For a global media powerhouse, IP ownership is everything.
David Zaslav, president and CEO of Discovery Communications, stressed that point repeatedly during his keynote interview at MIPCOM on Wednesday (October 18), conducted by fellow media magnate Jon Feltheimer of Lionsgate, and in a media round table following the session.
With a potentially game-changing acquisition of another major cable player, Scripps Networks Interactive, expected to be finalized at some point next year, Zaslav emphasized that “our vision of the future is owning global IP,” in order to maximize opportunities not only in the linear space, but via the emerging platforms that are increasingly hungry for content, and increasingly aggressive in obtaining it.
“We believe that as these platforms get bigger, owning the content and being able to sell it up the chain will be of great value,” he told the assembled audience during the keynote interview, held in conjunction with Zaslav’s recognition as “Media Personality of the Year” by the Cannes-based market.
“Platforms are pipe companies, and more and more they need something that differentiates them,” he added.
The Scripps acquisition, once it is finalized, could see the combined companies spend between $3.5 billion to $4 billion on content, said Zaslav. But that content will have to be fully owned, which will make the post-merger company the largest global IP company in the world, next to Disney.
It will also need to be carefully curated, and directed to the “superfans” that drive each brand under the Discovery and Scripps network umbrellas.
The pursuit of those superfans has prompted the move into the sports arena for the global media giant, with the purchase of Eurosport and European Olympic broadcast and multi-platform rights from 2018-2024. Zaslav said such plays could turn Discovery into “a very compelling ‘sports Netflix.’”
It’s all part of finding the right mix of content for global audiences that “people will pay for before they pay for dinner,” said Zaslav. And from there, it’s the not so small matter of getting it to the largest audience via as many screens and platforms as possible. It’s a code, said Zaslav, that hasn’t been cracked yet.
“We have to figure out how to do it, otherwise some disrupter that’s not in this room is going to figure it out, and we’re going to be the old guys.”
But figuring it out will take trial, perhaps a little error, and major investment, both in content and myriad distribution strategies, including direct to consumer.
“Most media companies are cutting costs, cutting investment in content, dropping money down to EBITDA, taking the multiple on that… and some of those companies are for sale. They’re looking to get the most value today for the near term,” he said during the media round table. “Then there’s a few media companies that are saying, ‘We’re going to do the opposite.’
“We’re going to spend four to five hundred million dollars more in IP, we’re going to spend more money in building our direct-to-consumer business… Our focus is, what do we look like three to five years from now, and as people are consuming more content on more devices, what do we have to nourish those audiences so that we can be a long-term, sustainable, high growth, global IP company?
“I think the real question is: are we right? And if we are right, there’s going to be huge value creation in our company.”
While Discovery has made major moves in the sports media world in Europe, Zaslav was also keen to expound upon the need for sports-free skinny bundling of cable nets in the U.S.
“The distributors themselves are coming to the conclusion that we’ve got a hole in the market, and we’ve got to have a skinny bundle… it’ll happen because consumers want it.
“I believe it’s going to change very quickly,” he summed up. “You’re going to see, within the next few months, multiple skinny bundle offerings both over the top and on linear, and we will be the primary players in that.”