Global media major Discovery Communications’ future growth and operating leverage is increasingly anchored to its international business and investment in sports.
At a recent press briefing in Paris, CEO David Zaslav said the company plans to increase international’s contribution to the top line to 65% over the next three years, from 50% today.
Europe and Eurosport are integral to those goals, while the company has also started to make more bets in Asia.
Eurosport’s CEO, Peter Hutton, is keen to invest in key rights and markets to strengthen the channel in Asia-Pacific, as illustrated by a recent US$8 million bet on three years’ worth of Champions League and UEFA football in Singapore.
The company is also poised to announce later this month that it has acquired Setanta’s sports business in Asia (ex-Australia), a US$2 million revenue franchise, according to industry analysts Media Partners Asia (MPA).
“We have to be really honest and say that our Asian channel is not where we want it to be, so we need to make some country-by-country investments,” Hutton said. “Country by country is difficult logistically, in that you then have to take an infrastructure cost to launch a separate beam for a territory,” he added.
Hutton also highlighted BeIn Sports’ increased interest in Asia. The rival network is expected to announce a CEO for Asia-Pacific later this year, as it looks to exit its agreement with MP Silva and take on full ownership of its channels business.
“That means you know that they will invest heavily and do things properly,” Hutton said.
"As a result, you have to think country-by-country and more tactically as well. There are plenty of bits of Asia where Eurosport is not even there yet – the Indian sub-continent, Korea. You’ve got to try and find a way of getting involved in other markets.”
While Eurosport has ambitions for Barclays Premier League (BPL) coverage in Asia, it may not be a high priority, given the prohibitively high pricing for rights in the region.
“In most markets in Asia, the Premier League hits above its actual value because it’s such a status symbol for a platform to say they have the rights,” Hutton added. “That’s a level of gamble that in most markets you’d probably say we’ll leave that as a platform decision.”
Zaslav, meanwhile, trumpeted Discovery’s B2C ambitions.
“We own all of our content, which is a huge advantage, and now we’re transitioning into a direct-to-consumer company,” he said.
“Europe for us is the next emerging market.”
Driven by net subscriber and Arpu momentum, fast-growing Indian DTH pay-TV platform Videocon d2h reported solid financials for FYE March 2015.
Revenues from operations rose 32% Y/Y to Rs23.4 billion (US$373 million), while Ebitda climbed 55.3% Y/Y to Rs6.1 billion (US$97 million).
The company’s net subscribers grew 20.6% to ~10.2 million over the period, while monthly Arpu increased 8% to Rs196 (US$3.1). The company aims to be cash and net income-positive by the end of this year.
“Subscriber growth remains healthy and will improve further as the subsequent phases of digitalization in India are rolled out,” says Mihir Shah, India VP at Media Partners Asia.
The company’s Arpu growth, meanwhile, can be largely attributed to the repricing of its base pack, Shah points out.
“There is room to increase this further by upselling subs to high-value packs, pushing HD channels and driving uptake for a new suite of SVOD services,” he says.
Videocon d2h is also looking at more settled margins and improved operating leverage over the next three to four years, as recently concluded content agreements help stabilize content costs.
In April 2015, Videocon d2h successfully listed on Nasdaq, making it one of the few Indian companies listed on US bourses.
The DTH operator issued US$325 million worth of American depository receipts (ADRs) with a US$1.15 billion market cap.
The company also aims to list on India’s Bombay Stock Exchange and National Stock Exchange over the next few months.
With Allen Lew at the helm, Australian telco Singtel Optus is starting to become a different company – aggressive, dynamic and potentially game changing.
The telco is going directly after market leader Telstra as it looks to invest A$1.7 billion (US$1.3 billion) to improve its mobile network and expand its fixed network. Both will provide a foundation for a stronger integrated offering.
Mobile is key, accounting for more than 50% of Optus’ sales and 60% of its Ebitda.
The focus is on stronger innovation and customer care as well as aggressive integration with digital video providers such as Netflix and Fetch TV.
Optus has gained market share in broadband on the back of aggressive bundling, pricing and integration with video entertainment.
The company has also found success by introducing BYOD (bring your own device) plans, while also activating data sharing among devices and family members.
Optus’ mobile service revenue grew 3% in FY 2015, boosted by lifts in Arpu.
In fixed broadband meanwhile, Optus has rolled out unlimited data plans at A$90 (US$70)/month, A$20 cheaper than Telstra.
Meanwhile, management at Optus’ parent, Singtel have confirmed that its media and digital services division, Digital Life, will now focus on three areas: Amobee (ad technology), Spark (data analytics) and Hooq (OTT video).
Losses at Digital Life will likely escalate over the next three to four years due to funding needs at Hooq, which has a high level of content costs as it scales its offering across Southeast Asia and India.
Building on successful roadshows in Japan and the US last month, COO of Thai broadcaster RS Ladprao-Pornpan Techarungchaikul plans to woo foreign institutional investors in Q3 this year with ratings traction of its new DTT channel, Channel 8, freesat offering Channel 2 and a leading radio business.
Channel 8 ranks fourth nationwide, largely due to its wide viewer demo, with distribution over DTT as well as freesat platforms.
Plans are underway to further improve Channel 8’s ratings by introducing new content.
Drama makes up about 15% of RS’ programming, including 20 new productions lined up for 2015. The remaining content comprises variety shows (55%), news (25%) and sports (5%).
Channel 2 is doing well as a freesat channel in its own right, rating higher than many DTT services. RS plans to overhaul the channel’s programming to further boost ratings and make it the country’s top freesat channel.
RS’ profitable music business also remains attractive to investors.
In Q2 2015, RS partnered with messaging app Line to introduce a streaming music app in Thailand, which is expected to reach 1 million downloads by end-2015.
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