Discovery invests $100 million in digital media venture
The Discovery Communications logo is seen at their office in Manhattan, New York, U.S., August 1, 2016. REUTERS/Andrew Kelly
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By Jessica Toonkel
(Reuters) - Discovery Communications (NASDAQ: DISCA), which owns networks like the Discovery Channel and Animal Planet, on Thursday became the latest TV company to invest in digital content in an effort to reach mobile viewers.
Discovery invested $100 million in a new holding company, Group Nine Media, that combines millennial-focused online publishers Thrillist, a food, drink and travel brand; video news creator NowThis and animal video site The Dodo with its own digital assets, the company said in a statement.
Through the deal, Discovery will have the option in two years time to acquire a controlling stake in Group Nine, which will be run by Thrillist CEO Ben Lerer, according to David Zaslav, CEO of Discovery.
Discovery, like many traditional media companies, is working to get more of its content online as viewers increasingly go to their phones or other mobile devices to view programs. Discovery's move comes months after Comcast Corp's (NASDAQ: CMCSA) NBCUniversal invested $200 million in online publisher BuzzFeed and Vox media.
"We think this is a great play in attacking the 7 billion mobile devices with streams across the world," Zaslav told Reuters in an interview Thursday. "This company is great at creating short form content that people want to consume and send to their friends...it's going to be a few more innings before we figure out how to monetize it."
For Discovery, the deal marks a push to become a bigger player on platforms like Facebook Inc (NASDAQ: FB), where NowThis is the number one video news publisher, as well as platforms like Snapchat, Zaslav said.
Additionally, the Silver Spring, Maryland-based company hopes to learn from the data and analytics that the new digital venture will offer up, and share that with advertisers, he said.
Given its focus on science, Zaslav sees a lot of opportunity to expand its reach with more short form video content digitally, he said.
"This is really a global play for us," he said, noting that Discovery's Science Channel is available in 200 countries. "Culturally right now smart is the new sexy."
(Reporting by Jessica Toonkel; Editing by Andrew Hay)
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