity of data streams together to provide greater action-oriented recommendations for our clients.”

Cable stocks had a strong run in 2016 — distributor shares increased almost 40% for the year — and with a more business-friendly presidential administration set to take hold later this month, the sector has ample runway ahead, according to several analysts.

That kind of optimism wasn’t quite so evident before the Nov. 8 election, when analysts had expected more scrutiny of media companies and pressure to keep pricing low and access high under another Democratic administration. But after Republican candidate Donald Trump’s surprise win, Wall Street’s attitude toward the sector has switched from “anything but” to “anything goes.”

“After yet another year of strong outperformance for cable stocks, investors might be forgiven for assuming that all the good news must at long last be fully discounted in the sector,” MoffettNathanson principal and senior analyst Craig Moffett wrote. “On the contrary, however, we think there is a good deal more room to run.”

Related:Viewer Watch 2017: Download the Complete Report [subscription required]

BARRIERS GET LOWER

Moffett’s optimism is fueled by three factors: lower taxes, less regulation and lower capital intensity.

Lower taxes, one of the promises of the new administration, should help lift all boats in the market. But cable, with high cash-flow margins (around 39% to 40%), low capital intensity (around 15%), could increase its trading multiples from about 7 times cash flow to 9.5 times cash flow if the corporate tax rate dips from 38% to 15%, according to Moffett.

On the regulatory front, the Trump administration is expected to reverse Title II regulation of the broadband business, which could open the door for usage-based broadband pricing and even material charges for interconnection or peering, two items that were off-limits under outgoing Federal Communications Commission chairman Tom Wheeler.

Related:The FCC's New Playbook

Capital intensity is expected to drop as more and more functionality is placed in the cloud and more customers get their video through apps, extending the life of set-top boxes in the field and reducing the need to buy new ones. Moffett estimated that a reduction in capital intensity from 15% to 13% would result in an increase of warranted valuations of almost a full turn of cash flow.

Telsey Advisory Group media analyst Tom Eagan was encouraged by cable’s subscriber performance for the year. While pay TV subscribers fell harder in 2016 than in the prior year, cable nearly halved its losses for the year.

That could encourage some privately held cable operators to tap the public markets. Altice USA, the domestic arm of European telecom company Altice N.V., has already said it is investigating an initial public offering of a minority interest in the U.S. cable operation. Eagan said he believes others could step up to the IPO plate in 2017, including privately owned Cox Communications and Mediacom Communications.

Moffett said increased competition from over-the-top services could erode customer growth, but that the greatest threat could come from 5G wireless services. The higher-speed data technology is expected to take years to fully deploy, but already Verizon has said it plans to conduct trials in 2017.

Related:New Normal: Digital Distribution [subscription required]

“If there is a downside risk to multiples, this is it,” Moffett said of 5G.

The analyst was less fearful of OTT services, in part because they have been here for years and also because what was supposed to be the category killer — AT&T’s DirecTV Now — has been plagued early on by spotty service and disruptions. New OTT offerings from Hulu and Google in 2017 are expected to have an impact, just not a very great one.

“In all likelihood, however, these services will pose a bigger headline risk than they will a financial one,” Moffett wrote. “Cable’s broadband moat provides a very powerful pricing counterbalance. By charging a premium for standalone broadband, and by upselling a portion of cord-cutters to faster broadband tiers, cable operators can relatively easily insulate themselves from subscriber losses to cord-cutting.”

On the programming side, 2016 was a mixed bag as cord-cutting and skinny bundles chipped away at what was once considered to be rock solid subscriber bases. The Walt Disney Co.’s ESPN took the highest-profile hit — it lost an estimated 7 million subscribers over the past two years and about 10 million since 2010 — but across the board networks averaged a loss of about 2% of their subscribers. That had a domino effect on other parts of the business, affecting affiliate fees and ad rates for even the strongest networks.

AT&T’s pending $108.7 billion purchase of Time Warner Inc., expected to close by the end of 2017, gave a lift to programmers and refueled interest in vertical integration. If that deal passes regulatory muster — and many analysts believe it will — it could start a chain reaction in M&A. A more laissez-faire regulatory attitude also could strengthen existing vertically integrated Comcast-NBCUniversal and others by allowing exclusive content for distributors.

OUTLOOK ON MEASUREMENT

Eagan said that despite negative headlines for the advertising business overall, ad agency stocks and fundamentals performed well. On the measurement side of the business, Eagan noted that Nielsen may have won the battle but not the war, saying both Nielsen and comScore will “benefit from marketer demand for third-party digital metric verification.”

Internal stresses helped pressure Viacom into another year of poor performance as infighting between CEO Philippe Dauman and controlling shareholder Sumner Redstone resulted in the former’s resignation in August. While the stock got a lift from talks concerning a recombination with former corporate sister CBS, those discussions ended in December with no deal.

While the hope is that new CEO Bob Bakish, a longtime Viacom international executive, can turn things around, it could take time. Meanwhile, Viacom’s ad revenue continues to slide, executives continue to leave, and its once-strong Paramount film studio limps along.

“For Viacom, if anything could go wrong for them, it did,” MoffettNathanson senior research analyst Michael Nathanson wrote in a note to clients.

AMC Networks, parent of AMC, IFC, WE tv, Sundance and BBC America, saw its stock drop more than 50% in 2016 as investors worried that it was too dependent on one program, albeit a big one: The Walking Dead. While that series remains the No. 1 scripted show on television, AMC is facing increasing pressure to come up with hits, as are other programmers like Scripps Networks Interactive (parent of Food Network and HGTV) and Discovery Communications.

Related > Viewer Watch 2017: Download the Complete Report

With new business models proliferating almost as fast as new consumer-electronics devices at this year’s CES, TV executives are recalling 2016 as a year of landmark changes that will produce even more profound developments in 2017.

“In the last year, there has been more change in the video business than we saw in probably the past five years,” said Matthew Strauss, executive vice president and general manager of video and entertainment services for Comcast Cable. “We’re just continuing to find the competitive landscape shifting. There are more services being delivered over the top to consumers. There is the growth and proliferation of Internet-connected TV devices like Roku, Apple TV or Amazon Fire. And you are also seeing new services that are delivering bundled over the top channels like Sling TV, Sony’s PlayStation Vue and DirecTV Now.”

In response, programmers and operators have introduced a flurry of new products. “In terms of video, this has been one of the biggest for Cox in all the years I’ve been here,” Steve Necessary, executive vice president of product development and management at Cox Communications, said.

Less obviously, operators and programmers continue to make massive investments in their technology infrastructures with important implications for their offerings in 2017 and beyond.

“As a company, we are investing and positioning content to be consumed on more and more platforms every day,” Discovery Communications chief technology officer John Honeycutt said, stressing that the programmer is rapidly deploying new cloud and software-based infrastructures so it can adapt to consumer needs and quickly roll out new services. “We are in the middle of a revolution in our supply chain.”

Related: Old Controversies and New Businesses

DIGITAL-FIRST REALITY

Much of this reflects longstanding changes in consumer behavior and the underlying economics of the TV, digital and media industries.

Vincent Letang, executive vice president of global market intelligence at Magna, said 2016 was the first year digital advertising exceeded total TV advertising in the U.S., garnering 39% of the total ad spend versus 37.4% for TV. Digital advertising is set to exceed total TV advertising worldwide for the first time in 2017, he added.

“We are forecasting that in five years, digital will grow to 56.0% of total advertising [in 2021 in the U.S.] while TV will plateau at 29.9%,” he said. Meanwhile, content creators and distributors are following the flow of money into digital media, fueling rapid growth in consumption of TV shows on mobile devices, computers and TVs connected to the Internet.

“The cliché of how consumers ‘want my content when I want it, where I want it and how I want it,’ is now a truism,” Mike Vorhaus, president of Magid Advisors at Frank N. Magid Associates, said. “Just five years ago, it was hard to find a lot of content. But now, in 2017, I’m really the captain of my media ship in a way that was not true in the past.”

Given ongoing rapid growth in the usage of mobile and connected TVs, it is difficult to call digital video “mature.” But researchers stress that the tectonic changes in how video is consumed and delivered have already made digital media a central part of the TV business.

