Discovery said its new streaming service, Discovery+, has amassed over 11 million subscribers since it launched last month, even as cord-cutting and flat advertising revenue hit its business in the fourth quarter.
Chief Executive David Zaslav said Monday that Discovery — which owns HGTV, Food Network and TLC as well as Animal Planet and Oprah Winfrey’s OWN network — is “off to a promising start in 2021” led by the “successful launch of Discovery+.”
Zaslav said that the service, which costs $4.99 a month with ads and $6.99 without ads, is poised to hit 12 million subscribers by the end of February.
In its first report since Discovery+ launched, the company also reported that it posted flat revenue for the fourth quarter that totaled $2.89 billion and diluted earnings of 76 cents a share. Both the earnings and revenue figures topped Wall Street analysts’ forecasts of EPS of 72 cents on sales of $2.83 billion.
Shares of Discovery surged more than 7 percent to $54.45 in early trading Monday.
The company, which is the home of the hit reality show “90 Day Fiancé,” blamed sluggish advertising sales for the stall in total revenues, adding: “Advertising was flat as higher pricing and the continued monetization of content offerings on our next-generation platforms were offset by secular declines in the pay-TV ecosystem and lower ratings.”
Nonetheless, Discovery’s CEO was bullish about the year ahead, despite continuing headwinds related to the pandemic that dinged the company’s financial results last year.
“Our unmatched global scale and ability to serve consumers everywhere with a truly differentiated offering across platforms … position us to achieve sustainable long-term growth and drive long-term shareholder value,” Zaslav said.