Discovery Communications’™ David Zaslav

Discovery Communications reaches some 3 billion cumulative subscribers in more than 220 countries and territories through more than 190 worldwide networks. Leading the pack of channels are Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science and the joint-venture network OWN: Oprah Winfrey Network. During the last few years, Discovery, once home to only nonfiction programming, has branched out into scripted fare, including Klondike for Discovery Channel and The Challenger Disaster on Science. Nonfiction content, however, remains the primary focus, with investments in such diverse shows as Planet Earth, Gold Rush and Skywire Live with Nik Wallenda, in which daredevil Wallenda crossed the Grand Canyon on a tightrope without a harness. The live broadcast attracted some 13 million viewers.

And speaking of viewers, as they wander through linear channels, video-on-demand offerings and streaming services in search of their favorite programming, Discovery wants to be sure it is placing its content on as many platforms as possible. As David Zaslav, the president and CEO of Discovery Communications, tells World Screen, strong brands, available on multiple platforms and fueled by appealing content, are among the keys to Discovery’s success.

WS: What have been some of Discovery Communications’ strongest brands, in the U.S. and internationally?
ZASLAV: It’s a great time to be in the content business, and particularly exciting because this year we’re celebrating the 30th anniversary of the launch of the company and the Discovery Channel. What began as one channel in the U.S. is now the most widely distributed network in the world with nearly 500 million subscribers across 220 countries. Fast-forward 30 years, and from that one network we’ve expanded to 53 distinct entertainment brands, including TLC, Animal Planet and Science.

So, it’s fantastic. Discovery Channel will always be our flagship, but we’ve also had great success rolling out many of these other strong brands globally and in the U.S., and we feel like we’re just getting started.

WS: What are some of the most popular newer brands?
ZASLAV: Our hottest new global brands without question are ID [Investigation Discovery] and Turbo [the international version of Velocity]. In 2014 in the U.S., ID had its highest [ratings] ever and is a top five cable network for women. Just last year the network passed the 100-million-home mark outside the U.S. Velocity in the U.S. continues to post double-digit ratings gains and added 5 million U.S. subscribers in the last year; it now reaches 61 million homes and continues its expansion march globally. Velocity—or Turbo as it is known internationally—is taking off, particularly in Latin America where we have invested and doubled the channel’s subscribers across the region. We are on track to reach more than 125 million homes with Turbo and Velocity by the end of 2015.

These are all fantastic examples of the themes we have found that have global appeal, and we are continuously looking at new markets to launch brands that nourish our audiences.

WS: This past year, the revenue growth of Discovery’s international businesses outpaced that of its U.S. business. What has been driving growth in your international businesses?
ZASLAV: Our global brand rollouts have driven the international business. We have an average of 10 channels in more than 220 countries around the world. But we also have local programming, brands, ad and affiliate sales in offices around the world. Our global brands, paired with our local content and sales teams—our “boots on the ground”—have fueled our incredible, organic, double-digit international growth story—a true differentiator for Discovery.

We have many strong markets in our portfolio. I’d say that Latin America has stood out, recently fueled by Discovery Channel, Discovery Kids and Discovery Home & Health, the number one female lifestyle networks in the region. Discovery Kids just had its sixth consecutive year as the number one pay-TV network in Brazil, and that’s not just among kids’ channels, that’s number one overall.

WS: Some, countries, particularly in Europe, are dealing with economic challenges. How do consumers view the value proposition of pay TV in Europe, even in difficult economic times?
ZASLAV: Years ago we made a decision to invest in Europe when many companies were slashing budgets or leaving. While it is certainly a mature market, we’ve been able to grow our market share and reach new audiences across Europe. We’ve strategically rolled out free-to-air channels, like Discovery Max in Spain and Real Time and DMAX in Italy, to gain market share and maximize ad dollars, and we now have successful “hybrid” businesses in several markets, with strong pay-TV and free-to-air channels.

Of course now that we own Eurosport, the premier sports entertainment provider across the continent, we’re using those rights on our platforms and bolstering Eurosport’s offering. [In 2014,] from May to the end of the year, we inked 24 rights deals—everything from soccer to alpine sports to handball—to expand Eurosport 2 locally and Eurosport, the pan-regional network. So while Europe has its challenges, we believe there are opportunities to reach new audiences and gain share.

WS: Are you looking to make acquisitions in the U.S. or internationally?
ZASLAV: Discovery has a strong organic growth story, so we don’t need to make acquisitions to continue growing. At the same time, we’re always looking at opportunities to build our scale  and deliver new offerings and content to viewers, advertisers and distributors.

We are also big believers in acquiring valuable IP rights and owning our content. In 2014, we made two strategic acquisitions on this front: U.K.-based Raw, creators of Discovery Channel’s number one hit series Gold Rush, and all3media, which owns 20 distinct production companies around the world. IP ownership not only expands our pipeline of content for our channels and distribution platforms around the globe, but also deepens our valuable IP holdings for use across future cross-platform offerings.