“After four or five years of talking about alternative ways to access video and watching significant growth in its usage, we are now at a point where it is pretty much established,” Howard Horowitz, president and founder of Horowitz Research, said. “It’s not a fly in the ointment, but part of the business. Digital self-managed access to video content is with us and mostly that is a good thing for all the players.”

DISRUPTIVE GAINS

Others agree. After ticking off a long list of new products and initiatives designed to realign their offerings with newer consumer behavior, Comcast’s Strauss said: “Our third-quarter video results were the best we’ve had in 10 years. We added 32,000 video customers, which is an 80,000 improvement year over year. And if you look at the last 12 months, we are video-positive.”

Some programmers have been buffeted by the changes, which have hurt ratings, but those that have aggressively moved to capitalize on the newer delivery platforms are pleased with the results.

Bernadette Aulestia, executive vice president of worldwide distribution for HBO, noted that the launch of the OTT service HBO Now has allowed the programmer to tap into new markets and see healthy growth in the overall business. “Less than 1% of [the OTT] HBO Now subscribers are coming from our linear multichannel subscribers,” she said.

Executives from Dish Network and AT&T cited similar experiences with their respective OTT channel bundles, Sling TV and DirecTV Now, which are designed in part to tap into viewers outside of the pay TV ecosystem.

“There are about 20 million households in the U.S. that are either not engaged with pay TV or have opted to leave the pay TV ecosystems,” Tony Goncalves, senior vice president of strategy and business development for AT&T Entertainment Group, said.

That doesn’t mean that the industry can sit back and pretend it will be business as usual in 2017.

An acceleration in the decline in pay TV subscribers has caused Magna to revise its estimates of pay TV subscribers downward. There is also a great deal of uncertainty about the ad market.

These trends raise important questions about the changing use of video on various platforms — traditional TV, mobile, Internet-connected TVs, set-top boxes and other technologies. How these trends will impact the health of the industry and the kind of products that get launched in 2017 is the subject of the next story.

New Form, an entertainment studio with an array of digital distribution deals under its wing, announced this week that it has raised a $18 million “B” round from ITV and Discovery Communications

ITV is taking a minority stake and forging a strategic partnership with New Form that will bring certain content properties from New  Form to the ITV Hub starting next year. Discovery is adding to its earlier investment in New Form.

Update: With the B round factored in, New Form has raised total funding of about $30 million, the company confirmed.

New Form said the new funds will be used to further invest in development and production model, expand internationally and invest in “social programming.”

New Form said it has produced 30 pilots and sold 20 of them since launching in 2014. Its existing distribution partners include CW’s The Seed, Refinery29, YouTube Red, Fullscreen and Go90, among others.

“This investment marks a significant validation of New Form’s focus and creative output over the last two years,” Kathleen Grace, New Form CEO,  said in a statement. “Our vision for storytelling, our understanding of the audience and our unique production process, coupled with our track record with finding like-minded distributors, has made us the most prolific studio in the business and we are thrilled to have ITV and Discovery as partners for New Form’s next chapter.”

New From said LionTree Advisors acted as exclusive financial advisor, and Stubbs Alderton & Markiles LLP acted as legal advisor on the deal. Squire Patton Boggs acted as legal advisor to ITV on the transaction.

In the race to appeal to younger viewers, traditional content companies are increasingly turning toward short-form video and digital content providers, with several deals on the books over the past 12 months and more likely to come.

The latest to go short is Time Warner Inc.’s CNN, which paid about $25 million for online video company Beme, home of YouTube star Casey Neistat. As part of the deal, Beme’s 11-member staff, including Neistat — who has some 5.8 million YouTube followers — will join the news network and start a new media brand focused on millennial viewers.

Other companies have dipped their toes in the digital waters to varying degrees, ranging from NBCUniversal, which has spent about $600 million in online media sites BuzzFeed and Vox Media over the past 18 months, to 21st Century Fox, which in September paid about $6.5 million for a stake in DriveTribe, a new online motoring venture from former Top Gear stars Jeremy Clarkson, James May and Richard Hammond.

Earlier last month, Discovery Communications said it would invest about $100 million for a 35% stake in a new digital venture called Group Nine Media that would combine its science site, Seeker.com, and Sourcefed Studios production arm with pop culture site Thrillist, news site Now This and animal advocacy site The Dodo.

EXPERIMENT TIME

“Everyone is trying to figure out what the right format is,” Telsey Advisory Group media analyst Tom Eagan said in an interview. “There is going to be a lot of experimentation.”

Programmers have been trying to attract young viewers since the beginning of television. But as more and more content is available on more and more devices, snagging the coveted millennial audience means the delivery mechanism is almost as important as what is being delivered.

“What has been tried is to take a regular cable or broadcast linear service and try to make it fit,” Eagan said. “That doesn’t always work, whether it’s on a mobile device or some other device. I think they realize they not only have to change the content, but the format.”

In a recent interview, Discovery chief commercial officer Paul Guyardo called the Group Nine investment part of the programmer’s three-pronged strategy, consisting of its full product bundle, its participation in skinny bundles for more price-sensitive consumers and the creation of short-form video and content partnership Group Nine, which is aimed squarely at younger viewers.

“That’s an ad-supported model that does rely primarily on short-form [video], because that’s how millennials want to consume their content — it’s all about highlights and sound bites and snippets,” Guyardo told Multichannel News. “If you look at the way we’re building it, we’re building it in a very Discovery-esque way.”

Like Discovery, each programmer seems to be forging its own path with digital investments. At NBCUniversal, the BuzzFeed and Vox Media deals seemed to be more geared to enhancing its social media and digital advertising strengths. BuzzFeed reaches more than 500 million people per day on its various platforms, more than any other pure digital media company, and has a strong presence on social media sites like Facebook. Vox Media, which has eight separate brands including news site Recode, sports site SB Nation and the food-centric Eater, has about 170 million unique monthly visitors and 800 million total monthly content views (on- and off-platform), and two of every three of its users are on mobile devices, according to the company.

Pivotal Research Group senior research analyst Brian Wieser said practically every programmer is looking to secure a digital business, and buying established providers is frequently the quickest path to success. There are many reasons to take the digital plunge, he said.

HEDGING BETS

“Some of it is hedge,” Wieser said. “In the event alternate forms of content packaging become more common, someone knows what they’re doing. Some of it is for show to Wall Street and other constituents, just to say that ‘we’re doing this too.’ And there also can be the belief that combining small entities into larger ones, and you can build an even bigger business.”

Another reason could be a desire to align with a particularly strong management team. That’s what Wieser believes was a big driver for Disney’s 2014 investment in Vice Media, then a fledgling Canadian publisher and multimedia company with a brash CEO in Shane Smith who wanted an inroad into more traditional media. With Disney’s initial $200 million investment (it invested another $200 million later that same year), Vice announced it would take over A+E Networks’ H2 channel, rebranded as Viceland. A+E Networks, which itself owns about 15% of Vice Media, is jointly controlled by Disney and Hearst.

While sluggish early ratings put a bit of a damper on the initial enthusiasm for the channel, it has been attracting young men with shows like the self-explanatory Weediquette and skateboarding reality-competition series King of the Road. In November the channel said it would launch four new shows aimed at that demographic in the next two months — Payday, which follows the lives of four 20-somethings over the course of a single pay period; Big Night Out, which showcases how millennials party around the world, and Bong Appétit, which follows cooks who create high-end, cannabis-infused foods.

“Everyone wants a piece of Shane Smith’s pixie dust,” Wieser said.

MORE MOVES SEEN

The analyst added that he expects more deals to be done, but to what extent will depend on each individual company. At Fox, which in the past has leaned more toward developing new properties internally, Wieser believes that practice will continue.

Time Warner and NBCU are expected to continue on their previous path of making small venture investments in digital companies, he added.

“Do we expect to see more [deals]? Sure. I don’t see why not,” Wieser said. “You can argue that most companies don’t need to hurry because it just doesn’t change that quickly. But the perceptions of change are often greater than the reality.”

SIDEBAR: All About the Digits

Major programmers are increasingly investing in much smaller digital companies to attract younger audiences and tap into online ad streams.

