Discovery Shares Rise as Cable Giant Finds a Spot on YouTube TV

(Bloomberg) -- Discovery Inc. shares rose the most in seven months after the cable programmer announced a deal to have its channels distributed on YouTube’s live TV service.

Nine Discovery channels will be on the service, including HGTV, TLC, Animal Planet and Food Network, the companies said Wednesday. YouTube TV is also raising its price to $50 a month, from $40.

The multiyear deal will help Discovery stem the loss of traditional pay-TV subscribers and provide a new source of revenue from the world’s largest video website. Discovery shares rose as much as 7.5 percent, their biggest jump since September.

YouTube TV is one of several live, online TV services that were initially supposed to offer fewer channels at lower prices than traditional cable services, which have been losing customers to lower-priced services like Netflix Inc. But many have raised their prices as they add channels and try to turn a profit or at least not lose too much money.

YouTube TV had about 1 million subscribers as of last month. Last year, Discovery reached a similar deal with Hulu’s live service, which has about 2 million subscribers.

The deal is a “clear positive” for Discovery shares, Evercore ISI analyst Vijay Jayant said in a note. “Discovery’s place in the pay-TV bundle has been validated again,” he said.

Pay-TV providers are still tinkering with their channel lineups to figure out what works with online viewers. AT&T said last month its DirecTV Now service would no longer offer Discovery channels as part of a series of programming and price changes.

To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Rob Golum

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