Good day, ladies and gentlemen, and welcome to the Discovery Communications First Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Ms. Jackie Burka, Vice President, Investor Relations. You may begin.

Good morning, everyone. Thank you for joining us for Discovery Communications first quarter 2017 earnings call. Joining me today are David Zaslav, our President and Chief Executive Officer, and for the first time, Gunnar Wiedenfels, our Chief Financial Officer. You should have received our earnings release, but if not, feel free to access it on our website at www.discoverycommunications.com. On today's call, we will begin with some opening comments from David and Gunnar, and then we will open up the call for your questions. Please keep to one question so we can accommodate as many people as possible. Before we start, I would like to remind you that comments today regarding the company's future business plans, prospects and financial performance are forward-looking statements that we make pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are made based on management's current knowledge and assumptions about future events, and they involve risks and uncertainties that could cause actual results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see our Annual Report for the year ended December 31, 2015, and our subsequent filings made with the U.S. Securities and Exchange Commission. And with that, I will turn the call over to David.

Good morning, everyone. Thank you for joining us. Discovery's first quarter marked a solid start to 2017 highlighted by strong gains in global distribution revenues, continued ratings momentum across our portfolio of superfan brands and channels, and distinct progress in growing our digital and direct-to-consumer businesses. As the media landscape continues to evolve, we are focused on strengthening our global content portfolio and positioning it to reach our superfans every way they consume content. We continue to make significant headway on our strategy of maximizing our existing linear business, while simultaneously driving growth and investing in areas like mobile and OTT. Since the start of the year, we expanded multiple existing digital initiatives such as: our Amazon SVOD channels partnership in the U.S.; we made demonstrable progress with Eurosport Player, our live streaming service in Europe that provides an all access pass to the greatest sports events; and we entered into several strong new digital partnerships, including a pioneering joint venture with Germany's ProSieben to create a next-generation streaming OTT service, a first of its kind partnership in Europe. I'd like to spend a moment talking about the solid performance of our global content portfolio. In the U.S., our networks outperformed the down-market in both prime and total day led by Discovery and TLC, and also strength at ID, OWN and Velocity, which helped drive our U.S. ad sales up 2% on an underlying basis or 1% excluding the impact of the Group Nine transaction. And internationally, our ad sales grew 3%. In the U.S., Discovery Channel was again the number one non-sports cable network for men. And TLC continued its resurgence, gaining nearly 20% and ranking as a top ranked network for women. Internationally, TLC posted strong double digit viewership for the quarter and set new delivery records. At…

Thank you, David, and good morning, everyone, also from my side. I want to start off by saying that I'm very excited to be here at Discovery. Discovery is a company with an incredible global reputation, especially in Europe, and I have followed its trajectory closely throughout my career. David and his team have built an unrivaled portfolio of global brands that is uniquely positioned for growth around the world. I am thrilled to have joined this world-class team and to bring my prior experience in the European and digital markets to this exciting and dynamic company. I'm very optimistic about Discovery's strategic positioning and outlook, and I look forward to speaking with all of you more going forward. Now, delving into our financials, as David highlighted, our first quarter results were driven by continued global distribution growth combined with a strict focus on cost management. Our total company reported revenues and adjusted OIBDA were up 3% and 5%, respectively, while constant currency revenues and adjusted OIBDA were up 5% and 4%, respectively. Currency impacts continue to improve. In the first quarter, currency reduced revenue growth by 2%, while the combination of our successful hedging program and certain emerging market currencies moving in our favor led to currency helping our adjusted OIBDA growth by 1%. Net income available to Discovery Communications of $215 million decreased versus the first quarter a year ago. This was on the positive side driven by our improved operating performance and lower effective tax rate. These positive effects were more than offset by a one-time debt extinguishment charge, a larger solar-related loss from equity investees, and higher restructuring charges. Please let me explain these effects in a bit more detail. Our tax rate of 20% was a full 700 basis points lower than our full year…

And our first question comes from the line of Alexia Quadrani of JPMorgan. Your line is now open.

