NEW ORLEANS — Top officials of Discovery Comunications, gathered here at the National Cable Assn.’s annual confab, are brimming with enthusiasm over an imminent announcement of a $500 million joint venture with the BBC that would launch three new networks around the world and an entertainment cable channel in the U.S.
The proposed partnership, rumored to be in trouble after first coming to light last fall in a memo of understanding between Discovery and the BBC, got a jolt of energy from the announcement Monday of the BBC Worldwide and Flextech joint venture to create eight new pay-TV channels in the U.K. (Daily Variety, March 18).
The two deals are linked by the fact that the 51% owner of Flextech is John Malone’s Tele-Communications Inc., the largest cable operator in the U.S. with more than 16 million subscribers — and TCI, through its Liberty Media subsidiary, also owns a 49% stake in Discovery.
But Discovery sources say that Malone had no hand in orchestrating the Discovery-BBC arrangement, which will run for five years.
John Hendricks, chairman and CEO of Discovery Communications, declined to predict exactly when the deal will be signed. But he said that in addition to creating new networks around the world, the joint venture will give Discovery Channel, the Learning Channel, Animal Planet and four other digital cable networks in the U.S. a direct pipeline to the thousands of hours of documentary, nature and science programming that reside in the BBC’s vaults, the biggest library of its kind in the world.
But the key component of the Discovery/BBC partnership, says Greg Moyer, president and chief editorial and creative officer of Discovery Communications, will be “three global branded networks.” The first will be a worldwide version of Discovery’s Animal Planet, which focuses on nature films aimed at kids and which has corralled about 20 million subscribers after only six months of operation in the U.S.
At first, the BBC and Discovery will funnel their already existing libraries to these three proposed channels, but once the three start chalking up revenues, “the joint venture will commission lots of new programming,” not only for the worldwide channels but for the seven channels in the U.S., Moyer says.
The most controversial new channel to be set in motion by the deal will be the tentatively named BBC America, which could kick off as early as this summer. Moyer says BBC America will consist of BBC-produced dramatic series, TV movies, miniseries, sitcoms and arts programming.
Network sources says that instead of being half-owner of this channel with the BBC, Discovery will negotiate a management fee for the use of its affiliate-sales and advertising-sales departments.
Not everyone was as enthusiastic. “My question is: Will the American consumer buy a 24-hour channel made up of British programming?” asks Nick Davatzes, president and CEO of A&E and the History Channel. Davatzes has a vested interest in what the BBC does because A&E’s long-standing output deal with the BBC for dramas, sitcoms and other entertainment programming runs out in the middle of next year.
Davatzes said he’s already begun planning for the loss of the BBC contract by entering into more deals with other British production houses .