Yes, the U.S. pay TV industry has a problem — and it’s the fault of high-priced sports programming — Discovery CEO David Zaslav told analysts today in a call to discuss his company’s Q3 earnings.

“One of the things that has stopped the growth of cable is the price of all that sports,” he said.

A lot of people have “gone to other services or disconnected,” he says, and “the biggest impediment now is the price of cable in the U.S.” which has been rising “mostly due to high sports fees.”

Discovery lost about 2% of its subscribers in Q3, and expects that to continue in Q4.

But this is a U.S. problem, Zaslav says. “The existing [pay TV] ecosystem around the world remains strong.”

He also doesn’t fear that Discovery will suffer with the planned rollout this month of AT&T’s DirecTV Now, which CEO Randall Stephenson says will offer more than 100 channels for $35 a month.

“They’re going to have an opportunity to reach out to subscribers that they otherwise couldn’t get,” Zaslav says. Some analysts say that the service could cannibalize traditional cable and satellite subscriptions.

DirecTV Now will carry “a number of our services,” he told analysts.  He wouldn’t specify how many, or which ones, but said that they account for about 85% of Discovery’s domestic revenues.

Meanwhile, Discovery is beefing up its own digital offerings. including from its recent agreement to pay $100 million for a 39% stake in a new holding company — Group Nine Media —  that includes Thrillist Media Group, NowThis Media, The Dodo and Discovery’s Seeker digital network plus its SourceFed Studios production operation.

“We got scale, we got data analytics, and we have an ad sales team we can rely on,” Zaslav says.

Discovery’s weighing the possibility of launching its own direct-to-consumer streaming services focusing on autos and on science.

“That’s something we can offer globally,” he says. “We’re playing with the best way to offer it.”

He’s upbeat about the opportunities for Discovery’s Eurosport to sell direct to consumers in Europe as a result of the alliance announced this morning with Major League Baseball’s technology platform, BAMTech.

While Netflix plans to spend more than $6 billion next year on content, Discovery’s sports costs would be nil because “we’re already making our margins on Eurosport.”

Zaslav adds that he isn’t worried about Netflix’s plans to beef up its unscripted programming, potentially challenging Discovery.

“Directionally they’ve moved to be more like an HBO,” he says. “We see them more as a premium service. HBO and Showtime are also doing non-fiction and documentaries. We don’t see them as a competitor.”

On the programming front, Zaslav says new shows on Discovery Channel should result in “meaningful improvement” in its flagging ratings.

He also says that “we’re seeing the turn” at TLC, which he acknowledged “has been a challenge.”

“The overall trend in the last few weeks has been better,” he says as execs tried to figure out “where did we lose some acceleration?”

“We think we have some good content coming up in the fourth and first quarter,” Zaslav says. Oprah Winfrey’s OWN partnership with Discovery “was a challenge for us and now it’s a top 10 or 12 network for us…We’re not going to have all 14 of our channels growing at the same time.”

Discovery shares opened down 4.7% after the company reported weaker than expected Q3 earnings.