Thank you very much. Just following up on your comments on domestic advertising trends, where you highlighted better pricing, I guess, any more color on the scatter market and how it's trending in the second quarter? And then, just a quick follow up on your commentary on your investment in short-form digital video that you highlighted. Can you add some color on how you expect to monetize it over time? Is it largely gaining mind share for the millennials and building up your brand? Or do you see, I guess, an incremental revenue opportunity associated with those videos as well? Thank you.

Sure. Hi, Alexia. The advertising market kind of feels steady as she goes. We don't have a lot of visibility to the upfront, but scatter pricing is up mid-to-high teens over the upfront. The volume is relatively steady. We come into the market right now in the second quarter and into the upfront, I think, with a very compelling story. Our ratings are up. We're up in April in prime, up 5%, while the industry is down 8%. And for the full year-to-date, we're flat in prime with the industry down 6% and broadcast down 12%. But, more importantly, I think we're a very protected environment. Our brands have never been stronger. So not only do we have a growth story, but we have a real strength of viewership story on ID, on TLC, on Discovery, on OWN. And so, it's an environment the advertisers are quite comfortable with, and so I think that we're finding the market to be steady, and we're starting to take advantage of it with the quality of our brands and the fact that we actually have some real ratings. On the short-form monetization, the good news for us is that we're learning a ton. This whole Group Nine transaction has been terrific for us. We're building even stronger relationships with Facebook and Snapchat. We're understanding a lot more about the consumption of one minute videos. We're up to over 4 billion in views. We're the number one or two video provider for news on Facebook, and we're experimenting with them in different ways to monetize that. Guyardo is working with our entire team in putting Group Nine together with GO, together with our traditional inventory, so we have a great 360. And together with Snapchat, I feel like we're reaching more demos, a significant difference from two or three years ago where we felt like some of those demographics were being left behind and our story-telling capability in short-form, we felt like really needed to be improved. So we're quite happy with where we are. I think the monetization of short-form has a fairly long way to go. And so if there is upside there or if it takes a turn, we are now one of the – we're the number two or three provider of short-form content in terms of all the media companies, and we have a right to take control of Group Nine in two years. So I think it's been good and it's working very well with our ad sales team, and it gives us, I think, a very forward-looking view in terms of being able to reach all demos as we hit the upfront.

Thank you very much.

Thank you. And our next question comes from the line of Ben Swinburne of Morgan Stanley. Your line is now open.

Hey, good morning. David, can you talk a little bit about your expectation? I believe your guidance is for acceleration in international distribution revenue growth later this year. And any update on sort of how you're thinking about the Bundesliga rights monetization. And I don't know if you guys are comfortable talking about through the Olympics next year, but to the extent you can help us think about distribution revenue trajectory into 2018. That would be really helpful. And Gunnar, I was just curious if you could – I don't know if you're willing to, but if you could give us the impact on U.S. distribution revenue from the year-over-year licensing change. I don't know if there's any – like a basis points impact or anything to help us isolate the core number. Thank you both.

One point before I pass off to Gunnar who spent an enormous amount of time dealing with these issues in Germany and with ProSieben. One of our philosophies on our IP is that we own it on all platforms, which is meaningfully different from the way that sports is sold here in the U.S., for instance, where when you see it on a mobile player or on another platform, it might be the league that sells it, it might not – somebody's buying a broadcast window or a cable window. So when it comes to the Olympics and when it comes to the Bundesliga, when it comes to all of our sports rights, when it comes to almost all of our IP, we own it for all platforms. And so, if you see our content turning up or if you see the Olympic rings turning up with a mobile player in Europe, if you see the content over-the-top on mobile, on any platform, or the Bundesliga or any of our sports, that's why we can go direct-to-consumer with it, we could offer some of it free. And so, I think there's no question we're a little bit long on IP. We are profitable with our sports, but we're long on it because we think owning that IP for all platforms, owning our kids IP for all platforms, is part of the part of this transition we're making into creating real value to address some of the terminal value concerns that the industry's facing. Gunnar?