InvestorInvesteeInvestmentDate

NBCUniversal . . . . . . . . . . . BuzzFeed . . . . . . . . . . . . $400 million . . . . . . Aug. 2015/Nov. 2016

NBCUniversal . . . . . . . . . . . Vox Media . . . . . . . . . . . .$200 million . . . . . . . August 2015

Verizon . . . . . . . . . . . .. . AwesomenessTV .  . . . . . . . $159 million . . . . . . . . April 2016

Discovery . . . . . . . . . . . Group Nine Media . . .. . . . . . $100 million . . . .  . . .  November 2016

Time Warner . . . . . . . . . . . . . Beme . . . . . . . . . . . . . $25 million* . . . . .  . . . .  November 2016

21st Century Fox . . . . .  . . .DriveTribe . . . . . .  . . . . . $6.5 million . . . . .  . . .September 2016

AMC Networks . . . . . .  . . Funny or Die . . . . .  . . . . . . . N/A . . . . . . . . . . .  November 2016

* Estimate

SOURCE : Individual companies and published reports

Never mind the bundle. For Discovery Communications, it’s the platform, baby.

Turning a decade-old cable mantra on its ear — Cox Communications’s “It’s the Bundle, Baby” — Discovery is the latest programmer to test the digital content waters. By going all-in with the August nationwide launch of TV everywhere app Discovery Go and, more recently, striking deals to weave together short-form and long-form content from millennial- targeted websites and subscription video-on-demand, the programmer is looking to attract a younger, hipper and more lucrative audience.

Overseas, Discovery, which generates more than 50% of its revenue outside the U.S., is aggressively leveraging sports rights obtained via its Eurosport networks for a direct-to-consumer offering aimed at attracting and keeping younger viewers.

Discovery Communications CEO David Zaslav said Discovery’s digital strategy was actually hatched four years ago as viewership trends were changing toward multiple screens, devices and digital services like Netflix, Amazon and YouTube.

“We looked at the landscape,” Zaslav said in an interview last week, “and we asked: If people could watch anything they wanted on any device, how strong would we be?”

THREE-PRONGED PLAN

At the time, Discovery was at one of its strongest points. Its international business was generating about $1 billion in revenue and the company was the leading programmer in nonfiction. “If long-term, we’re going to be a robust and compelling content company to all age groups, we’re going to have to be on every platform,” Zaslav said. “Our brands were strong, but if people could watch everything, we would have some challenges.”

The solution was to embark on a three-stage attack: strengthening its networks by creating “super fans” for channels like Velocity, OWN and ID; reaching avid sports fans in Europe with Eurosport; and getting in position to offer content direct to consumers for free.

The last part of that three-pronged effort revolves around making new and existing Discovery content available on a wider variety of platforms, including TV Everywhere apps, online and digital video and, in Europe, a full direct-to-consumer offering.

READ MORE: For Discovery CTO John Honeycutt, digital is in the details.

Leading the charge is Discovery chief commercial officer Paul Guyardo, who joined Discovery about a year ago after a 10-year stint as chief revenue officer at DirecTV. A savvy marketer who led the team that helped grow DirecTV’s subscriber base from 15 million to more than 20 million, Guyardo is the point man in Discovery’s ambitious new plan, not only in charge of U.S. digital operations, but also taking over its Eurosports. com digital initiative in Europe.

Guyardo knows the direct-to-consumer business — he worked for Barry Diller’s HSN for several years and was SVP and chief marketing officer at discount retailer Kmart before joining DirecTV — and is assembling a top team to attack the digital space, including executive vice president and general manager of digital media Karen Leever; SVP and general manager of OTT and digital syndication Michael Bishara; newly promoted SVP of emerging platforms and partnerships Rebecca Howard; and managing director of Eurosport Digital Ralph Rivera, who helped launch the U.K.’s most popular direct-to-consumer product, the BBC iPlayer.

The push to digital is partly motivated by the dwindling traditional TV market, and comes after years of resistance to online video — which Discovery partly attributes to past carriage deals. Discovery has weathered the same ad-sales and distribution pressures as other programmers. In the past 12 months, domestic ad sales reversed course from a 6% increase in Q3 2015 to a 3% decline in Q3 2016. Internationally, ad sales declines have improved from a 14% decrease in Q3 2015 to a 6% decrease in Q3 2016.

Like many of its peers, the uncertainty has affected Discovery’s stock, which has declined about 9% in the past 12 months. And while ratings have softened over the past few quarters, Discovery points out that it still attracts about 8% of total viewership but just 4% of affiliate dollars.

“Every programmer is challenged with an ecosystem which is slowly declining as a function of cord-cutting, cord-shaving and cord-nevers,” Guyardo told Multichannel News. “Like all media companies, we are doing what we can to fortify that traditional business. But by the same token, we have to aggressively pursue alternative business to reflect the fact that viewership trends are changing.”

That includes investing about $100 million for a 35% stake in short-form digital content producer Group Nine, the home of pop-culture site Thrillist, news site Now This and animal advocacy site The Dodo. The idea is that, along with Discovery’s own science-based site, Seeker, and its digital production studio, Sourcefed Studios, the programmer will house its millennial-focused digital content under a single umbrella and a single salesforce, allowing the company to sell the full package to advertisers.

While Discovery is obviously optimistic, not everyone is convinced it can make a big dent in the digital landscape.

Asked if the efforts were too little, too late, Pivotal Research Group senior research analyst Brian Wieser said, “it’s just little.”

“They made an investment in a niche business,” Wieser said, referring to Group Nine. “It’s not going to allow them to call themselves a digital company. The bigger issue is: Are they developing content that survives and thrives in a world where more and more content is being consumed through dedicated apps or otherwise through streaming services?”

Guyardo doesn’t claim the shift will be easy, but he said he believes Discovery’s advantage is two-fold: It owns most of its content, and that content tends to attract what he calls “passionate super-fans.”

That allows the programmer “to go narrow and deep,” Guyardo said. “I have the luxury in this job that we own so much of our IP it allows us to be platform-agnostic.”

The platform increasingly matters: programmers are finding that digital distribution brings in additional revenue streams and can lure a whole new universe of viewers.

Discovery started dipping heavily into the TV Everywhere market last year, and its Discovery Go app is available in about 72% of the country, with full coverage expected in the next few years. Guyardo said TV Everywhere has helped draw in younger Discovery viewers. He said about 60% of TLC viewers and 50% of Discovery Channel watchers on the Discovery Go app are aged 18- 34. That compares with just 11% of that age demographic watching on linear channels.

And the streamed content isn’t any different from what is being aired on traditional pay TV.

“It’s taught us that a lot of the content that our network presidents and network teams are producing is quite relevant to a younger audience,” Guyardo said. “We just needed to put get it on a different platform to get that younger audience to consume it.”

The Group Nine investment builds on that concept by aggregating younger viewers under one corporate roof. And it gives Discovery a major instant digital presence — its brands deliver about 3.5 billion views per month — and strong credibility with advertisers.

“That puts us right up there with the likes of Buzzfeed,” Guyardo said. “Scale is a real calling card with advertisers; it’s what gets you in the door.”

Those younger viewers are also ripe for targeted ads and other forms of advanced advertising, all which have higher revenue potential.

Discovery also is taking a different tack with SVOD, launching two new OTT subscription services on Amazon’s Streaming Partners Program — True Crime Files by Investigation Discovery and Destination Unknown.

Amazon Prime members will get access to Discovery library for a small incremental monthly fee. At launch, True Crime Files will include library content from ID shows like I (Almost) Got Away With It, True Crime With Aphrodite Jones, Most Evil and Who the (Bleep) Did I Marry. Destination Unknown focuses on the paranormal and will include content from linear networks like Destination America, and series available at launch will include: A Haunting, Ghost Asylum and Mountain Monsters.

Zaslav called the Amazon offering an experiment, much like the company’s attempt to create a “sports Netflix” offering in Europe through its Eurosport Player, an OTT service that launched about a year ago and has roughly 250,000 customers paying about $7 per month for live streaming of tennis, skiing, soccer, cycling and other sports.

Zaslav said the European sports market is much like the U.S. was about 15 years ago, when ESPN first began to assert its dominance.

“In the U.S., sports took all the money, and was able to generate significant incremental value on other platforms,” Zaslav said. “Europe feels fresh. There is only one pan-European sports channel, and that’s Eurosport.”

