Upfront: BBC & Discovery go public with alliance details

After 18 months of negotiations, details of the much-lauded programming alliance between bbc and Discovery Communications were announced at RealScreen press-time....
April 1, 1998

After 18 months of negotiations, details of the much-lauded programming alliance between bbc and Discovery Communications were announced at RealScreen press-time.

Discovery will pump over us$660 million into the bbc to develop coproductions for Discovery’s u.s. channels, establish new international services, and to launch and market BBC America, a new cable service in the u.s. The agreement creates what bbc director-general John Birt calls an ‘alliance of giants.’

At a joint press conference held via satellite in London and New York, Birt said, ‘We aim to become the leading force in factual networks in every corner of the globe.’

The deal marries the bbc’s reputation for program quality with Discovery’s strength in marketing non-fiction in the u.s. and abroad.

‘We are rewriting the rules of television,’ said chairman and ceo of Discovery Communications, Inc., John Hendricks.’We are declaring that non-fiction television is a big and successful business.’

Discovery will spend us$175 million during the first five years to finance coproductions to air on its u.s. networks. The bbc will offer Discovery first look, and should Discovery pass, it can then seek coproduction deals with other u.s. programming services. The bbc will retain all editorial control, as well as distribution rights, worldwide.

While providing a programming base for Discovery’s growing stable of channels, the deal guarantees a much-needed revenue stream for the bbc to continue making high-quality non-fiction product. [Initial coproductions to come out of this deal will include Walking with Dinosaurs, purported to be the most expensive non-fiction series ever produced.]

Discovery has anted up over us$100 million to launch BBC America. The service, which debuted on March 29, 1998, features a mix of drama, comedy, lifestyle programming and bbc news.

The bbc controls programming content; Discovery markets and distributes it. Although currently available on a digital platform only, plans call for the channel to be both an analog and digital service in the future.

Hendricks projects that BBC America will have 20- to 25-million subs within two years and should reach profitability within 36 to 48 months. He says the channel is in the same position at launch that Animal Planet was two years ago. Animal Planet (which is 20% owned by the bbc) is now available in over 37 million u.s. homes and has an asset value of over us$500 million, according to Hendricks.

BBC America’s lineup may cause concern at pbs and a&e, as both broadcasters carry a heavy load of bbc product, but Ronald Neil, chief executive, BBC Production, says this deal will not affect existing licensing agreements which the bbc has with other channels. No word, however, as to whether these deals will be re-signed once they elapse. Sixty percent of what airs on BBC America will be u.s. premieres.

The new deal may also cause furrowed brows at Discovery competitor National Geographic Channel, as it continues to seek carriage in the tight u.s. cable spectrum for a launch projected for either late 1998 or 1999. The dci/bbc partnership also effectively obstructs program supply from the bbc for National Geographic Channel services, both in the u.s. and overseas.

Globally, the first joint international venture from dci and bbc began last October, when Animal Planet and People & Arts launched in Latin America. All future channels will be shared on a 50/50 percentage. Other local versions of these channels are in development, but no new launches had been announced at press time.

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