Discovery Communications has made big moves in Europe recently, with activity in France, Italy and the Nordics. Realscreen talks to Discovery Networks International’s Mark Hollinger (pictured) to learn more about the company’s growing global ambition.
For an organization that bills itself as “the world’s number one non-fiction media company,” Discovery Communications made some bold steps outside of the factual realm last month.
First came the news that flagship U.S. net Discovery Channel had ordered its first scripted miniseries, the Scott Free- and eOne Television-produced Klondike, which begins production in March.
Then news arrived of a triple-whammy, US$3 billion spending spree: Discovery reached an agreement with the ProSiebenSat.1 Group to buy the company’s SBS Nordic operations for $1.7 billion; entered into exclusive negotiations with France’s TF1 to buy a 20% stake in the Eurosport group for $221.6 million; and approved a $1 billion increase to its existing stock repurchase program.
On top of that, the company extended its reach further into Europe yesterday, penning a deal to acquire Italian broadcaster Switchover Media for an undisclosed sum.
The SBS deal covers 12 television networks across Norway, Sweden, Denmark and Finland, and notably expands Discovery’s brand portfolio by adding general entertainment, scripted and sports programming for the first time.
“It clearly is an expansion beyond the traditional non-fiction base,” Discovery Networks International (DNI) president and CEO Mark Hollinger tells realscreen. Having been at Discovery for 21 years, he sees the moves befitting a long-term blurring of the traditional hard lines between genres.
“When I started at Discovery in 1991, documentaries were documentaries. It was ‘the voice of God,’ it was a serious subject, and it was all about imparting information. Clearly the ways that factual programmers have told stories and imparted information have changed dramatically over the years, and I think with a lot of success with audiences.”
Citing History’s success with its “historical fiction” miniseries Hatfields & McCoys, Hollinger says, “that blurring of lines is something that’s going to continue. Where does factual end and general entertainment begin? To that extent, it’s not as dramatic a shift to say we’re now getting into general entertainment and sports, although having said that, yes, these are new genres for us.”
In addition to a 20% stake in Eurosport, the negotiations with TF1 also cover the development of pay-TV content between the two companies, giving DNI a bigger overall footprint in France, a territory Hollinger says the firm is “very underrepresented” in, compared with the rest of the world.
“We first launched in Europe in 1989, but we didn’t get into France until 2004,” he explains. “We only have two channels there: Discovery Channel and Discovery Science. So for us to find an opportunity to get in and have access to a big channel portfolio, whether it was through launching channels or joint venturing on channels, was an important part of the development of the business in Western Europe.”
Also on the table for a French partnership would be a link-up with TF1 Production, the broadcaster’s in-house studio. “They have an ambition to broaden their geographic remit beyond France, so it would be a good marrying up of the ambitions that we have to get access to more content, and the ambition they have to produce more,” Hollinger explains. “So we’ll start in a development relationship and work on ideas together, and get them produced through TF1.”
As for the Nordic deal, he says Discovery feels comfortable operating in a market where it has been present since 1989.
“We’ve been successful there with our portfolio and we love a lot of the dynamics of the market, in terms of the penetration of paid television, the stability of the economies, the mix of currencies there,” Hollinger offers.
“We always said that if there were great assets that came up in the Nordic markets then we felt it would be one of those markets where we could invest very safely.”
Given that the SBS deal is still pending regulatory review, Hollinger is reticent to discuss whether some or all of the SBS nets will rebrand as Discovery titles. “Generally speaking, you can look at our brand portfolio around the world and where we have something that’s worked, we don’t tend to mess with it,” he says.
“Where we have something that hasn’t worked, we’ve obviously been flexible about changing things. But obviously it’s a very successful portfolio there.”
However, he offers that while TLC is already “very successful” in the Nordics, “if there is one area that we see where we can continue to grow, it would be to get broader distribution in Sweden for it.”
He also assures that DNI is not going to deliberately pull shows made by rivals, such as A+E or Nat Geo, that air on the SBS channels. “Generally speaking it would be fine with us for good shows from all sources to be airing on our networks,” he says.
On the production side of things, one area not likely to be on the cards – for now at least – will be having Discovery’s in-house production arm, Discovery Studios, move into general entertainment or sports.
“The comfort that we have in moving into spaces which we traditionally have not programmed – like general entertainment and sports – comes from getting access in both of these deals to highly experienced and very talented management teams,” says Hollinger. “What we would have a challenge with would be launching these types of networks from scratch. In Latin America we did have a general entertainment channel called Liv and we struggled with it, frankly. It has been converted into ID now.
“The beauty of these deals is that we have people who have been doing this for years, have great content relationships, and know what they’re doing,” he adds. “That’s really given us the comfort to get into a broader set of genres.”
- This interview originally appeared in the January/February 2013 edition of realscreen magazine. Not a subscriber? Click here for more information.