Yeah, sure. Ben, good morning. So, on the affiliate revenue growth guidance for international, as you could hear in my opening remarks, we're continuing to target a 12% to 13% full year growth rate, and if you look at the run rates, as you say, we got 10% in Q1. I also said that we're going to see a slightly lower rate in Q2, which is not a change in the trend, but it's more related to a prior year comp where we had some catch up in Q2 2016. And then, as you say, we're targeting a pickup in the second half based on some deals that we're working on currently to get to that 12% to 13% figure for the full year. On Bundesliga specifically, maybe allow me one or two comments. As David said, I've lived in that market for all of my life, and really, it's important to understand Bundesliga is one of the top, top sports franchises in the market. We've got a good share of that. We own the rights for four years. It's a strong right and a good deal for us in terms of the duration. And looking at the number of players that are in the market that are looking for premium IP, we're talking to a number of players, and I'm absolutely convinced that the Bundesliga deal will help us strengthen the portfolio in the market. Talking about Bundesliga, again, from my perspective, a very interesting deal; I very much like that pan-European cross-platform approach to that deal. And again, I believe we will be able to create a lot of value, especially if you look at the eight-year period that we're looking at.

For the Olympics.

For the Olympics, yes.

And the deals that we've done for the Olympics thus far have been ahead of plan. And by locking in those rights, we're excited about the fact that Germany is kind of the real center spoke of Europe, so not only do we have Eurosport free-to-air and pay in Germany, we have a free-to-air female channel, a free-to-air male channel, and we'll be doing the Olympics ourselves in Germany, which we think will add a significant amount of value, and having extra scale in Germany is important to us because it's such a robust market.

And then, Ben, maybe your second question, the impact of those other distribution revenues on the U.S. side, we just felt it important to highlight that there were some contributions from those deals. It's small in the greater scheme of things in the whole distribution revenue line item. And we see more of those deals coming forward as we look at the full year.

So that was really just some bulk delivery of content to our existing partners. It's a very small component of Q1, but when you add it on top, it provided some growth. So we felt it important to point that out and we may do more of those.

Got it. Thank you, both.

Thank you. And our next question comes from the line of Michael Nathanson of MoffettNathanson. Your line is now open.

Thank you. Two – one following up on Ben and a new one. David, you guys been very clear about the Olympics in 2018 driving affiliate revenue growth internationally, it's going to step up. Could you talk a bit about how the costs layer in for the Olympics and is 2018 incrementally profitable because of those stepped up affiliate fees or is the Olympic profitability more back ended? And then, on the cost line, if you go back to your Investor Day in 2015, like almost two years ago, you guys talked about your ability to control costs under different scenarios of revenues. Now that we're two years later and you kind of see the normal rate of growth in the market, can you talk again about your ability to control cost and kind of what's the right way to think about domestic cost growth if this is the new normal of revenue growth?

Okay. Michael, this is Gunnar. Let me take that. So, on the Olympics, it's still too early to really talk about the exact cadence of how the P&L impact will turn out. A couple of things that are clear from today's perspective is that the 2018 allocation of cost is going to be the lowest given that we don't have all the rights or not as many rights as in later years. So we will update our models and update you as soon as we have a reliable set of figures across those eight years. Generally speaking, the Winter Games are less expensive than the Summer Games, and we definitely see an upside from the Olympics deal generally on affiliate revenues. As a matter of fact, you can already see European affiliate revenues going back to double-digit without even having factored in all the sports rights. And we also, obviously, see contributions from our Eurosport Player. (37:10)

The cadence that Gunnar was talking about is simply that we got all the rights for eight years, but in the UK and in France, we didn't get the Olympic rights until 2022 and 2024, but we did structure a deal with the BBC, whereas part of their rights to carry the Olympics, we got a substantial amount of rights and extensive digital rights in 2020 and 2022. But when you allocate the actual fees, because of France and the UK, the cadence is a little bit different, that's all.

