- The shift away from traditional pay TV to an OTT model has left investors wary of smaller players and how they will adapt to the new environment.
- Discovery has popular content on its flagship channels and its low cost of content (unscripted business model) should allow for steady fcf through the transition to OTT streaming.
- Discovery will need to sign up around 15M subs to Discovery+ to offset traditional tv declines.
- Discovery trades at an EV/EBITDA (TTM) multiple of 7x which is significantly below the industry median of 10x.
For further details see:
Discovery: Low Cost Model Makes Current Bet Enticing