Discovery Communications to Close Retail Stores

Discovery Communications to Close Retail Stores

-New Strategy to Extend Reach of Products Through Partnerships and E-Commerce-

SILVER SPRING, Md., May 17 /PRNewswire-FirstCall/ -- Discovery Communications announced today its plan to increase the presence of its consumer products in the retail marketplace through the continued formation of partnerships with large retailers to provide more exposure for Discovery- branded products while eliminating the necessity of operating stand-alone and mall-based stores.

As part of its new commerce plan, Discovery will focus on achieving an increased reach of its products through retail partnerships and the high- growth e-commerce platform. The company plans to expand the presence of its products in the retail marketplace through cost-effective initiatives with large retailers, such as Animal Planet's relationship with Toys "R" Us. In addition to strengthening its successful web-based e-commerce activities, Discovery will also explore new avenues for product sales via television (t- commerce) by capitalizing on the company's unparalleled network reach in the United States and around the world.

The closing of Discovery's 103 mall-based and stand-alone Discovery Channel Stores will occur by the end of third quarter 2007. Approximately 1,000 full-time and part-time employees, or 25% of Discovery Communications' global workforce, will be affected.

"By eliminating our owned and operated brick-and-mortar storefronts, which are cost-intensive and complicated businesses, Discovery can focus its efforts on high-growth e-commerce and licensing operations," said David Zaslav, President and CEO of Discovery Communications. "While retail is historically not the core competency of global media companies, there is strong consumer demand for Discovery's branded product lines. The company's e-commerce operations posted record growth and sales for 2006, and to realize the full value of our quality content, Discovery must also sell through large retailers who have more stores and provide more exposure to a greater number of consumers."

"Discovery Channel's PLANET EARTH DVD has become the fastest and best- selling title in company history," said Mark Hollinger, President of Global Businesses and Operations. "Our retail stores are closing but we are still open for business and expect a robust holiday selling season through our successful e-commerce, licensing and catalog operations."

As part of a new enterprise strategy, the company will focus on the following commerce channels:

E-commerce and T-commerce. DiscoveryStore.com is a leading e-commerce site with more than 12 million unique visitors annually in addition to reaching consumers through partnerships with Amazon.com and eBay. The company's e-commerce operations posted record growth and sales for 2006 and are up 144% YTD over last year. E-commerce, t-commerce and the company's catalog business will remain core elements of Discovery's investment going forward.

Licensing and Retail Partnerships. Discovery Communications will continue its licensing partnership with transportation retail specialist Hudson Group, which operates Discovery Channel Airport Stores in top airports across the United States and Canada. Discovery will continue the Animal Planet successful relationship with Toys "R" Us, which has generated great brand exposure, and also will develop long-term programs with key manufacturers to translate Discovery's content in a wide array of merchandising opportunities.

The strategic review of the commerce business was led by J.P. Morgan. Discovery Communications will retain Gordon Brothers Group, an advisory, restructuring and investment firm specializing in the retail, consumer products and real estate sectors, to facilitate the liquidation.

About Discovery Communications

Discovery Communications is the number-one nonfiction media company reaching more than 1.5 billion cumulative subscribers in over 170 countries. Through TV and digital media, Discovery's 100-plus worldwide networks include Discovery Channel, TLC, Animal Planet, Discovery Health, The Science Channel, and Discovery HD Theater. Discovery Communications is owned by Discovery Holding Co. (NASDAQ:DISCA)(NASDAQ:DISCB), Advance/Newhouse Communications and John S. Hendricks, Discovery's founder and chairman. For more information please visit www.discovery.com.

Source: Discovery Communications

CONTACT: Michelle Russo, +1-240-662-2901, Michelle_Russo@discovery.com

Web site:

http://www.discovery.com/
http://discoverystore.com/

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