Zaslav said Eurosport is in the second stage of a direct-to-consumer strategy, building the infrastructure and the teams behind the Eurosport Player efforts. “We have real ambition that could be a game-changer for our company.”

But the Eurosport Player isn’t totally without problems.

RBC Capital analyst Steven Cahall noted in a recent report that while the product has been successful, its customer reviews have been poor — he cited Google Play data that showed just as many customers gave the service a 1-star rating as a 5-star nod — something that its recent deal with MLB BAMTech can hopefully address. BAMTech, which counts Major League Baseball, the National Hockey League, HBO Now, the PGA Tour and WWE Network as clients, will provide the backbone for the Eurosport Player.

“If they can get it right, Eurosport’s vast portfolio of rights should drive growth from just 250,000 subs today to millions over time,” Cahall said.

Discovery Networks International CEO JB Perrette wouldn’t predict how much the Eurosport OTT Player could grow, but he said the potential, given the low pay TV penetration in the market — about 12% in Germany and 57% in the U.K. — is huge.

“We have 50-plus markets with over 700 million people,” Perrette said. “If we can get 1%, that’s 7 million people. “The numbers get big pretty quickly. And we feel like we’ve just started to rev the engine.”

Discovery first bought a 20% stake in Eurosport in 2012 and purchased the rest in a series of deals that ended in 2015. The sports channel committed $1.4 billion for European rights to the 2018 to 2024 Olympic Games and securing 45 Bundesliga soccer games in Germany beginning in 2017. It has also taken its nonexclusive Grand Slam Tennis rights exclusive and done the same for premier soccer rights in Norway.

‘REALLY MAKING PROGRESS’

Coupled with the opportunity to more aggressively market the product, Perrette said he sees ample runway for the direct-consumer service. “As we get the talent, as we get the product to be more world-class, we can actually start leaning into it and start driving the subscription funnel in a much more aggressive way.”

Discovery also is looking at different ways to exploit sports rights to create its “sports Netflix,” including offering season passes for particular sports, Zaslav said.

“Each of these initiatives is informing us of how do we approach a stronger relationship with consumers and how do we get more of our IP directly to consumers and which IP do we need more of to be successful,” the CEO said. “We’re excited because we think we’re really making progress. I think we’re really in the game of having Discovery be the media company that should be bigger and stronger in the next generation.”

SIDEBAR: Getting Game

Discovery’s Eurosport has invested heavily in sports rights over the past few years. Here are some of the properties it has purchased:

• Q115: Africa Cup of Nations (soccer), Australian Open (tennis), FISU Winter Universiade, World Championships (Alpine skiing, Nordic skiing, superbike, biathlon), FIS World Cups (winter sports), European Season Start (cycling).

• Q215: Spring Classics (cycling), FIA WTCC (touring car), World Championships (snooker), Giro d’Italia (cycling), UEFA Women’s Champions League (soccer), French Open (tennis), FIFA Women’s World Cup (soccer), Le Mans 24 Hours (motorsports), ATP & WTA tournaments (tennis).

• Q315: FISU Summer Universiade Gwangju 2015, Tour de France (cycling), UEFA European U-19 Championships (soccer), Bundesliga (soccer), World Championships (swimming, athletics), Vuelta a Espana (cycling), U.S. Open (tennis), Australian Football League.

• Q415: International China Championships (snooker), WTA & ATP Tournaments (tennis),Eurocup (basketball), FIS World Cups (winter sports), Season end (motorsports), World Championships (weightlifting), World Cup (biathlon), U.K. Championship (snooker), Four Hills Tournament (ski jumping).

SOURCE : RBC Capital

Science Channel is celebrating its 20th anniversary by enjoying its strongest ratings year among its core adult 25-54 audience in its history. With science-themed programming in the entertainment zeitgeist with such hit shows as CBS’s Big Bang Theory and HBO’s Westworld, Science is feeding its core viewers with creative and informative, star-powered shows like Through the Wormhole With Morgan Freeman, as well as longtime network favorites like Punkin Chunkin, which will make its return to the network this Thanksgiving.

Science Channel general manager Marc Etkind recently spoke to Multichannel News programming editor R. Thomas Umstead about the network’s anniversary as well as the network’s future programming and distribution endeavors.

MCN:So, at the 20-year mark, how would you define the Science Channel brand?

Marc Etkind: I think the brand is to be firmly about science, but also to be broad and popular. We are the place where you can get the latest information on space, technology, engineering and for mind-blowing science questions. We do it with tremendous talent, whether it’s people like Morgan Freeman, who hosts Through the Wormhole on our on our network. One of the things that we’re really proud of is that we’re very timely. We have science news on every night and we cover the latest NASA missions, like the recent mission to Jupiter and Comet mission. We have live cut-ins of launches … It’s a timely and relevant network.

MCN:How has the network’s programming evolved over the past 20 years?

ME: I think what’s been the same over the 20 years is this commitment to quality and to depth of information; that you can come to the Science Channel and you can be entertained, but you can learn something as well. And I think that’s something that we’ve been doing from the very beginning.

This is the No. 1 network for space information, and it’s something that this network has been doing with Through The Wormhole series and other series like Wonders of The Solar System, How The Universe Works, Space’s Deepest Secrets and Punkin Chunkin, which remains the highest-rated show in the network’s history — it’s coming back this year, and we’re super- excited to have that on over Thanksgiving weekend.

And then we have a brand new miniseries that we’re launching on Mars coming up this month. I know other networks are doing some space programming and then they do a pretty decent job of it, but if you want space on a regular basis, we are the network for that.

MCN:You mentioned other networks moving into the science genre. Once upon a time, science-themed programming was considered geeky and boring, but now science content is very prevalent on a number of entertainment-based networks. Why has science now become mainstream programming?

ME: I think what’s happening is that we are living in the midst of a science and technology revolution, and things like artificial intelligence are here in some form or another, and driverless cars are going to be here any day. You carry in your pocket a cellphone that’s more powerful than computers 20 years ago. So we are surrounded by science and technology, and so I think there’s a craving to understand it, to know how it works and also to know what’s coming next. And I think we as a network have been able to satisfy that curiosity and that need for more information. So I think we’ve just been growing along with the scientific achievements that have been happening around [us] and establishing ourselves as the place to learn more about that.

MCN:Given that, how does the Science Channel stay competitive in a very crowded and competitive marketplace?

ME: We’ve had a fantastic year so far because we’ve been able to engage and entertain and educate our audience by giving them mind-blowing information on the latest in space.

On the digital side, we’re offering content in VR and our SciGo TV Everywhere app allows people who subscribe to Science to watch their favorite shows whenever they want.

We’re always looking at ways of expanding the brand to make sure that that brand continues on whatever platform the viewers want it to be on. We have a tremendous engagement on Facebook with our superfans, and they come for additional information and the latest science news. So we’re going to continue to engage with our fans across the various platforms.

MCN:How do you see the network evolving over the next 20 years?

ME: When you look at the next 20 years of TV, there’s going to be a huge number of changes that we can’t predict.

It’s like science — it’s a revolution that we can’t predict, but we know when you have a strong brand like Science Channel we’re going to be out there giving our fans the kind of relevant information that they want.

Multiscreen video technology company Piksel said John Honeycutt, CTO of Discovery Communications, has been elected to Piksel’s board of directors.

Honeycutt joined Discovery in 2003, and was promoted to the newly created role of CTO in March 2014. Discovery rolled out its authenticated TV Everywhere service, Discovery Go, in December 2015, and sparked an initiative around virtual reality last August.

RELATED: Discovery GO Launches on Roku

“John is a true visionary in our industry and we are excited to welcome him to Piksel’s board of directors,” Peter Heiland, Piksel’s CEO, said in a statement. “We believe his strong experience, especially building a global business across both developed and emerging markets, will be extremely valuable as Piksel continues to grow around the world.”

Piksel’s customers include Discovery, AT&T, Sky, Channel 4, Liberty Global, Mediaset, OSN and Transavia.

RELATED: Piksel Forges New OTT Video Play

“I have always admired Piksel for its innovative products and dynamic leadership team, and I’m honored to be joining their board,” Honeycutt added. “I have tremendous respect for Peter, and the entire executive team, and I look forward to working with them.”

