“To win big you have to take big swings.” So says Discovery Communications CEO David Zaslav, and going by the evidence of the past year and a half, the man seems to practice what he preaches.
It was at the start of last year, after all, that Zaslav, joined by Discovery founder John Hendricks, Sony Entertainment chairman Peter Stringer and IMAX CEO Richard Gelfond announced the formation of a joint venture aiming to bring a 24/7 3D network to U.S. audiences by early 2011. A year later, the network has a name (3net), no firm launch date announced and still no guarantees that 3D will make a smooth transition from the big screen to TV.
But while it’s a big swing, it’s not something that’s out of character, either for the company or for Zaslav. As the Brooklyn-born CEO points out, “taking risks has been in Discovery’s DNA since day one.”
“We are now a leader with HD channels in more than 80 markets around the globe,” says Zaslav about how the company’s early leap into HD paid off. “Through our partnership with Sony and IMAX, we are positioning ourselves to be in the same position with 3D.”
The past year also saw Discovery Communications enter into another JV with Hasbro for a kids net, The Hub, that replaced Discovery Kids. But the eyes of the media were trained on another big swing.
The launch of the Oprah Winfrey Network (OWN) in January of this year, taking over the space from Discovery Health, was preceded by executive shake-ups and delays. In the wake of the economic downturn, Zaslav told Winfrey in no uncertain terms that the network would need more of a commitment from its namesake, in the form of increased airtime for Winfrey. In total, Discovery Communications kicked in close to $200 million for the net. Respectable ratings for the launch weekend suggest the big swing connected.
It hasn’t been all smooth sailing, however, what with well-publicized skirmishes with cast members from The Deadliest Catch and the exec shuffles at OWN causing some tongue-wagging. And on a stranger, much more frightening note, a hostage situation at Discovery’s Silver Spring HQ during the summer resulted in the death of the gunman, who stormed the offices to protest aspects of the company’s programming.
With all the hype and hoopla surrounding the new ventures, it was almost easy to ignore the successes of Discovery’s established networks. TLC, a brand invigorated by a seemingly innocuous docureality series, Jon & Kate Plus 8, that transformed into top tabloid and watercooler fodder, continued a hot streak with programs such as Sarah Palin’s Alaska and Sister Wives. Animal Planet and Investigation Discovery also performed well, and of course, the flagship channel more than held its own with continued strong performances from hits such as The Deadliest Catch and MythBusters.
So while risk-taking and rough rides can go hand in hand, it can all pay off handsomely: revenues have escalated to $3.8 billion, a 40% hike over 2006.
What are your immediate and long term expectations for OWN?
As with any TV network, the key to success with OWN will be nurturing its audience and delivering on the promise of the brand. We have a definite advantage with Oprah Winfrey, who brings a built-in audience, but it will still take time. Viewers have a set number of go-to channels that they surf. Our challenge is pushing OWN into that rotation.
Not only is Oprah an immense talent, but she also has the rare gift of identifying other talent. She is fully engaged in greenlighting the programming and personalities on the network that reflect her vision of ‘living your best life.’ We are confident that OWN is going to resonate with viewers. Over the long term, we believe OWN will be a top network among its key demographics.
What do you see as the main challenge for cable TV in the decade ahead, and for Discovery?
At the end of the day, content is king. John Hendricks founded Discovery 25 years ago with a simple goal of satisfying curiosity and making a difference with the highest quality content that engages and inspires viewers. Going forward, our goal is simply to extend that goal of satisfying curiosity to as many viewers as possible, wherever they choose to consume it. That applies both domestically and internationally, where we are very well positioned with the most extensive international platform in pay-TV. Of course, the strength of the cable business model is that content providers are able to recoup and profit on their programming investment through both advertising sales and distribution fees. The primary challenge going forward will be developing similarly favorable business models that continue to support new content creation across new distribution platforms.