WS: What business areas still hold potential for growth in the U.S.? How do you envision growing market share?
ZASLAV: Our North Star is investing in content that drives our brands and programming forward. From Discovery Channel to Velocity, we are looking at how we can get viewers to spend more time with our content and how we can address white space in the market. What content will nourish them?
Discovery Channel is number one on Friday nights with Alaskan Bush People and Gold Rush. Also, 19 Kids and Counting and the new hit Our Little Family have made TLC the number one cable channel on Tuesday nights among women.

Beyond Discovery and TLC—our juggernauts—we’ve launched more new brands in the U.S. in the past few years than any other media company: ID, Velocity, Destination America, American Heroes Channel, Discovery Family, Discovery Life Channel and of course OWN: Oprah Winfrey Network, now the number one network for African-American women.

Audiences are responding to these networks’ stories and compelling characters, and by delivering great content across these brands we’ve been able to grow our audience share in the U.S. from 7 percent in 2008 to 12 percent today, even in a mature market.

WS: What do the appointments of Rich Ross and John Goldwyn say to the creative community about the programming direction Discovery Channel wants to follow?
ZASLAV: Rich Ross just started in January and is already making his mark. He’s a terrific creative leader who has already reinvigorated our flagship channel with fresh ideas and perspective. He has hired seasoned, accomplished executives for his leadership team to lead our big tentpole specials and event programming. [He also hired] John Goldwyn, a longtime producer who has developed many feature films and most recently Dexter, to oversee Discovery Channel’s scripted and miniseries strategy.

Rich and his team will be aggressive in developing both of these categories, with programs such as Racing Extinction, which debuted at Sundance and will be a global television event this fall with our reach into our nearly 500 million homes around the world. I think you will also see Rich build off of Discovery Channel’s current successes, such as Gold Rush and Alaskan Bush People, both of which are top five shows on cable, and launch a return to the roots of Discovery: exploration and igniting curiosity.

WS: With the media landscape changing so rapidly, what strategies does Discovery Communications have in place to drive growth and build new businesses and brands?
ZASLAV: Over the past 30 years, we’ve built our company through a consistent strategy: investing in our channels and programming in the U.S. and around the world. We’ve also invested in local teams and infrastructure to drive our global business, and we own our rights and IP across platforms.

We talked already about the networks we’ve launched that have terrific worldwide appeal but what’s distinct about us is that many of our channels have a local feel. If you wake up in Italy, you feel like Discovery Channel, TLC, Animal Planet or Science is a local channel, your channel. At the same time, there are genres that just travel well and have universal appeal, like crime with Investigation Discovery and cars with Velocity/Turbo. Our annual $2 billion content investment and a focus on programming to a global audience has driven us to nearly 3 billion cumulative subscribers in more than 220 countries, and our average international audience increased 10 percent last year.

Another real game-changer for us is Eurosport. In 2014 we took a controlling interest in Eurosport and I get more excited about this brand and platform every day. That acquisition is expanding our reach and ability to attract new audiences, as well as diversifying our content portfolio. Lastly, we own all of our IP and programming. That presents a lot of possibilities and options with the growth of new digital platforms.

WS: What type of programming does it take to stand out in today’s crowded nonfiction programming genre?
ZASLAV: It starts, begins and ends with a laser focus on quality storytelling across our global portfolio. We are constantly talking to our audiences about how they want to be nourished by our content and brands. And it’s also about the superfan. We have superfans that are devoted to our brands and shows. On ID, we have “ID Addicts”—that’s what they call themselves—that have driven the network to be number one in length of tune-in of all the networks in the U.S.

So finding strong niches of content and developing shows with great stories to nourish those audiences is crucial. Secondly, I think it’s important to take some risks and big swings. For 30 years, we haven’t been afraid to create TV that no one else has done. That has served us incredibly well and our talented creatives are encouraged to develop programming that stands out in a crowded landscape.

WS: Given consumers’ continued penchant for watching programming on demand, what is your view of the future of the linear channel business?
ZASLAV: In the U.S., we’ve recently struck deals with Sony for its new PlayStation Vue platform, as well as renewals with all of our traditional distributors. Those deals all recognized the full value of our content so we think the prospects across traditional linear distributors, plus the new market entrants like Sony, are good in the near-term.

So we believe that investing in and developing the best content will fuel viewership regardless of platform and that owning that programming and IP positions us well for a longer-term future across multiple viewing devices.

WS: And how is Discovery positioned to play in both arenas, so to speak, on linear channels and nonlinear digital platforms?
ZASLAV: We are the world’s number one pay-TV programmer. Our reach on traditional systems across the globe is unmatched. We have an incredible distribution advantage. In terms of digital viewing, all of the U.S. [carriage] renewals in 2014 offer subscribers authenticated access to Discovery content inside and outside the home. So that’s a strong start to building a robust U.S. TV Everywhere offering—and another element of our strategy of capturing a growing share of the streaming audience.

As for linear, owning all of our IP is a huge advantage as digital viewing becomes a bigger piece of the pie. In Europe we’ve gained valuable insights on our own direct-to-consumer products with Dplay in the Nordics and the Eurosport Player across Europe. While we are relatively new to over-the-top offerings, I’m excited about our near- and long-term growth in this area. Those platforms already have nearly 250,000 subscribers paying $8 a month and offer fantastic learnings that we can apply in the US. and other markets in the future.