The Women in Cable Telecommunications (WICT) Southern California Chapter has announced its 2016 LEA Awardwinners, who will be honored at an awards gala on Nov. 10 at the Taglyan Complex in Hollywood.

Recipients of the prestigious 2016 LEA Awards include:

• Toby Berlin, president, School of Toby
• Del J. Heintz, senior director, state government affairs, Charter Communications Western Region
• Nadya Ichinomiya, director of IT, Television Marketing, Sony Pictures Entertainment
• Donna Thomas, senior vice president, studio sales, Vubiquity
• Erika Nolting, enterprise client executive, Neudesic, and Board Member of the Year

"WICT SoCal is thrilled to continue the tradition of honoring five outstanding individuals who lead by example and inspire us all,” said LEA Awards co-chair Rachel Richman. "This award is all that much more special because WICT SoCal relies on peers in the industry to submit nominations, and the winners are chosen by a committee comprised of past recipients.  It’s truly peer-driven recognition.”

The WICT SoCal LEA Awards are recognized as one of the most well-respected and prestigious events in the Southern California entertainment industry. The event will feature a celebrity Master of Ceremonies, keynote remarks from an industry leader and speeches by each award recipient. WICT SoCal said it expects to draw several hundred cable, programming and technology innovators who will converge to celebrate the recipients for what they have accomplished in their careers and the work they do to support, advocate and develop women leaders in media.

"In the often challenging and ever-changing entertainment industry, WICT is very proud to continue to recognize individuals that stand out and make us all proud to be in this business," said Helene Juceam,president of WICT SoCal.

Fox Networks, Charter Communications and Discovery are the event sponsors. Additional information, including sponsorship availability, can be found at www.socalwict.org. To buy tickets for the 2016 LEA Awards, visit http://leaawards2016rsvp.com.

With 10,000 members nationally, WICT is the oldest and largest professional association serving women in the cable and telecommunications industry.

Discovery Communications has named former German satellite executive Gunnar Wiedenfels as its new chief financial officer, replacing Andrew Warren, who had earlier said he would be leaving the company.

Wiedenfels will officially become CFO on April 1, from ProSiebenSat.1 Media SE, where he currently holds the same position. He will report to Discovery CEO David Zaslav and be based at Discovery’s office in New York. Warren, who had earlier planned to leave by the end of the year, has agreed to extend his contract term to ensure a smooth transition of CFO responsibilities. 

“As Discovery continues our rapid growth and diversification in new content and digital platforms around the world, Gunnar is the ideal choice to lead our global finance strategy and organization,” Zaslav said in a statement. “Gunnar's international expertise aligns perfectly with our future growth profile, and he brings to Discovery an exceptional reputation in the capital markets, strong industry expertise and a strategic focus to help unlock the value of our investments.  He will be a terrific addition to our management team and I look forward to working with him to continue to drive Discovery’s global business.”

As CFO, Wiedenfels will be responsible for leading the global financial functions and strategies of the company and will direct all accounting, treasury, budgeting, tax and investor relations activities. He will serve as a member of Discovery’s executive team and contribute to the overall strategic direction of the company.

Wiedenfels has spent the past seven years in various management roles at Munich-based ProSiebenSat.1 Media SE. As CFO of the German satellite giant, he is credited with leading the outperformance of analyst expectations and the European Broadcasting peer group, with approximately 20% valuation premium over relevant peers; 39% total shareholder return in 2015, well above benchmarks; and inclusion of ProSiebenSat.1 into the DAX index of 30 largest listed companies in Germany by market cap, as of March 2016. Since 2012, ProSiebenSat.1 has tripled revenues from its Digital and Adjacent activities to 1 billion euros in the twelve months ending June 2016. Prior to his CFO role, he served as Deputy CFO from 2014 to 2015 and served as Chief Group Controller from 2013 to 2015. Before this, he worked as a management consultant and engagement manager at McKinsey & Company.

Discovery Communications was assisted in the search process by Howard Fischer Associates, International.

Michael Bishara, an industry vet who has played a key role in pay TV’s transition to streaming distribution and authenticated TV Everywhere services, is joining Discovery Communications as SVP and GM of OTT and digital syndication.

There, he’ll head up Discovery’s OTT initiatives as well as its digital businesses for VOD, -Download to Own, Home Video and Short-Form Video Syndication products, and help the programmer grow revenue and audience reach across its digital portfolio. He reports to Karen Leever, EVP & GM, Discovery Digital Media, and is based in Discovery’s New York office.

Discovery launched its TVE product late last year and recently extended access to the Roku platform.

Bishara most recently served as SVP, digital products and  GM, OTT and TV Everywhere for Synacor, a Buffalo, N.Y.-based company that specializes in authentication products and customized portals. He previously founded and was a managing member of Sentient Digital Consulting Group, a digital media consulting firm focused on TVE for the HBO/Disney brands in Canada and supporting the development and launch of HBO GO Canada. He is also late of HBO, where he served in several roles, including SVP, HBO GO Digital Group

“Michael is an accomplished executive whose ‘first in the industry’ experience with early iterations and evolutions of OTT products has provided him with an intimate knowledge of how to develop, launch and optimize a product,” Leever said, in a statement. “We’re thrilled to have him on the team, and are looking forward to engaging even more audiences with our award-winning content in the future.”

“Discovery Communications is uniquely positioned in digital with its strong portfolio of brands – and consumers’ deep engagement with them,” added Bishara. “I look forward to working with such an incredible team and am excited by the tremendous opportunity to extend these brands and deliver new experiences while simultaneously driving incremental revenue.”

Bishara has a B.A. in Sociology and an MBA in Marketing Management from State University of New York at Buffalo. 

Update: Synacor said Anand Subramanian is now leading product at the company. He joined Synacor following Synacor's acquisition of NimbleTV in January 2015.

Discovery Communications has expanded its employee leave benefits, extending paid parental leave to 12 weeks and offering the same benefit to employees who act as family caregivers.

The new benefits will kick in on Jan. 1, 2017, Discovery said, adding that they place the programmer "among a small number of companies choosing to enhance paid family leave in the U.S., where the absence of national regulation has made America the only industrialized nation in the world without requirements for the benefit."

Across the U.S., only 13 percent of people have access to paid family leave, according to parental leave advocacy group MomsRising. Moreover, among new mothers who work, 33 percent take no formal leave at all, according to the National Center for Health Statistics.

“These paid family leave benefits further our commitment to support employees both at work and at home, where we want to ensure they have the flexibility to spend the time they need -- and deserve -- with their families during important periods of transition,” said Adria Alpert Romm, chief human resources and global diversity officer. “This new policy marks a proud moment for Discovery and is something we hope will retain and attract great talent for many years to come."

Related: 7 Ways to Make Your Company a 'Best Place to Work'

The paid parental leave benefit applies to mothers and fathers in cases of birth, adoption or foster care placement and stretches what is currently four weeks of leave paid at 100% to 12 weeks. In some cases, employees can further extend their parental leave by combining it with short-term disability leave and up to two weeks of vacation.

In terms of maternity leave, that means the total benefit now maxes out at 20-22 consecutive weeks, while total paternity leave now maxes out at 14 consecutive weeks.

The new paid caregiver leave benefit expands the definition of "family" beyond children, spouses and parents to qualified domestic partners, siblings, parents-in-law and grandparents, Discovery said.

Employees who serve as caregivers to a qualified family member in need -- "whether aging, ill or otherwise impacted by a serious health condition," Discovery said -- will now also qualify for 12 weeks of paid leave. With an option to add up to two weeks of vacation time, caregiver leave will max out at 14 consecutive weeks.

The new parental and caregiver leave policy allows employees to take their weeks consecutively or divide them up as needed over the course of a 12-month period.

Discovery said the new leave policy joins other "family-focused benefits" already available to its more than 3,000 U.S. employees, including an adoption and surrogacy assistance program offering up to $10,000 reimbursement for adoption- and surrogacy-related expenses; an on-site childcare facility at corporate headquarters in Silver Spring, Md.; and onsite wellness centers for employees and their dependents across a number of U.S. office locations.

