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David Zaslav wants to conquer the world and if along the way he can help save it, so much the better.
The chief executive of Discovery Communications does not have far to go. Discovery, home to cable channels the Discovery Channel, Animal Planet and now Planet Green - a 24-hour channel that teaches Americans how to live an environmentally friendly life - beams into 173 countries already.
All Zaslav has to do is wake up some of his sleepier channels and drive up thin overseas profit margins. As reality shows like Big Brother begin to show their age, he hopes the day of the documentary has returned.
“A lot of reality programming is starting to look similar,” he said in an interview at his US headquarters in Silver Spring, where visitors are greeted in the lobby by a huge dinosaur skeleton. “Coming back [to us] for a bit of nourishment, along with your entertainment, we hope is going to be more attractive.”
Discovery’s reputation is for natural history and science programmes, like NASA’s Greatest Missions celebrating the Apollo moon landings, but these days its big hits also include more offbeat entertainment offerings such as the survival exploits of Bear Grylls.
“At our core we have the best content, the stuff that really satisfies curiosity,” said Zaslav, who joined from NBC in January 2007. “That is what works best around the world.”
Zaslav’s newest baby, Planet Green, took the place of Discovery Home in America in June. He wants it to be aspirational, not preachy. A cookery show is broadcast from a Whole Foods store, for example.
“People should go away from watching Planet Green and be inspired a little bit,” he said. “The idea is that we all can do better, not talk about what anybody is not doing.” It is just the thing to draw in organic foodies and people who drive a hybrid car, as well as advertisers chasing the green dollar.
Even with 350m subscribers for its biggest channels, Discovery is the latest American broadcaster to acknowledge that it must boost its overseas business, where more than 70% of its audience already lies.
“To secure long-term growth in traditional and new media, it is now essential that American companies build businesses outside the domestic market,” said Pete Smith, the London-based president of NBC Universal International.
His company, one of the four big American networks, last year bought Sparrowhawk Media, owner of the Hallmark Channel outside the US, and more recently Carnival Films, producer of the BBC1 drama Hotel Babylon.
Discovery’s gross margins are 29% at its international arm, which made up a third of its £465m revenues last quarter, compared with 52% at home. In Britain, its largest territory outside the US, the company gets fees from Sky and Virgin Media to air 11 channels, plus advertising income, which has been suffering from a downturn.
Discovery’s latest top-rated show is Deadliest Catch, which follows fishermen during the Alaskan king crab season, and was watched by 216,000 the week before last. To boost its reach, Zaslav would love to start broadcasting on Freeview.
“It is something all of us in the content business in the UK are looking at,” he said. He will also be in the queue to launch high-definition channels here.
Factual programming offers clear economies of scale. Without actors, documentaries are typically cheaper to make than drama, export around the world more easily than news or lifestyle programming and age well, which bodes well for repeat runs.
“Whilst landmark productions certainly find space on BBC1 and BBC2, the genre has to a great extent decamped and now thrives in the arena of dedicated documentary channels," said Shane O’Neill, who runs Chellomedia, the European arm of John Malone’s Liberty Global, which part-owns Discovery.
It is estimated that Discovery spends £100m a year on British commissions. Zaslav wants more overseas productions for his American schedules.
“We have to get rid of this American domestic arrogance - the idea that what is created in America is best in class and we’ll just push it. We need to push and pull,” he said.
Discovery gained its independence on September 18, the culmination of a year-long attempt by Malone to untangle the broadcaster’s complex ownership structure.
Malone will combine his stake with that of Advance/ Newhouse Communications - owner of the Condé Nast publishing house - to create a new public company, but keep 23% of the voting rights.
Zaslav said that public status would give the company more scope to acquire assets.
He has already bought a web-site, Howstuffworks.com. But Zaslav’s prime task has been to add impetus and viewers to Discovery’s channels. That involved ditching shows such as Monster Garage and American Hot Rod that strayed from its stated aim to educate and inform.
Zaslav also began the hunt for strong brands to cut through the multi-channel clutter. That is why Oprah Winfrey Network (OWN), run in conjunction with the chatshow host of the same name, will replace Discovery Health in late 2009.
If anything else needs a makeover, Zaslav believes it is Discovery’s long-standing relationship with the BBC. Discovery is the BBC’s most important overseas partner. The pair co-produced the landmark natural-history series Planet Earth, which drew huge ratings for Discovery. Two more projects, Frozen Planet and a series on apes, are in the pipeline.
The BBC rakes in profits through its commercial arm, but how much it has contributed to Discovery’s £2.5 billion market value is a moot point. At the moment, the BBC’s reluctance to cede control of online rights to its programming is a more pressing issue.
“The relationship was built at a simpler time,” admitted Zaslav. “Video on demand didn’t exist when we did our deal. DVD sales weren’t part of the overall business model.”
The pair also co-own Animal Planet, Discovery’s second-widest distributed channel, and the lesser People+Arts in some territories. However, the BBC took back advertising sales for its channels in America from Discovery because it felt they were not being promoted hard enough. It is also trying to rebrand all its overseas channels under the BBC banner – to which Discovery is unlikely to agree.
“They’re still with us,” Zaslav added. “On the other hand, there may be things, over the years, that they would feel better if they owned and we would feel better if we owned. There’s a lot we can do together. Our challenge is how to make that relationship work the best and I know that’s their focus, too.”
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