And then, Michael, on the cost guidance, I think, looking at the Q1 numbers, you see that the company is very focused on cost management. Clearly, coming in, I will continue that focus and take a fresh look at cost as well, but I must say I'm very happy with the performance that Discovery has delivered on the cost side in Q1. So, the general guidance for us for 2017, as I said before, is total company organic cost of revenues up high-single to low-double digits, and we will be even more restrictive on SG&A on a total company level targeting flat-to-low single digit increases for our cost base. So please be assured it will continue to be a clear focus of the management team here.

And Michael, just to confirm our company but also my full engagement in social media, I was following the hundreds of notes and likes for your birthday yesterday on Facebook, as well as the numerous picture posts, all of which I thought were very nice. Happy birthday.

Thanks, David. Thank you. Thank you.

Thank you. And our next question comes from the line of Richard Greenfield of BTIG. Your line is now open.

Hi, thanks for taking the question. AT&T's Randall Stephenson was testifying before Congress late last year, and he said point-blank to Congress that he said a huge number of consumers want cheaper video bundles without the high cost of sports. And David, you've talked to the rise of these new virtual MVPDs as an opportunity. So far, they seem all very sports heavy, including kind of, as a basis, the broadcasters and the RSNs, which push not only the cost towards $40, but it also has led to Discovery and others being left out of things like Hulu and YouTube launches. Wondering what do you think of the prospects are for new bundles that may not have the broadcasters or may not have the RSNs that could be priced below $20. And then I have a follow-up on Group Nine.

Thanks, Rich. Well, first, I think, ultimately, consumer behavior and consumer consumption is what drives the capitalist market. So you can develop a channel, but you have to create content that people want to get nourished by. So you can sit in a conference room and say what you want to provide people. Ultimately, the consumer is the one that is always the determining winner. And you look at outside the U.S. – outside the U.S., there have been very successful skinny bundles. We're on all of them. We have quality content with strong brands that are valued. Our cost of content is relatively low. And we've done extremely well on all of those skinny bundles all over the world, in Latin America, in Eastern Europe and Europe, and each of them have been in the very low price range. And even when there is sports, sports is just hyper-extended here in the U.S. reflected in regional sports, traditional sports. Retransmission can extend the integration of sports with other channels. And so this is a bit of a stuffed turkey here, and in many ways, when I read about the skinny bundle here in the U.S., I see the skinny bundle in 200 countries. When I look here in the U.S. and I read skinny bundle, there is no skinny bundle here. Skinny bundle in the U.S. is a fiction. The idea that you have a $40 offering filled with regional sports, sports and all these – an incomplete package, really, and then you have to buy broadband on top of it, so the skinny bundle is $60 or $70. So it's really not a skinny bundle. It's a bundle. It's a bundle that may be attractive to a small group of people. But, in the end, I think the market will be rationalized. We represent 12% or 13% of viewership. We have the top channel for women in ID, the number one channel for men in Discovery, top channel in Middle America with TLC, a top channel for African Americans with Oprah and Tyler, and our cost of content is low. We are on DIRECTV NOW. We're on Sony. We're on many of the platforms. But, ultimately, there should be a bundle like everywhere else in the world that's $8, $10, $12. And I believe that will happen. I think these overstuffed turkeys are going to end up being a challenge from a consumer perspective, and the consumer's going to say, I'd like to have an opportunity here. And in many ways, Netflix is a terrific company, and they continue to be very effective, and so does Amazon, but we as an industry need to complement that with a quality offering that isn't – that's a true skinny bundle in the spirit of what's working around the world, and I think that'll happen. It's just a question of when.

And just wanted to follow up on Group Nine. I think you mentioned 4-plus billion, I lost the exact number, but 4-plus billion views is what you're getting across a variety of online mobile platforms. Is that a business that at that scale is generating profits or is that a business that's still losing money? Or like, is there any way to size kind of the revenues and whether it's profitable or not?