Discovery Communications said it has signed a comprehensive carriage deal with AT&T for its U-Verse and DirecTV platforms, as well as its upcoming over-the-top service, DirecTV Now.

The deal includes Discovery’s linear networks, a robust on-demand offering and TV Everywhere distribution. Discovery’s content will be available to DirecTV and U-Verse customers via set-top boxes, streaming and temporary download through their TV Everywhere services and via Discovery’s websites and apps. Availability on DirecTV Now will commence when the service launches in the fourth quarter.

“We are extremely pleased to announce a comprehensive long-term agreement with AT&T, that provides customers with continued access to Discovery’s portfolio of loved brands across AT&T’s linear and digital platforms,” said Discovery domestic distribution  president Eric Phillips in a statement. “We are pleased that we were able to get a win-win deal done with the largest distributor in the country. Our agreement greatly expands the AT&T platforms that will distribute our award-winning content, including future distribution on DirecTV Now for our portfolio of brands.”

DirecTV Now is expected to be a game-changer for AT&T, luring customers who have so far resisted pay TV with a streaming video option chock-full of on-demand and live content. AT&T announced DirecTV Now in March and so far has signed content deals with HBO and Cinemax.

“Discovery Networks’ exceptional content adds tremendous value for AT&T’s DirecTV, DirecTV Now and U-verse customers who will now be able to enjoy it on virtually any screen,” said AT&T chief content officer Dan York in a statement. “By adding the Discovery networks to the growing DirecTV Now lineup, we are continuing to build a streaming service for the connected generation that we believe will be second-to-none in the industry.”

While terms of the deal were not disclosed, the pact is believed to be favorable for both parties, and reflects the direction Discovery has taken in past carriage deals.

In a blog post Thursday, MoffettNathanson wrote the deal also removes one of the bigger overhangs on Discovery stock -- that it could take a hit from continued distributor consolidation and could be impacted by rate resets and tiering issues that have affected other content providers like Viacom and Scripps Networks. With the AT&T deal, that doesn't appear to be a concern after all, with MoffetNathanson adding in the post that Discovery shouldn't see the same meaningful decline in affiliate fee growth as its peers. 

"One of the reasons why Discovery’s not in the same camp as some of its peers is that Discovery’s prior deal with DirecTV occurred in 2012 over this time, Discovery’s ratings have meaningfully increased," MoffettNathanson wrote. "With both Comcast and AT&T DirecTV now under contract, Discovery has completed deals with the two biggest MVPDs which should set the pricing framework for the rest of its renewal cycle."

Discovery said it is launching a new free-to-air network in the Middle East in partnership with BHS Media called Home & Health Farsi.

BHS will use Discovery content with a localized approach to meet the needs of the Farsi-speaking community. The network is aimed at women.

“Discovery has been investing in the Middle East for over 17 years,” said Amanda Turnbull, VP and country manager, Discovery Networks MENA. “The launch of Home & Health Farsi represents Discovery’s commitment to also deliver a more localized offering, with content that has been specifically curated to meet the needs of the currently underserved Farsi-speaking communities.”

Read more on broadcastingcable.com.

Pay TV subscriber rolls continued to dwindle in the seasonally weak second quarter, as losses from telco-TV service providers continued to weigh heavily on the sector.

Meanwhile, continued improvements by cable operators and declines at content providers suggest a widening gap between cord-cutters and cord-shavers.

The pay TV industry lost 757,000 basic video subscribers in the second quarter, an increase from the 683,000 it lost in the same period last year, according to MoffettNathanson principal and senior analyst Craig Moffett. Including estimates from Dish Network’s Sling TV over-the-top service, the sector lost 708,000 subscribers in 2016 and 613,000 customers in 2015.

Cable continued to temper its customer declines: It shed 242,000 video customers in the period, nearly half the 404,000 it lost in the prior year. But telco-TV losses increased exponentially at 526,000 for the quarter, compared to a gain of 5,000 in the prior year.

Satellite-TV providers continued on their roller coaster ride, adding 12,000 in the period compared to a loss of 284,000 in the prior year. Exactly where those customers are going is a little murkier. There has generally been a straight line from multichannel video programming distributor (MVPD) losses to cord-cutting, but that path has become a little less clear over the past several quarters.

The Walt Disney Co. has shed more than 4 million subscribers over the past year, while content companies such as Discovery Communications and Time Warner Inc. have estimated subscriber losses of about 2%. Those figures are based on Nielsen data that doesn’t take into account over-the-top distributors (which could number about 800,000 subscribers via Moffett’s estimates) and skinny bundles from traditional and non-traditional sources.

“[H]ere’s what we do know. Cable is doing well. The telcos are doing badly. And satellite is mixed,” Moffett wrote in a note to clients.

BTIG media analyst Rich Greenfield, who has for years warned that OTT services are a real threat to the traditional MVPD subscriber base, sees the Q2 results as more evidence that the traditional pay TV model is eroding.

Though he doesn’t expect a wholesale collapse anytime soon, Greenfield wrote in a blog post that he sees the pay TV model getting slowly chipped away.

“Just a few years ago, the industry was adding video subs at a 1-2% rate; now the industry is losing 2% through cutting/shaving, not to mention the growing pressure from cord-nevers,” he wrote. Data suggests annual losses of 3, 4 or even 5% could become reality in the next few years, he added.

“It may not happen, but it certainly feels like the big TV bundle is becoming less and less important to consumers, given a poor price/value equation,” he wrote.

Moffett said telco TV’s erosion is due partly to the “perfect storm” of a strike at Verizon Communications, Frontier Communications’s initial problems in transitioning former Fios TV markets it bought earlier this year and AT&T’s conversion of U-verse TV subscribers to DirecTV.

Even considering those developments, telco TV’s reversal of fortune is extraordinary. Moffett noted that telco TV subscriptions have gone from a 6.1% increase to a 9.1% decline in just one year.

Cable operators continued to build on the momentum of past quarters. Comcast improved its video losses in Q2 to just 4,000 (compared to a loss of 69,000 in the prior year — its best second quarter in more than a decade), while Charter Communications lost 152,000 video customers in the period, better than the 170,000 it shed in Q2 2015. Cablevision, now part of Altice USA, lost just 2,000 subscribers for its best Q2 in four years.

“Can cable’s relative position get any better?” Morgan Stanley media analyst Ben Swinburne asked in a note to clients. He pointed to Charter’s improvements, adding that more are expected.

“[W]e think Charter’s best market share days remain ahead of it,” Swinburne wrote.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said he believes cable’s momentum will continue at the expense of the telcos. “In the end, cable simply has a better mousetrap, which will become even more apparent in ’17 when cable inexpensively upgrades its network for DOCSIS 3.1 and its 1 [Gigabit-per-second]-plus potential download speeds,” he wrote in a note to clients.

Discovery Networks International has named Paul Welling senior vice president of international brand and franchise development. In this new position he will be responsible for developing and executing strategies to launch, position and grow brands across DNI’s global portfolio.

Welling will report directly to DNI’s president of content Marjorie Kaplan and will be based in Discovery’s London office.  Most recently, Welling was senior vice president and head of channels for the CEEMEA (Central & Eastern Europe, Middle East and Africa) region.  He was responsible for two successful pan-CEEMEA initiatives – the Discovery Channel “Don’t’ Stop Wondering” brand positioning and tagline, and the Emoji-centric TLC brand campaign.

“Paul has proven to be a terrific leader at this company – building strong brands across the CEEMEA region and connecting our content with the consumer,” Kaplan said in a statement. “With his new role, I am excited for Paul to lend his talents to the entire organization and really dig deep on curating content, brands and talent that resonate with viewers while galvanizing our superfans across all screens and around the globe.”

Welling has spent nearly two decades with Discovery Communications – heading up Discovery Networks Emerging Markets channels, leading Discovery Networks UK’s lifestyle and entertainment group and programming the entire portfolio of channels in the UK business.  He also led the Discovery Networks UK on-air group. 

“Great content will inform some superb marketing and vice versa,” Welling said in a statement. “We’re vying for the attention of consumers in so many ways that content can’t stand on its own and be expected to succeed.  I think our business partners will continue to benefit from the fully immersive, panoramic view of utilizing content and igniting all the great creativity around that content.”

