Its valuation metrics have gotten steadily cheaper, but whether it ought to be viewed as a buy will depend on how you believe things will shake out in the TV landscape over the next few years. Now whatĪlthough Discovery's share price peaked in 2014 and has been on a downward trajectory ever since, it still churns out impressive amounts of cash flow. In short, it was a rough six months for Discovery, and investors sold off its shares. The coronavirus pandemic dealt Discovery a further blow by canceling major European sporting events and postponing the Olympics, all of which Discovery had been set to broadcast through its Eurosport channel. would have been the first half of 2020, when more than 90% of the population was under stay-at-home or similar orders and eager for entertainment and distraction. Of course, the best time to have had such a massive content library available on demand in the U.S. Can Discovery's content - which largely caters to niche interests - convince a large enough segment of the cable-cutting population to shell out for a streaming subscription? It's even brought on former Google executive Neil Chugani to spearhead the effort.
Unfortunately, cable subscription numbers are falling fast: In the first quarter of 2020, for example, cable provider Comcast lost 388,000 residential cable customers, a big acceleration from Q1 2019, when it only lost 109,000.ĭiscovery has been planning to launch a direct-to-consumer streaming service - a la Disney+ or HBO Go - for quite some time.
That makes it an easy sell as part of a cable package. Discovery, the king of producing "unscripted" TV shows for its cable channel lineup that includes Discovery Channel, Animal Planet, HGTV, and Food Network, is late to the streaming party, and that's had all kinds of consequences in 2020.īecause Discovery's content is unscripted, it's relatively cheap to produce, and easy to produce a lot of.