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Discovery Communications (DISCA)
Q4 2011 Earnings Call
February 16, 2012 8:30 am ET
Craig Felenstein -
David Zaslav - Chief Executive Officer, President, Director and Member of Executive Committee
Bradley E. Singer - Chief Financial Officer, Senior Executive Vice President and Treasurer
Michael Nathanson - Nomura Securities Co. Ltd., Research Division
Spencer Wang - Crédit Suisse AG, Research Division
Benjamin Swinburne - Morgan Stanley, Research Division
Douglas D. Mitchelson - Deutsche Bank AG, Research Division
David Bank - RBC Capital Markets, LLC, Research Division
Richard Greenfield - BTIG, LLC, Research Division
Alexia S. Quadrani - JP Morgan Chase & Co, Research Division
Vasily Karasyov - Susquehanna Financial Group, LLLP, Research Division
Anthony J. DiClemente - Barclays Capital, Research Division
Tuna N. Amobi - S&P Equity Research
David W. Miller - Caris & Company, Inc., Research Division
Previous Statements by DISCA
» Discovery Communications' CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Discovery Communications' CEO Discusses Q2 2011 Results - Earnings Call Transcript
» Discovery Communications' CEO Discusses Q1 2011 Results - Earnings Call Transcript
Thank you, Anne. Good afternoon, everyone, and welcome to Discovery Communications Fourth Quarter 2011 Earnings Call. Joining me today is David Zaslav, our President and Chief Executive Officer; and Brad Singer, our Chief Financial Officer.
Hopefully, you have all received our earnings release, but if not, feel free to access it on our website at www.discoverycommunications.com. On today's call, we will begin with some opening comments from David and Brad, after which we will open the call up for your questions. We urge you to please keep to 1 or 2 questions, so we can accommodate as many folks as possible.
Before we start, I'd like to remind you that comments today regarding the company's future business plans, prospects and financial performance are forward-looking statements that we make pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are made based on management's current knowledge and assumptions about future events, and they involve risks and uncertainties that could cause actual results to differ materially from our expectations.
In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our Form 10-K for the year ended December 31, 2010, and our subsequent filings with the U.S. Securities and Exchange Commission.
And with that, I'll turn it over to David.
Thanks, Craig. Good morning, everyone, and thank you for joining us. 2011 was another fantastic year for Discovery. The company delivered double-digit revenue and OIBDA growth marking our fourth consecutive year of double-digit earnings growth since becoming a public company in 2008.
With the backdrop of global uncertainty, rapid technological advances and increasing competition across platforms, Discovery's ability to grow consistently over that time period underscores the sturdiness of our business model, the opportunity present across our global distribution platform and the universal appeal and long shelf life of our nonfiction content.
Discovery's 2011 results demonstrate our continued focus on creating high-quality programming and then leveraging that content around the globe, as well as across a growing number of digital and consumer platforms. We did benefit from the continued strength of the ad market, both domestically and internationally. But more importantly, the double-digit growth and the sustained operating momentum speaks to our ability to take advantage of the opportunities provided by our unique infrastructure, as well as from an evolving media landscape.
Before we take your questions, let me take a few minutes to highlight some of the initiatives that helped drive our success during this past year and discuss some of the opportunities we expect to leverage in order to sustain this momentum in 2012 and beyond.
Around the world, demand for high-quality content has never been higher. Consumers are watching more television than ever before across traditional and developing distribution channels. Discovery's sustained strategy of building brands and capturing market share by investing on the screen to produce the best creative nonfiction content with great storytelling and compelling characters continues to pay dividends. You've heard me say in the past that while we are a great platform company, with 14 networks domestically and between 2 and 13 channels in over 210 countries globally, we are on a journey to become a great content company as well.
In 2011, we took significant strides toward this goal by strengthening existing networks, extending popular brands around the world, investing in new brands to take advantage of our unique reach and tapping into new opportunities to further monetize our content library.
Discovery Channel is the most widely distributed network in the world and the largest contributor of our overall revenues and cash flow. Approximately 70% of what we create on Discovery in the U.S. gets used in some capacity around the globe, and with that sort of global brand strength, keeping Discovery's domestic content pipeline strong and fresh has been a top priority.
Over the past few years, Discovery's viewership was led primarily by tried and true hits, Dirty Jobs, MythBusters, Man vs. Wild and Deadliest Catch. And while the sustained success of these shows speaks to the durability of our content, we have been extremely focused on developing new tentpoles to engage audiences and drive viewership growth.
In 2011, we added to our stable of big hits with several returning series delivering significant ratings gains versus a year ago, including Flying Wild Alaska, Sons of Guns and most notably, Gold Rush. Gold Rush grew its viewership 35% versus its first season and is the #1 show in television on Friday nights, beating all other cable networks and broadcast networks. And success begets success as we leverage the larger audiences on these returning series to drive several new series, including Moonshiners. The net result was fourth quarter viewership at Discovery was up 17%, and that momentum has continued into 2012 with viewership in January up versus a year ago.