Discovery rethinks global set up

Zaslav pushes to improve margins

LONDON — After a busy year stamping his mark on Discovery’s domestic operations, president and CEO David Zaslav is turning his attention to the international business, with a major push to improve margins.

Speaking at the UBS global media conference in New York Tuesday, Zaslav highlighted Discovery’s international platform as one of its greatest strengths, but added that the business has “very weak margins.”

In particular, Zaslav said he was shocked to find that the domestic and international businesses were being run separately when he joined the factual giant from NBC Universal almost a year ago.

“That was a shock to me,” he told analysts. “In the old world we had almost no sharing of content. This year we’ve started to share the content.”

Going forward, Zaslav is pushing Discovery’s international channels to make more use of the company’s U.S. program library, and cut back on original productions.

“When I went to the U.K. and Germany a couple of weeks ago, I was talking about changing the way we do business,” he said.

In Germany, for example, he was surprised by the amount of original programming and marketing being produced by the local Animal Planet team, given that the market has only 1.5 million pay TV homes.

“It’s not a thoughtful way to approach Animal Planet. The thoughtful way is to say how much local programming do we need to be meaningful, and how much shared content and marketing can we do and be compelling.”

At the same time, Discovery is also investing in local ad sales teams as it looks to grow its revenues from the international market.

“The pan-European advertising market just hasn’t developed in a meaningful way,” said Zaslav. “But our local sales are very strong, so we’re going into these markets with local feeds, and we’re putting local boots on the ground.”

Already Discovery has local feeds in U.K. and Germany, with Russia the next market on the list.

As for further channel launches, Zaslav was bullish on the potential for Planet Green, which launches in the U.S. next year, as well as the Science Channel, which is currently undergoing a rebrand.

“It may be that Planet Green becomes a worldwide channel, it may be that Science becomes much more important around the world,” he said.

Discovery currently has channels in 173 countries around the world, and operates between two and nine channels in each market.

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