Exclusive Interview: John Hendricks

PREMIUM: John Hendricks, the founder and chairman of Discovery Communications, talks to World Screen about making a big strategic move into programming for tablet devices, and continuing to leverage the company’s international self-syndicated network to invest significantly in original content across all platforms.

WS: What is Discovery’s philosophy for extending the viewing experience onto other devices?
HENDRICKS: If you think about our business at Discovery as fundamentally helping people satisfy their curiosity, we want to do that in all forms of visual media. Television is certainly our first target, but we know that people are able to access video on demand on their personal viewing devices, whether it’s their new iPad or their PC, and we want to be there with our content. There’s certainly going to be competition to the iPad, from Samsung and Motorola, and all the others that are coming out with tablet devices. And these are devices that uniquely mix text, video, audio resources, interactive resources, so we’ll be making a big strategic move into programming for the tablet devices.

WS: In our first interview with you, back in 1999, you talked about the importance of securing shelf space in the cable universe. How do you apply that concept in the digital world?
HENDRICKS: Shelf space is critical, so any new platform that materializes and makes it more cost-efficient to be able to break apart your large category into sub-niches [offers potential]. That’s always a good rule of thumb—to try to anticipate the platform that will allow you to subdivide your program offering. That’s what we did when digital started. We realized that in the spectrum that used to take six MHz to deliver one channel, that same six MHz through digital compression can deliver eight channels.
First, you have to anticipate that that’s going to happen. Then you have to develop the content and try to be first to secure that shelf space, because there’s a huge advantage if you are first in a large category, like sports. ESPN was first in that category and had a huge advantage going forward. We were first in that large nonfiction-documentary [category] and had a huge advantage. That’s why as we started to break up the category of nonfiction, we knew that if we didn’t create a science channel, somebody else would. Strategically you need to anticipate what shelf-space opportunities will be created by technology advances, then you have to decide what content can ride on that.

In the digital world, as we take that digital content on to the Internet and the new tablet devices, we can go down to very, very specific needs and curiosities. There may be someplace in America where someone is asking, “How did they build the Panama Canal?” Well, we have a wonderful one-hour documentary on the building of the Panama Canal, and that’s why we want to have it reside on a file server for people who can go to a menu that carries the Discovery brand and be able to access not only episodes of their favorite shows that they may have missed on the linear stream of a channel of ours, but be able to dive into a 30,000-hour library of Discovery content that we’ve built over the years and really be able to satisfy a burning curiosity of a moment. Whether that’s history or the space shuttle or sharks, we have a wealth of content that we can digitize and put online for the convenience of our viewers and consumers.

WS: As those platforms continue to multiply, is it difficult to continue to find content to “feed the beast”?
HENDRICKS: No. We have the whole world as our stage. There are so many interesting things that are happening and that have happened in the past, that we can identify the topics and craft wonderful stories.

We have another advantage. We created over the years this international self-syndicated network so that we can plow $500,000 per hour to $1 million per hour quite readily behind a topic. That’s very difficult if you’re in one market, with one channel in Germany or South Korea. If you look at the economics of those markets, what do they allow you to produce per hour? What is your per-hour investment limit? In many of these markets, you might do the math and it’s only $62,000. But with all of our networks internationally, we’re able to use the world’s economics to put together a very powerful production engine that’s fueled by the world’s resources. That gives us an advantage in the marketplace. We’re investing more and more in content as each year goes by and we’ve got this engine now, this self-syndicated network, that we’re very pleased about.

WS: Discovery was one of the first companies to launch internationally. Are those businesses still very important today, and do you see considerable growth in international markets?
HENDRICKS: Yes, absolutely. International for us is key, and we’re so glad we took that gamble back in the late ’80s and early ’90s to first launch in Europe and then to go worldwide. At the time, there were a lot of people who doubted the wisdom of that, but we were always convinced that multichannel television would just sweep the planet. We knew that in some instances it would be via cable, in other instances it would be via satellite direct to the home. But everywhere, whether in China, Korea, Austria, you name it, people would want their sports channel; they would want a Discovery-type service. So, we were fortunate to get there first and claim that shelf space.
We think the international marketplace is where the U.S. marketplace might have been ten years ago or even more. There’s so much penetration growth that’s going to happen over the next 10 to 15 years internationally, and we’re going to ride that wave with all of our services. So international is critical to us. I think it’s one of the defining advantages of Discovery Communications.

WS: How did the idea for the series Curiosity come about, and why is this project important to you?
HENDRICKS: When you think about our mission as a company, we’ve always tried to keep that mission carefully defined and separate from a particular delivery technology. For instance, we think a lot of people that were running the networks in the ’80s made a huge mistake by defining their business as being in the broadcasting business. They didn’t foresee cable. It might’ve been NBC that created an ESPN or CBS that…created a Discovery-type service. Defining your business for growth is very important, so we’ve defined ourselves as, “We’re in the business of satisfying curiosity.” I think that gives you a genetic advantage; in other words, it’s not a business that’s based on a fad, that’s here today and gone tomorrow. As a species, curiosity fuels our advancement. That’s why we invented the wheel, why we invented spacecraft. It keeps us going forward. If we appeal to that, then we’ve got a long-term business.

So I thought, Wouldn’t it be great if we had a weekly series that really spoke to the heart of the Discovery mission? That was the genesis of the Curiosity idea, that we would have a long-term franchise, branded Curiosity, that people could rely on week after week that would be a permanent fixture on a Sunday night, the way that 60 Minutes is a permanent fixture on CBS on Sunday night. Viewers come to expect that 60 Minutes is going to bring them two or three great stories about what’s happening in the world. That’s what we want to do with Curiosity.

This will be a series that will appeal to young people as well as people who are lifelong learners. It will debut late next summer. Our initial planning is for 60 episodes, so it’s a big production agenda. It will be our largest programming investment, exceeding that even of Planet Earth as well as Life. Each episode will be based on trying to answer some big question: Are we alone in the universe? Or, why is cancer so desperately hard to cure? We’ve been huddling with major universities across the country, ranging from Princeton, the University of Maryland, Cornell, getting some of the top experts to first identify the huge questions and then come up with the best answers that we can provide at this time. So that’ll be the promise of the series. You’ll see promos during the week that will say, “Coming up on Sunday night, Curiosity addresses a certain question.” We have a lot of hopes for the series.

WS: Is it important to take scientific topics and make them more accessible to the general public, especially children?
HENDRICKS: Absolutely. Especially as kids start their teenage years, there’s a magic time like in middle school, where if kids have an interest and they’re very curious, you really want to intrigue them at that moment to consider exploring science, technology or medicine. We’ve had a number of projects through the years that address education in the classroom, and Discovery Streaming is now a service that’s in more than half of the nation’s classrooms. It’s a tool that the teachers can use to really excite kids, especially students in the seventh, eighth or ninth grade.

With the Science Channel, we want to excite parents as well as their kids about these scientific topics. It’s getting kids at the seventh, eighth and ninth grade to be excited about science. Michio Kaku, one of our scientists working on Discovery specials, talks about making sure that schools don’t destroy curiosity by focusing on memorization of facts, rather than on these huge questions like are we alone in the universe. It may be a question like that that will get a kid excited about astronomy, for example. That’s what we’re going to try to do through Curiosity—have dimensions of curiosity that are for adults who are just lifelong learners, as well as packages for the classroom and for kids in their leisure time, so they can enjoy it on their tablet devices or PCs or their laptops on weekends or at night.