Recently, Discovery Communications, Inc. (DISCA) and Hasbro Inc. (HAS) announced the repositioning of The Hub Network from Oct 13. The Hub Network will now become Discovery Family Channel. The network will widen its programming range in the evening to family-oriented shows, but will continue to prominently feature Hasbro Studios’ children’s content during the daytime.
The repositioning reflects Discovery’s current strategy to maximize its portfolio of channels to satisfy viewers and drive value for distributors and advertisers, apart from working with content partners to create long-term value.
The Hub Network was launched in 2010 and was a 50-50 joint venture between Discovery Communications and the toy maker. The network was primarily aimed at the children's TV market, which has long been dominated by The Walt Disney Company (DIS) and Viacom, Inc.’s (VIA) Nickelodeon.
After the repositioning, Discovery Communications will hold a 60% ownership stake in the new channel, while Hasbro will have a minority stake of 40%. The network will be managed under the Discovery portfolio of networks.
The repositioning will result in some managerial changes. Tom Cosgrove will be appointed as the general manager of Discovery Family Channel and will manage all network operations and programming. He will be working under the executive management of Group President Henry Schleiff and collaborate with the Hasbro Studios team
The Hub Network has historically been one of the most popular networks among children, primarily on the back of Hasbro’s children’s content. Its viewership has grown from nearly 56 million homes in 2010 to approximately 70 million U.S. homes presently. For the past three years, reportedly, the Hub Network has consistently been the most co-viewed children’s cable network among kids aged 2–11 years and adults aged 18–49 years.
However, the children’s TV market has become even more challenging of late. In addition, ever since the Hub’s launch, increased restrictions on commercials that run in children's shows has reduced the ad dollars. Further, most parents nowadays prefer to have their youngsters watch cartoons and other programs streamed on networks that do not air commercial messages. Therefore, we believe Discovery is looking to reposition The Hub Network to bring in more adult viewership.
Hasbro currently carries a Zacks Rank #3 (Hold).
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