Well, it's not profitable, but it's pretty close, and our overall approach right now – it's run by Ben Lerer, who's doing a terrific job there. We put some of our assets into it. When we closed on it, it was $3 billion. Now it's $4.2 billion. We continue to learn about what engages people. We have great analytics. So I think that it helped us lean into our understanding of what kind of content we could provide for Snapchat. It's informing the way we tell stories, the kind of stories. And so this pivot to mobile is quite important for us. As we look at over $7 billion screens out there, we're the leader in traditional platform on linear around the world, and we own all of our content so we can move a lot of our long-form content. But being able to repackage with The Dodo, we have Animal Planet, which is a leader around the world, and now we have The Dodo, which is the leader now in short-form animal content on the web. And so being able to own those different areas are critical. We're not focused today on making money. We're focused on learning. We're focused on getting more scale. We're focused on building our relationship with Snapchat, with Facebook, with all of the different outlets out there, and have millennials kind of really get nourished and excited about what we're doing. And in the long term, we're hopeful that they'll be a meaningful currency, and we're actually working with Facebook now on different ways that we can do that, which I think is in both of our interests.

Thank you very much.

Thank you. And our next question comes from the line of Todd Juenger of Sanford Bernstein. Your line is now open.

Hi, good morning. I'm following along for my colleagues across the various revenue lines. I guess maybe I'll tackle international advertising, if I may, especially since you guys probably have the best view of that of pretty much any company I know. So, I guess I'd frame my question this way. If you think about sort of the run rate that you are at this quarter and have been for a while, and compare that back to the Investor Day, which your expectations, I think, were somewhat higher, trying to figure out like what's caused that delta? How much of it is cyclical? How much of it is structural? How much of it is geopolitical? And are we basically at a new reality now where the run rate we're seeing is kind of the run rate going forward? And just a quick follow-on related is we've talked about the Olympics in many ways. Nobody's asked yet about Olympics advertising. Again, I don't know what you're prepared to comment on, but it's only a year away for the Winter Games, which is a big geography for you. Any help you can give on advertising perspective, just the magnitude of that box as we're thinking of where the health could be there? Thanks.

Okay. Thanks, Todd. On the advertising side, look, we – in Europe, we really haven't gotten help in 11 years. GDP across Europe, if you take out the UK, has been effectively flat, and the advertising follows GDP. So we've been able to grow despite that. But there have been some geopolitical issues. There's no question. You have the UK down 4% and Brexit has had a meaningful impact on the UK. That's a big market for us. There was a restructure in Russia. We're one of the leading players in Russia. We were the first ones that were brought back. Many of the media companies that want to get into Russia now have to go through our media partnership. But Russia changed because we can only own 20% of it. There are values that we can get outside of the 20%, but things changed there. So, in mainland Europe, we're doing quite well. We're growing in – outside of the UK and Asia, we're growing in every market. And Latin America is growing high-single digit now, but it was growing 20%, 30%. So the fact that Brazil kind of tipped and Argentina has struggled for a while, and Mexico is having some challenges is having an impact, but we're still seeing high-single digit growth in Latin America. We're still seeing growth across all of Europe. Some of that has to do with the fact that our share is growing, and our brands are stronger, but we expect that that will continue, and we're used to doing business in a difficult environment. The other thing that we're seeing is Asia is tough, and it's likely to be tougher. In some ways, we have a smaller business in India, but I'm glad we have a smaller business in India because the…

And Todd, maybe if I can add one point to that discussion, I think if you take a step back, you referred to the 2015 mid-term guidance, right? Yes, advertising has been somewhat slower, affiliate has been slightly stronger, and if you look at the total company guidance, EPS, free cash flow guidance has even been raised after.

Fair point. Thanks. Any comment on the Olympics while we're on this or not?