Liberty Global has renewed its distribution deal with Discovery Communications, a long-term deal that ensures carriage of the programmer's full portfolio of channels across 12 countries in Europe.

“Discovery is the leader in premium and provocative real-world entertainment through our loved brands that engage and entertain passionate communities across the globe. From world-class sporting events like the Olympic Games, Grand Slam Tennis, and important local sports to globally popular shows like Gold Rush, Cake Boss, and Shark Week, this new deal strengthens our great partnership with Liberty Global and provides their customers with more premium content from Discovery’s networks and brands, across more screens than ever before,”said Discovery Networks International CEO JB Perrette in a prepared statement.

The deal also includes digital rights, allowing Liberty Global customers in Austria, Belgium, Czech Republic, Germany, Hungary, Ireland, Poland, Romania, Netherlands, Slovakia, Switzerland and the United Kingdom, access to programming in and out of the home.

“This long-term renewal provides Liberty Global with guaranteed access to Discovery’s broad stable of world-famous brands," said Liberty Global managing director, programming Bruce Mann in a statement. "With greatly expanded distribution rights, we are well positioned to meet and exceed our customers’ expectations and evolving viewing habits. Meanwhile, the combination of our ever more innovative TV platforms with Discovery’s significant investment in content – including the Olympic Games – provide a framework for further creative opportunities that will drive even more value from the deal.”            

On Friday, June 17, during the Discovery Comunications“Discover Your Impact Day,” Adria Alpert Rommvisited four sites where employees in the Maryland area were volunteering their time to community organizations.

She started at the National Zooin Washington, D.C., where volunteers were cleaning habitats, and next went to a veterans’ home, where employees prepared a barbeque and cleaned World War IIera jets and tanks. “Then I went to a diaper bank,” she said, where Discovery folks helped package donated diapers that would later be delivered to needy families, and she visited an inner-city high school where employees helped to weed and prepare for planting a community garden.

MCN Slideshow: Photos From Discovery Communications's "Discover Your Impact Day"

“It’s always a great day for employees around the world,” Romm, the company’s chief human resources and global diversity officer, said of the seventh annual event, which draws about 4,200 employees into volunteer action.

Many end up doing a lot more with the organizations they get to know from their initial visit, and Discovery gives out grants of $3,000 to sites where an employee completes 30 hours of volunteer service. At the D.C.-area diaper bank, it was announced that a $9,000 grant had been awarded, which means three employees committed those 30 hours each. “It’s more than a day,” Romm observed.

Read more about Discovery's corporate social responsibility program and other companies' #CableInTheCommunity public service efforts.

Discovery Communications said it has formed a long-term partnership with Austrian public broadcaster ORF for multi-screen carriage of the 2018 Winter Olympics in PyeongChang, South Korea and the 2020 Winter Games in Tokyo.  

Under the agreement, ORF will exclusively sublicense free-to-air audio visual and radio rights for its channels, for the 2018 Olympic Winter Games and 2020 Olympic Games. The sublicense package will include selected digital rights to the content ORF broadcasts on its linear TV channels.

Eurosport will hold pay rights to air all Olympic Games action on its German language channels available in Austria, as well as across all digital, OTT and mobile platforms.

 Discovery secured European rights to the Olympic Games for its Eurosport cable network last year. The programmer has secured seven sublicensing deals with broadcasters in Croatia (HRT), the Czech Republic (Ceska Televize), Finland (YLE), Ireland, (RTE), the U.K. (BBC), and The Netherlands (NOS) over the past several months to ensure broader coverage.

 “We have secured a groundbreaking Olympic partnership for viewers in Austria, ensuring that the Olympic Games remains accessible to the broadest possible audience and delivered to the highest standard, said Discovery Networks Central & Eastern Europe, Middle East and Africa president Kasia Kieli in a statement. “The agreement is a perfectly example of how Discovery will deliver more coverage of the Olympic Games, across more screens than ever before.”

The Olympic Games are heavily watched in Austria -- The London 2012 Olympic Games were watched by more than 5.6 million people (78% of the population) in Austria, while 5.9 million people (81% of the population) watched the 2014 Winter Games in Sochi, Russia on television via ORF.

 “With the acquisition of the rights for the 2018 and 2020 Olympic Games from the Olympic rights holder Discovery, we are able to offer our Austrian sports fans the most important winter and summer sports events in full extent and in the usual top quality,” said ORF director general Dr. Alexander Wrabetz in a statement. “It is that proven and internationally well recognized quality of ORF sports reporting, that made a contractual partnership with Discovery possible. Knowing that their product is in the right hands, my thanks go to Discovery and also to the negotiating team of the ORF under the direction of Hans Peter Trost and Martin Szenercsi.” 

It hasn’t been a good week to be Philippe Dauman.

The Viacom executive chairman and CEO is a regular target of irate shareholders who blame him for the content company’s precipitous fall over the past few years. Now, he’s even taking shots from his onetime friend and mentor, and Viacom’s largest shareholder, Sumner Redstone.

Redstone’s moves to oust Dauman and longtime Viacom board member George Abrams from the trust that will manage Redstone’s controlling stake in Viacom after his death or incapacitation has fueled mounting speculation that Dauman is being forced out.

While Dauman works hard to repair his reputation, signs point to a showdown with Redstone’s daughter and Viacom nonexecutive vice chair of the board Shari Redstone, who has been gaining influence in the trust. Lawsuits have traded back and forth: Dauman to block Redstone’s moves, Shari Redstone to have her father’s wishes upheld.

As the palace intrigue roils on, it might be time to take a closer look at Dauman’s performance by comparing his often-criticized pay package with the rise or fall of Viacom’s market capitalization over the past five years.

Related:Viacom Board Prepared to Fight

There has been much talk of Viacom’s mismanagement and how executives were more interested in cashing massive compensation checks while ignoring trends in the TV business. That is all a matter of perception, though: Few current pay TV executives could have anticipated the rise of OTT players and skinny bundles five years ago, and most didn’t.

At the same time, whether or not its youth-oriented channels make it a canary in the coal mine for the rest of the TV business, one unmistakable fact is that under Dauman and his top lieutenant, chief operating officer Tom Dooley, Viacom has faltered in the past few years.

A quick look at the stock price is evidence of that. Viacom shares are down about 25% since May 2011, shedding about $19 billion in market cap. At the same time, Dauman has received nearly $200 million in total compensation over that span and Dooley received $154 million in salary, stock-and-option awards and incentive compensation.

Since 2014, when Viacom stock was trading in the $80 range, the falloff is more dramatic. Since March 10, 2014, when Viacom shares closed at $88.90 each, the stock is down more than 50% to $39.95 on May 24, subtracting about $20 billion in market cap. Dauman and Dooley reaped a combined $145.8 million in total compensation over that period.

Dauman and Dooley aren’t the only media executives who have been criticized over their pay packages — and they aren’t even the highest paid. That distinction belongs to Discovery Communications CEO David Zaslav, who has received $324.1 million in total compensation in the past five years, skewed mostly because of one-time awards in 2014 that inflated his total pay to $156 million that year. Viacom’s sister company CBS was second, with chairman and CEO Les Moonves receiving $313 million in total compensation in the past five years.

But while Disney chairman and CEO Robert Iger received $199 million in total compensation between 2011 and 2015, for instance, Disney’s market cap soared 144.6% from $41.1 billion to $100.5 billion. CBS is up 105.6% to $54.2 billion from $26.4 billion in 2011; 21st Century Fox is up 69.6% to $28.9 billion from $17.1 billion in 2011; and Discovery is up 23% to $26.8 billion from $21.8 billion in 2011. Viacom’s market cap has fallen from about $35 billion in 2011 to $16.7 billion as of May 25.

Whatever the outcome, some analysts believe Dauman’s days are numbered. In a research note last week, Telsey Advisory Group media analyst Tom Eagan charted out several scenarios that ultimately end with Dauman’s ouster.

In a piece titled “Jersey Shore Has Nothing on This,” Eagan noted board changes at Viacom and National Amusements (the vehicle that holds Redstone’s Viacom stock). “We expect that Sumner and Shari Redstone will attempt to make changes in Viacom executive management, chiefly replacing CEO and chairman Phillippe Dauman,” Eagan wrote. “Although Mr. Dauman has the support of the Viacom board, we expect changes in that board.”

