Cable Network Owners Discovery and Scripps in Merger Talks (Jul 18, 2017)

The Wall Street Journal is reporting that two cable network owners, Discovery Communications and Scripps Networks, are discussing a merger, though there seems no guarantee that a deal will actually get done. The two are among the mid-tier cable network owners in the US, similar sized domestically while Discovery has a significant international business too. Combined, they would be the size of HBO domestically, and the size of Viacom including the international business. Each company has several networks which reach the vast majority of US households by being in the basic cable tier, but Scripps also has several less widely distributed networks, and the biggest thing they have in common is their focus on non-fiction, non-sports content, an important slice of overall content consumption but missing arguably the most popular dramas, comedies, and sports content that most people consume a great deal of. There have been recent talks about sports-free pay TV packages involving Discovery, though not Scripps. The reality is that the cable network business is only going to become more challenging in the coming years as subscriber numbers and ratings continue to drop in the face of cord cutting, cord shaving, and shifting consumption patterns driven by online video services like Netflix. Joining forces would boost scale and negotiating power and therefore help somewhat, but even the combined company would be dwarfed by the industry giants like Time Warner, Disney, and 21st Century Fox in the cable network business alone. I could see some standalone streaming services coming out of all this too, especially for non-sports fans, but I don’t see any of this solving the underlying problems cable network owners face today or in the future.

via WSJ

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