DISCB - Discovery, Inc.

Streaming Service Quietly Gathers More Subscribers Than HBO Now

(Bloomberg) -- Any list of the most-popular online TV services begins with Netflix, Amazon and Hulu. But after those comes an unlikely success story of the streaming revolution: CuriosityStream, a service for kids and adults that’s devoted to subjects like science and nature.CuriosityStream, founded by Discovery Channel creator John Hendricks, has eclipsed 10 million subscribers, the company said Tuesday. That’s more than ESPN+, HBO Now, CBS All Access or the WWE app, and up from just a million last December.Its growth offers a possible blueprint for the many small services pondering their fate now that Walt Disney Co., Apple Inc., Comcast Corp. and AT&T Inc. are spending billions of dollars to compete with Netflix Inc.CuriosityStream has outpaced competitors by embracing a model pioneered by cable TV. Rather than trying to market the service on its own, Hendricks and Chief Executive Officer Clint Stinchcomb have sold it to pay-TV operators who bundle it for their own video and internet customers.“From the beginning, I never wanted to be a niche service,” Hendricks said in an interview. “If you say niche service, people think of a special interest that only appeals to a small segment. We have a universally appealing service.”Hendricks founded CuriosityStream in 2015, shortly after he left Discovery Inc., the media giant that owns TLC, Animal Planet and its namesake TV network. Hendricks started the Discovery Channel in 1985, in the early days of cable TV, and saw an opportunity to build an online business around the same fact-based programming that made Discovery a $21.7 billion company.Stinchcomb, a Discovery veteran, came aboard in June 2017 and became CEO last year.Quantum PhysicsFor CuriosityStream, Hendricks acquired the rights to thousands of episodes of TV about Stephen Hawking, quantum physics and Mars, and commissioned original shows about the history of food and the solar system.But Stinchcomb and Hendricks soon realized their audience would be limited if they tried to take on Netflix and Amazon alone. They saw Netflix making deals with cable operators and concluded being part of a larger bundle could help them, too.“We want to make a service that can take advantage of the full addressable market internationally,” Hendricks said. “The opportunity is limitless.”Customers can now buy CuriosityStream several ways. They can pay $2.99 a month or $19.99 a year for a subscription -- either straight from the company or through third parties such as Amazon.com Inc. and T-Mobile US Inc. Some people get CuriosityStream as part of a corporate membership through their employer.Cable AlliesBut the largest share of customers some through pay-TV services. Altice USA Inc., StarHub Ltd. in Singapore, Mexico’s Totalplay and providers across the Caribbean, India and Africa all pay CuriosityStream a flat fee to include its programming in their packages. Next year, the service will be available in nine Latin American countries through Millicom International Cellular SA.Whether CuriosityStream has settled on the best model for smaller streaming services remains to be seen. The company isn’t profitable yet and remains much smaller than the largest players.In February, CuriosityStream raised $140 million in a private placement to fund its expansion. Its new investors included Blum Capital Ventures and TimesSquare Capital Management.As more services come into the market, they will add programming that competes with CuriosityStream. But the company has already outlived streaming services devoted to niches like classic movies and comedy.“There will be a massive amount of carnage,” Stinchcomb said. “There are at least 250 subscription video services. Some will be shut down for economic reasons, and others because they don’t fit into bigger companies’ broader strategies.”To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob GolumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Everyone Gets Paid in CBS-Viacom Except Shareholders