Boston – Comcast plans to start shipping its first box with on-board High Dynamic Range (HDR) capabilities on July 4, according to Tony Werner, Comcast’s EVP and chief technology officer, said here Wednesday during a session with other industry CTOs.

That will ensure that the Xi5 will be available in time for the Rio Olympics, where NBCUniversal will be producing some coverage in the HDR format. Comcast also offer a taste of HDR during the games at some special screenings that will showcase the format. 

Werner said he has more personal interest in HDR, a technology that enables brighter and more colorful pixels, than 4K, a format that packs about four times the number of pixels than today’s HDTV images.

He said upconverted 1080p looks good, but HDR makes it “noticeably better.”

Here at the show, Comcast showed off the Xi5, its first HDR-capable box that will be wireless and work with the company’s IP-capable X1 platform. Comcast is also developing the Xi6, which will support both HDR and 4K.

Comcast plans to demo HDR in some hosted events it will arrange during the summer games in Rio.

As for 4K, Werner said Comcast won’t “roadblock” access to it, but said there’s need for more content in that format .

The wide-ranging discussion also touched on Comcast’s X1 platform, which is being licensed by Cox Communications and Shaw Communications and uses the Reference Design Kit (RDK), a preintegrated software platform for video and broadband devices being managed by Comcast, Liberty Global and Time Warner Cable (now part of Charter Communications).

Licensing X1 for Cox’s new “Contour” product, “was a key part of our strategy to gain scale, scale around innovation,” Kevin Hart, Cox’s EVP and CTO, said, stressing that there’s a need for more collaboration in the industry.

“The early success is off the charts,” Hart said of Cox’s new X1-based Contour product, which has been deployed to most of the MSO's markets. He added that Cox is looking to update its capital models next year in order to keep up with demand this year and into 2017.

“Once we got this locked and loaded, these guy went,” Werner said.

 The panel also discussed the evolving world of advertising and the shift to more targeted and interactive ads.

Comcast, Werner said, expanded on Comcast’s strategy to integrate interactive ads with the X1 guide environment.

Though advertisers weren’t interested in the early phases of X1 when few customers were on the service, that’s no longer true as Comcast aims to get 50% of its video base on it by the end of the year.  “They are doing the limbo under our door to get ad spots on there,” Werner said, noting earlier that he has “warmed up” to the idea of offering interactive ads on the X1 guide.  

Comcast has supported interactive ads on legacy boxes using EBIF (Enhanced TV Binary Interchange Format) (EBIF), but plans to bring it back in a “big way” to X1 using more advanced technology.

Roku, meanwhile, is also pushing hard into this arena, and recently struck a deal with Viacom to help the programmer make its ads more relevant, said Steve Shannon, GM of content and services at Roku.

Darcy Antonellis, CEO of Vubiquity, noted that targeted advertising technologies continue to improve, but are still in the “nascent stages” when it comes to refinement, noting that her getting an for Deadpool is a “tell-tale sign” of that because she’s not in the demographic for that particular movie.

The talk also touched on the potential for virtual reality and 360 video.

Discovery Communications, which launched a VR unit last year, is “still searching for that consistent user experience,” company CTO John Honeycutt said.

And though mobile video is grabbing lots of attention and headlines, there’s a “revenge of the TV” occurring as more of those big screens get connected to the Internet, Roku’s Shannon said. “It is roaring back to be the predominant streaming platform.”

Werner said Comcast is finding tablets and other second screens to be accretive, and not a displacement of TV viewing. “They can fill gaps with it,” he said, noting that Comcast, for example,  has seen many viewers pause a show on the set-top at 10:15 p.m.  and then soon resume it on a tablet. 

Discovery Communications said it acquired a majority stake in Turmeric Vision Private Limited, which owns pay TV network FoodFood in India.

The deal makes Discovery partners with India’s top culinary celebrity, Sanjeev Kapoor.

Financial terms of the deal were not disclosed.

The deal expands Discovery’s presence in India. Discovery said it plans to support FoodFood’s 100% focus on local programming and will begin selling FoodFood’s advertising effective immediately.

Read more at broadcastingcable.com.

Discovery Communications said in a Securities and Exchange Commission filing late Wednesday that it has committed between $40 million and $60 million to an employee buyout aimed at streamlining the programmer and helping it invest in growth initiatives including digital services and content creation.

According to the 8-K filing, typically made by public companies to announce a material event, Discovery identified eligible employees on April 28 and began offering the buyouts on May 4. 

The company did not disclose how many employees are eligible for the buyout and how many it believes will take the offers.

Discovery said it also is looking for other ways to cut costs and is investigating “additional actions to reduce its non-personnel costs and is continuing to evaluate its overall expense base,” according to the filing.

In a memo from Discovery CEO David Zaslav that was included in the public filing, the moves are part of the company's ongoing strategic planning.

"We are rolling out a number of cost-reduction efforts around the globe, including budget reallocations, technical and process improvements and organizational restructuring, all designed to make us more competitive and ensure that we can continue investing in new growth initiatives," Zaslav said in the memo. "The specifics of the cost reductions will vary across business units and geographies, and you will hear from your leadership team in the days and weeks ahead.  There is no doubt that change can be challenging and difficult. This process, while necessary, is a tough one. In making these hard decisions, we are positioning Discovery for many more years of success and growth as a leader in global entertainment."

Zaslav continued that the ultimate goal is to maximize the company’s linear TV business while pursuing other opportunities like launching new digital and mobile offerings.

"The cost savings will allow us to continue growing our business while investing in four key areas: more loved content; sports and other valuable IP; digital services and OTT products; and international growth markets,” Zaslav said in the memo.

The announcement comes the day before Discovery is scheduled to release its first quarter earnings results. In the memo Zaslav said the company is strong – ad sales and international affiliate revenue are healthy.

“All the success we have today has been driven by embracing change and disrupting ourselves in the past,” he said in the memo. “I am confident that these cost-reduction measures will both amplify our current strengths and pave a clear path for continued growth and success… Together, we can embrace the change, lead the disruption and continue transforming our company for the future.”

OTOY said HBO and Discovery Communications have taken equity stakes in the company as the programmers look to push ahead with plans to create and publish original holographic content that can be distributed across TV, Web, mobile and augmented reality and virtual reality platforms.  

They did not disclose the amount of the investments.

OTOY’s advisory board includes Dr. Eric Schmidt (executive chairman of Google's new parent company, Alphabet), Samuel J. Palmisano (former chairman, CEO and president of IBM), Ariel Emanuel (co-CEO, WME | IMG) and noted economist George Gilder. Major shareholders include Autodesk and Yuri Milner.

Los Angeles-based OTOY, whose advisory board includes Eric Schmidt, executive chairman of new Google parent company Alphabet, is currently working with Jon Stewart on the development of upcoming content for HBO built using its platform. In November, Stewart announced a four-year exclusive deal with HBO, with the initial aim to create short-form digital content for platforms such as HBO Now and HBO Go.

“OTOY is unbelievable! It’s a limitless mind blowing creative platform,” Stewart said, in a statement. “My dream is to someday understand how they did it!!!”

“HBO prides itself on being at the forefront of entertainment, both in the exceptional content we produce, and in the ways we bring that content to consumers,” said Michael Lombardo, president, HBO Programming, in a statement. “OTOY has a roadmap for the future of entertainment and technology. Their creativity and drive perfectly aligns with HBO’s. We couldn’t be more excited to invest in OTOY and to work together on original content and amazing experiences for years to come.”

“OTOY technology is a massive breakthrough and we look forward to seeing it take VR and AR experiences, including Discovery VR, to a whole new level,” added Paul Guyardo, chief commercial officer at Discovery Communications.

“The future of media and entertainment is not going to be constrained by a screen, nor consumed through monolithic apps or platforms,” said Jules Urbach, founder and CEO, OTOY. “OTOY’s mission is to make holographic and immersive content a mass market proposition for consumers, artists and publishers alike. A key part of this endeavor is unifying production and delivery of content across all possible endpoints, from HTML5, to TV and social, to wearables. With HBO and Discovery as strategic investors and content publishing partners, we couldn’t be more excited to work together to map out the future of entertainment.”