Discovery Communications said it made a deal to sell long- and short-form programming to Verizon (NYSE: VZ) for its upcoming mobile video service.
"This deal extends our platform reach to Verizon customers beyond our traditional pay-TV customer base and adds yet another source to our distribution revenue stream," Discovery CEO David Zaslav said to investment analysts during his company's second quarter earning call today, according to a Seeking Alpha transcript of the event.
Verizon said last month that it will launch its programming service later in the summer. Variety reported last month that the service will be called "Go90" and will feature full episodes of TV shows, along with music videos and other short-form content. The report, which cited a pre-launch Verizon website that has since been taken down, said the platform will initially be ad-supported and free to consumers. However, during Verizon's recent second quarter conference call with investors, Verizon's Fran Shammo said the service will likely rely on a variety of business models.
Discovery's flagship Discovery Channel was recently ranked as the second most "essential" cable channel, trailing only ESPN but ahead of HBO, in a survey of 1,400 U.S. pay-TV consumers.
For its part, Verizon has already signed content deals with other major cable programmers for its new service, notably Scripps Networks Interactive and ESPN. Verizon also has deals with Vice Media and YouTube programmer AwesomenessTV, among other content companies.
Discovery made the announcement while revealing its second-quarter profits fell about 25 percent to $285 million. Among several factors, the company blamed a tougher ratings and ad sales climate for its U.S. cable networks.
However, Zaslav did say that Discovery's recent carriage renewal deal with Comcast (NASDAQ: CMCSA) includes significant licensing fee increases. Those fees took effect in the third quarter.
For more:
- visit this Discovery Networks investor relations page
- read this Seeking Alpha transcript
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