(Bloomberg Opinion) -- Is it just me, or does the $100 million “severance” being paid to Joe Ianniello, the acting chief executive officer of CBS Corp., stink to high heaven? For starters, you can make a pretty compelling Elizabeth Warren-esque argument that handing a $100 million “severance” to someone who is not, in fact, leaving the company is exactly why income inequality has become such a hot-button issue.But let’s be old school about this. Let’s focus on the shareholders and how this is their money that’s being handed to Ianniello. It is also an unpleasant reminder of how the father-daughter combo of Sumner and Shari Redstone seemingly can’t resist throwing hundreds of millions of dollars at executives who have not done much for their stockholders.The Redstones, of course, control CBS through their privately held film exhibition company, National Amusements Inc. They also control Viacom Inc., which Sumner Redstone bought for $3.4 billion in 1987. (Viacom acquired CBS in 1999.) Until 2016, Sumner Redstone, now 96, was the executive chairman of both companies, though he had largely disappeared from public view two years earlier amid allegations that he was in serious decline. Shari Redstone, 65, is the vice chairman of both companies.In 2003, when CBS was still part of Viacom — and Sumner Redstone was still in charge — Les Moonves became its CEO, a position he retained when CBS was spun off in late 2005. Between 2007 and 2018, when Moonves was fired for sexual improprieties, the CBS board, led by the Redstones, paid him just shy of $700 million, according to figures compiled by Bloomberg. That’s an average of $63.6 million a year.I happen to think that $63 million a year is an absurd amount to pay a manager to run a company. But even if you accept that entertainment companies pay their executives insane amounts — Discovery Inc. paid its CEO, David Zaslav $129.4 million last year, for crying out loud — it is reasonable to assume that such an outsized paycheck would be justified by outsized performance.Not so. During the Moonves era at CBS, the S&P 500 Index returned an average of 9% a year. CBS returned 8.7% a year. In other words, the Redstones and the CBS board paid hundreds of millions of dollars of its shareholders’ money to a man who could barely keep pace with an index fund. (By comparison, the Walt Disney Co. returned 14.6%, and 21st Century Fox returned 10.5%.)The situation at Viacom is even worse. Remember Philippe Dauman, the former CEO whom Sumner Redstone once called “the wisest man I know”? He ran Viacom for a decade, from 2006 to 2016. According to Equilar, a company that compiles executive compensation figures, his compensation during those 10 years was nearly $500 million — while the stock gained a paltry 2.7% a year on average. You may recall that Dauman wound up in a nasty court fight with the Redstones in 2016, trying to keep his job by contending that Sumner Redstone was no longer mentally competent to make key business decisions. After winning that battle, the Redstones still handed Dauman a parting gift as they pushed him out the door: a $75 million severance package.Which brings us back to Ianniello. Although he has been acting CEO only since Moonves departed late last year, Ianniello has also been the recipient of the Redstones’ largesse: Between 2016 and 2018, as the company’s chief operating officer, his compensation averaged $27 million a year, according to Bloomberg. The stock? It dropped from the low 70s to the mid-40s during those three years. This is what’s known as “pay for pulse.”So why did Shari Redstone feel the need to hand Ianniello an additional $100 million? The reasons are twofold. First, Redstone is recombining Viacom and CBS. She doesn’t want Ianniello to leave — at least not right away — but she also isn’t going to make him the top dog. Second, for legal reasons, she can’t ramrod this deal through by herself, even though she is the controlling shareholder. She needs the CBS board and senior management to support the bid. “You need Joe to get the merger done,” Robin Ferracone, the CEO of executive compensation consulting firm Farient Advisors, told Bloomberg. “So you need to make him indifferent to whether he’s going to lose his job or not.”Yes, $100 million is certainly likely to buy a whole lot of indifference. Then again, $10 million probably could have achieved the same result. And in any case, if Shari Redstone needs $100 million to, er, persuade one of her executives to support her merger plan, maybe that suggests the merger’s success is not exactly a slam dunk.I have a hard time seeing how combining two underperforming media companies with a hodgepodge of assets will create a worthy competitor to powerhouses such as Disney, which rolled out its Disney+ streaming service on Tuesday morning, and AT&T, which next year will bundle its media assets into another streaming entrant, HBO Max. But Shari Redstone wants to combine Viacom and CBS, and with the help of that $100 million, that’s what’s going to happen. When the companies are merged, which is expected to take place next month, the CEO of the combined entity will be Bob Bakish, who is Viacom’s CEO.Since he took over Viacom, Bakish’s compensation has been surprisingly normal, at least by modern CEO standards. According to company filings, he received about $20 million a year in total pay in 2017 and 2018.But fear not. Once the deal is done, Bakish’s pay is set to jump to more than $30 million. I predict that he’ll be in Moonves/Dauman territory in no time. After all, overpaying executives is the Redstone way.To contact the author of this story: Joe Nocera at jnocera3@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

Discovery quarterly revenue up 3% on higher ad sales

Discovery Q3 Earnings Outlook

Discovery (NASDAQ: DISCA ) releases its next round of earnings this Thursday, November 7. Get the latest predictions in Benzinga's essential guide to the company's Q3 earnings report. Earnings and Revenue ...

Discovery to launch live and on-demand cooking classes via new streaming app

While Netflix Inc, Walt Disney Co and other media companies battle for control of the living room, Discovery Inc is doubling down on the kitchen. Discovery on Wednesday said it was launching a new service in October, Food Network Kitchen, that will offer live and on-demand cooking classes on a Food Network streaming app in the United States. The service, which will feature Food Network chefs such as Bobby Flay and Rachael Ray, will have a free, ad-supported version and an ad-free subscription service costing $7 per month or $60 per year.

Mock Tornado Alert on CBS’s ‘Young Sheldon’ Draws Proposed Fine

(Bloomberg) -- The hit CBS Corp. comedy “Young Sheldon” about a child genius, wasn’t so smart when it came to a mock tornado warning, according to the Federal Communications Commission.Even modified, the tornado warning sounded too much like the Emergency Alert System, which is a violation of agency rules, the agency said. It’s proposing a $272,000 fine for the network’s April 12, 2018, episode, according to a notice on the FCC website. CBS will get a chance to respond before any fine is imposed.The FCC is cracking down on what it says are potentially dangerous uses of the emergency alerts in television shows. The alerts are used to warn the public about emergency events like dangerous weather. Using them in television shows could confuse listeners and is a “serious public safety concern,” the agency said.Last month, the FCC lobbed a $395,000 penalty against ABC over the use of an alert during a comedy sketch on “Jimmy Kimmel Live!,” $68,000 against Discovery Communications Inc. for an Animal Planet episode and $104,000 against AMC Networks Inc. for two episodes of “The Walking Dead.”The “Young Sheldon” episode aired on 227 television stations, including 15 owned and operated by CBS, according to the FCC. The show is a crossover of “The Big Bang Theory,” telling about the childhood of “Big Bang” character Sheldon Cooper.To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.netTo contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Wendy BenjaminsonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

Discovery Reports Q2 Earnings Miss

Discovery Communications (NASDAQ: DISCA ) reported second-quarter earnings of 98 cents per share versus the analyst consensus estimate of $1.05. This is a 27.27% increase over earnings of 77 cents per ...