Discovery CEO says COVID-19 reinforces need for no-sports TV bundle

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Discovery cited Nielsen data that suggested the company had the most-watched pay TV portfolio in the U.S. among P2+ audiences in the first quarter of 2020 (Discovery Inc.)

Discovery CEO David Zaslav said that with live sports on hold during the COVID-19 crisis, pressure is mounting for TV providers to offer a bundle of content without sports.

During today’s earnings call, he said a bundle with no sports and a smaller price would likely help turnaround the persistent video subscriber losses for cable, telecom and satellite providers. He said services like Philo, which sells a linear streaming service focused on entertainment channels, are seeing “big uptake” from consumers who don’t want to pay for sports.

“I’m hoping you follow the behavior, you follow the need in the marketplace and you follow what’s equitable and fair. Ultimately, it might put pressure on these big sports players that are bundling and forcing and leveraging and jamming, to say, even in this moment, ‘Alright. Enough. I’ll give you more flexibility to give America what they want,’” Zaslav said.

RELATED: Discovery wants to go OTT without alienating pay TV distributors

Discovery Inc. offers live sports in Europe through Eurosport and its agreement with the Olympics, but not as much in the U.S. While professional sports are postponed due to the pandemic, Discovery said its U.S. networks have been thriving. The company cited Nielsen data that suggested Discovery was the most-watched pay TV portfolio in the U.S. among P2+ audiences in the first quarter of 2020 and in primetime, Discovery was the most-watched pay TV portfolio among key demos.

Discovery’s first-quarter revenues were largely flat as advertising revenue for its U.S. networks business held steady year over year thanks to increases in pricing, the continued monetization of content offerings on its new platforms and higher inventory, which helped offset lower overall ratings and declining subscribers in the pay TV ecosystem.

Looking ahead, Discovery is still at work on building a new streaming service that aggregates content across all its brands. Zaslav said that work on the new platform has slowed down a little bit since the company can’t hire new employees currently, but he said the company is still on track with building its new service.

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