NEW YORK (TheStreet) - Analysts at Bernstein Research believe Discovery (DISCK), Time Warner (TWX - Get Report) and 21st Century Fox (FOXA - Get Report) are well positioned to see growth in Latin America's pay-TV markets.
Discovery, Fox and Time Warner have made Latin America one of its top priorities based on the time and resources they have invested in the region. According to the report, Bernstein forecasts Latin America growth between 11% and 12% over the next five years. Barclays rates Discovery shares "outperform" with an $87 price target.
The expansion in Latin America comes as Discovery is being mentioned as a possible acquisition target for any number of media, technology and telecom companies looking to acquire a well-respected content producer. Scripps Networks Interactive (SNI), owner of HGTV, the Food Network and the Cooking Channel, is another company that may also be acquired as newer content producer such as Netflix (NFLX) and Yahoo! (YHOO) join Amazon to compete with Comcast (CMCSA) and more traditional entertainment companies such as Time Warner (TWX - Get Report) and 21st Century Fox (FOXA - Get Report).
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With estimates that Discovery, Fox and Time are expected to see growth within the next five years and suggestions that total Latin American subscriber growth is expected to increase about 8% per year, who is going to come out on top?
Surprisingly enough, it appears that the documentary laden Discovery will benefit most. Latin America appears to be a valuable asset to Discovery as revenue generated in the region accounted for more than 14% of Discovery's total cable revenue in 2013. In last year's annual report, Discovery said it has 12 channels with 310 million cumulative subscribers in 49 different countries throughout Latin America.
It also appears that the region is more than willing to pay for what Discovery is selling.
"Discovery Networks Latin America/U.S. Hispanic achieved its highest quarterly primetime ratings ever during the first quarter as ratings among 25 to 54 year-olds in primetime increased 12% with some of the most popular channels including Discovery Channel, Discovery Kids, and Discovery Home and Health.
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