The first-quarter earnings conga line continues to march along at a merry clip, as Discovery Communications on Friday was the latest media conglomerate to trumpet significant gains in ad sales revenue.
Home to the basic-cable networks Discovery Channel, TLC and Animal Planet, Discovery boosted its Q1 ad sales haul by 9 percent versus the year-ago period, taking in $266 million in sponsor dollars. Network brass now expect 2010 ad sales revenue to grow in the mid- to high-single digits (on a percentile basis).
“The market is quite strong right now. Everyone is back,” Discovery CEO David Zaslav told investors during the company’s Friday morning earnings call. Zaslav added that he anticipates a “very nice upfront,” noting that automotive dollars have shown marked improvement and scatter pricing remains strong.
Along with auto, financial services and retail have been strong categories for Discovery in recent weeks.
Affiliate fees were up 4 percent, to $259 million. All told, the networks saw revenue rise 5 percent to $546 million, beating Oppenheimer & Co. estimates by 2 percent.
The improving financial picture coincides with steady ratings performance at the core networks. In Q1, Discovery slipped 1 percent in prime among viewers 18-49, averaging an 8th-place 650,000 members of the demo. Total viewers slipped 2 percent to 1.24 million. Meanwhile, TLC closed out the quarter up 6 percent in the demo, while improving its overall prime-time deliveries by 9 percent, to 1.1 million viewers. Animal Planet continued to boost its numbers, upping 18-49 deliveries by 13 percent, while adults 25-54 improved 9 percent.
Discovery’s emerging networks also posted a strong quarter, as Investigation Discovery landed in the top 40 with an average nightly draw of 364,000 viewers, up 56 percent from Q1 ‘09. Science Channel was up 14 percent in prime, while Military Channel lifted its deliveries by 40 percent.
Much of the Q&A portion of the call centered on the launch of OWN: The Oprah Winfrey Network, the joint venture set to debut on Jan. 1, 2011. Last week, the startup secured a $100 million deal with Procter & Gamble, guaranteeing the CPG giant a front-row seat from which to watch Winfrey’s next act. Zaslav characterized the agreement as “a great first deal,” before adding that successive pacts with other clients would be announced soon.
The P&G commitment includes traditional advertising inventory as well as integration opportunities. Per Kantar Media, P&G’s total advertising budget for 2009 was $2.71 billion, down 16 percent from $3.22 billion the previous year.
Through March 31, Discovery has invested $49 million in OWN. All told, the company has agreed to loan as much as $100 million to the venture through Sept. 30, 2011. OWN will replace the 12-year-old Discovery Health, which as of the end of last year reached some 74 million U.S. subs.