Yeah, so as I said before, it's really too early to give you any specific numbers, but I feel very strong about the Olympics deal. We have all kinds of monetization opportunities: sub-licensing, affiliate, advertising. We have complete rights, all platforms. So we'll be able to cover literally every moment of the games on air, online, over-the-top, on-the-go. So I think there's a lot of opportunity for us, but please understand, it's just too early to give you any specific guidance there.

Got it. Thanks.

Thank you. And our next question comes from the line of Vijay Jayant of Evercore ISI. Your line is now open.

Thank you. This is David Joyce for Vijay. Could you please help us think about the distribution opportunity internationally? Obviously, you've talked a lot around your over-the-top and direct-to-consumer opportunities, but with the increasing penetration around the globe of the pay TV footprint, how should we think about growth in the different regions? Thank you.

Sure. What we've seen is, across Europe, we'd expect it to be relatively flat, maybe even slightly We pivoted. We pulled our signal four times in the last 18 months, so most of our growth now is coming from price. We're being helped by sports. In Latin America, a lot of our growth is coming from price, which is really a change. If you look at the last 15 years, the majority of growth in Latin America, in Asia, even in a lot of Europe was really – the U.S. was increasing price, so you got double dip. You got a higher price and you got more subs during kind of the heyday. Outside the U.S., your price increase came from subscriber growth. And so, we have had to kind of retrain that market over the last two years by getting our content and our IP more important and by driving for price, and we've been successful with that. In some of the markets, Brazil was growing quite aggressively. In the last 18 months, two years, Brazil has actually lost 2 million subscribers. And so that's a function of the actual economy. The C class had accelerated, and then the disposable income had evaporated, and you actually – if some of that comes back, which a lot of people are predicting that it will over time, as Argentina's feeling better now, Colombia's feeling better, if Brazil makes the turn, that would be upside for us. We don't have that in our plan. Our plan is that the growth would be coming from primarily price.

Great. Thank you very much.

Thank you. And our next question comes from the line of Steven Cahall of Royal Bank of Canada. Your line is now open.

Yeah. Thank you. Maybe just one on subs and then sorry for another one on the Olympics. Maybe first on the subs, I think in the press release, on domestic subs, you noted a slight decline, and then I thought in the comments, you noted a slight acceleration. So I wonder if you could just give us a little more color as to what you're seeing in the overall pay TV sub picture domestically. And then on the Olympic side, again, sorry to push you again, I think this is going to be a theme for the next few quarters. But, looking at your filings, I think your President of International had some new targets around the Olympics. When I sort of back into, if he's able to achieve those, it would suggest to me a margin on the Olympics that maybe looks a little bit like that double-digit you talked about for Eurosport before. Is that just getting way too exact way too early on, or is that a reasonable assumption for how to think about the games in 2018?

Yeah, so look, we're seeing – what Gunnar said is what we're seeing. We're seeing a slight acceleration on universe decline. We said we were on average about 3%, and for our bigger networks, it's actually less than that, and we have some pretty good protections against that. That's where most of our overwhelming amount of money comes from. Some of the smaller network, we actually saw meaningfully higher. So when you put it altogether, it was about 3%. That's in our plan. So this is not ahead of what our plan was for the year. If there was significant acceleration from that, then that would affect our plan, but we were doing a little bit better than planned last year, and so now we're kind of on it. So that's where we are on that. One point on the Olympics; the overwhelming majority of the value that we get is kind of what I would call long cycle sub-distribution revenue. We're holding back. In some markets, we're doing all of it. But, in a lot of markets, we're sub-distributing to a free-to-air player. We get guaranteed revenue. We've done that in multiple markets. We then hold back a significant amount of content for Eurosport, which we then sell. We then hold all the rights and we go direct-to-consumer. We could offer it as a whole package. We could do it by sport. But this is – the overwhelming majority of the dollars is sub-distribution revenue that's more long cycle that we'll be able to give you some visibility on, but we're ahead of plan on the deals that we've been doing. But it's too early to talk about the actual margins. But it's – not only do we think that we'll do nicely on it, but it also has helped us in the marketplace. It's helped us in terms of building up our overall distribution revenue. It's helped us in aligning with the federations; it's helped us with the IOC, with additional sports throughout Europe. So it's been a very – it's been a big positive and we're looking forward to it.

