Asaad Jaber Lu Jiang Gabriela Herrera

Shirin Lamba Keshav Padia

DISCOVERY COMMUNICATIONS

Core Brands New Brands International

Free to Air New Genres New Platforms

TV MEDIA NETWORKS IN THE MEDIA INDUSTRY

Content Producers Content Distributors& Network Providers General Consumer

Market

CONTENT

Cable Service Operators

DTH satellite service

providers

Telecommunication Companies

On-demand & Streaming Platforms

SETTING THE STAGE FOR DISRUPTION

StreamingVideo

Nonlinear Viewing

40%+Nonlinear viewing by 2018 -

Digital Evolution

Exhibit 1. Executives who Anticipate Moderate or Massive Digital Disruption through 2016, by Industry

Source: HBR.org

INDUSTRY IMPACT-2% decline in quarterly

subscriber rate – Bloomberg

Costing the industry $1 Billion in annual revenues - WSJ

PAY-TV BUSINESS MODEL: PROFIT FORTRESS

BUND

LE

DISTRIBUTIONADVERTISING

increase in U.S. online advertising

revenues from 2010 to 2015

7xOnline Channels

VOD

Advertisers Spending

Online

INDUSTRY SCRAMBLING TO DO WHAT?Consolidation

NBC + ComcastWalt Disney + NetflixFox + HuluTime Warner + Turner & HBO

Shifting content onlineOnline channelsTV-everywhere

Content-crazeNetflix 50-50 allocation scheme

DISCOVERY SCRAMBLING TO DO WHAT?Higher pricing models How sustainable is this? How long can they keep raising prices to keep revenues steady?

Discovery GO migrate to Everywhere TV business model

Strategic M&A and Licensing Deals

HOW SHOULD ENTREPRENEURIAL LEADERS RESPOND? Digital Migration

Diversification

Modify accordingly:-Marketing-Operations-Strategic resource allocation

DIGITAL MIGRATIONPayTV Model TV Everywhere Model

Universal Remote

Distribution Disintermediation

Marketing, Operations, Resource Allocation Implications

SCOPE OF IMPACT: TRENDS TO WATCHBehavior shift to mass

customization

AI, IoT, Big Data

AR Technology

NECESSARY MODIFICATIONSOperations:

- Enhance data capture process of supply chain

Marketing:

- B2B marketing targeted to school boards & teachers

Investments in technology:

- AR technology to bring the classroom to life

- Big Data to personalize experiences

MEDIA AND EDUCATION COLLIDELeverages reach to create loyal base

Caters to student needs more effectively

Increases teachers’ productivity

Creates interactive collaboration among

classmates