Great. Thank you.

Thank you. And our next question comes from the line of Anthony DiClemente of Nomura Instinet. Your line is now open.

Thanks and good morning. I have two. First, for David, on the Eurosport Player, so David, you mentioned contributions from Eurosport. I mean, I suppose this might be for Gunnar as well. How many subs do you have? You talked last year, I think, about the March 2 (56:43) million subs. Just wondering broadly where we are. You gave us pretty robust growth rates of subs in your prepared remarks. And so what I'm getting to is, how many points of your international distribution growth is coming from the Eurosport Player? So you gave us the number of points from GO in the U.S. Just wondering right now how much of that growth is coming from Eurosport and then what's in your outlook for 2017 and beyond for contribution. And then, separately for Gunnar, the company struck this streaming joint venture partnership with ProSieben, your alma mater, I suppose. So what are the expectations for that product? You'll be competing with, let's say, Netflix and other subscription OTT services in the German market. Is this kind of ad supported OTT strategy something you think is specific for that market or is it a blueprint that you can potentially replicate in other geographies? Thank you.

Thanks, Anthony. Look, we're adding a substantial amount of subs. We're doing a better job with churn, but what's most important for us is, directionally, we're figuring out what nourishes an audience, what people are willing to pay for, what excites them about the player, and what kind of a player we need to have a really competitive sports Netflix product to serve the 730 million potential opportunities we have across Europe. And one of the big learnings we had is our old player was only able to offer all the sports. And so by August of this year, maybe early September, we'll have our BAM, Major League Baseball product, deployed across Europe. That's going to be a huge difference for us, because one of the things we're finding is rather than people paying $8 to get a whole bunch of things, what they really would rather do is do a seasons pass. They'd rather pay $6 and get all the cycling, and then they could hit another button and they can get all the tennis or they can get all of the speed skating, or they can get all of the winter sports, or all the track and field, or all the squash. And so we've deployed a full team now that's operating out of the UK. This is a team that helped build not just the NFL package here in the U.S. with DIRECTV, but the NBA package. So we've hired a whole different group of people. And we haven't even launched our new player, which we'll be launching in the next couple of months. So are we doing a lot better? Yes. Is our churn doing better? Yes. But most of our success has come from the fact that we're learning that, instead of offering a magazine that offers a little bit of a whole bunch of sports, that we're better off going to these superfan groups. And over the next year, year and a half, we'll give you significant – much more information about how we're doing. We first want the player to launch. We'll be offering the Olympics. We'll be offering the Bundesliga. We'll be offering individual sports, which we've already started to do in Northern Europe and in certain markets. And right now, the affiliate growth is not in any meaningful way from the player. And we have a significant amount of cost that we're putting against it, because we've hired a lot of people and we really believe that that sports Netflix product is a game change for us.

And Anthony, on that streaming JV, I'm very excited about that deal. I think it's a great JV in itself and it's even more opportunity and optionality for us going forward. So I think there is a desire for people and for consumers in the marketplace to have one destination where they can get most of the stuff they want to consume on an OTT basis, and I think we have done a great step towards that. ProSieben has an established seven TV platform with a strong installed base already, and we're leveraging that now. And I think there's a lot of optionality going forward. We're open to bringing on other players via broadcasters or some of the networks that are otherwise only available in pay TV. So, you can think about an SVOD option. You can think about integrating the Eurosport Player, et cetera, et cetera. So there's a ton of optionality and I'm very excited about that JV in the German market. And I clearly think that it can be replicated in other markets in Europe and that should be our aspiration as well.

Great. Thank you very much.

Thank you. And ladies and gentlemen, that does conclude today's Q&A session. Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone have a great day.