Discovery 30th Anniversary: CEO Talks Global Growth, Brand ‘Course Correction’

Discovery Channel was born 30 years ago today, the brainchild of entrepreneur and nature documentary enthusiast John Hendricks.

The channel was an early driver of cable TV subscriptions, and it was a pioneer in moving beyond U.S. borders with a global expansion strategy that began in the 1990s, long before its major competitors. David Zaslav, president-CEO of Silver Springs, Md.-based Discovery Communications since early 2007, spoke about the cornerstone of the company that has grown to 13 U.S. channels and a market cap of $20 billion.

What is your first memory of Discovery? You were a cable exec at NBC for nearly 20 years before joining the company.

My first hands-on memory of Discovery was going to Bethesda as a young lawyer. I was working for (the law firm) LeBoeuf and Lamb, and we represented Discovery. I remember going into a conference room and having John Hendricks stand up and talk about the values that Discovery stands for: to educate, to do quality programming and entertainment, to invest in great creative people and to innovate on the screen with a big brand that is about adventure and exploration. I left that meeting and went home said to my wife ‘I want to be in the cable business.’ It was John’s passion about the Discovery brand. The idea of satisfying curiosity on TV and ambition of what cable could be. It was quite inspiring and energizing. It was a big moment for me as a 25-year-old lawyer who was tooling away at a law firm and not loving going to work every. Going into that conference room was almost like walking into sunshine — look at this group, look how excited they are. John was on a mission to change the way people thought about television.

How important was Discovery to driving the early growth of cable subscriptions?

In those early years the Discovery brand really represented a lot of the ambition of the cable industry. You had Ted Turner who was about news in a breakthrough way, taking it people 24 hours a day. You had MTV that was really driving the idea of using the TV to drive culture and music and fashion. And you had Discovery that was ambitious about elevating television to satisfy curiosity with quality programing. Looking back it was that 1-2-3 combo that became the recipe for what cable could be.

Thirty years later, you’ve gone from the garage to a global business.

It’s an extraordinary thing. Discovery is in 230 countries, more carriage as a cable channel by far than any other channel in the world. In almost every country it’s the No. 1 channel for men. That mission of satisfying curiosity has been translated into 52 languages reaching over 700 million people around the world … There are a lot of other channels that are a little cooler, a little hipper, riding a little more in the trend area. Discovery is going to back to what we really care about as human beings: exploration, adventure, what the world holds for us in science, space and natural history.

But is that a burden in terms of programming options? Discovery’s reality programming is held to a higher standard than your competitors.

I wouldn’t say it’s a burden. When we shoot we have to wait for the action to happen. Most of television is about manufacturing the action. Sometimes when we do a “Planet Earth” (docu) it takes five years — you can’t make it happen. We need as much as we can to be authentic. “Shark Week” this year is really “Shark Week” for purists. We’re really driving hard this year on the sciences. We’ve got 24 marine biologists and oceanographers working with us to amp up for the core science data. One of our big takeaways is when somebody watches a Discovery show at some point we want them to say ‘I didn’t know that.’ We tried really hard this year to have in every hour of “Shark Week” a moment where a 15-year-old kid will turn to his dad and say ‘I didn’t know that.’

Is that a response to harsh criticism about the veracity of some of your documentary programming, including “Shark Week” offerings for the past few years? Some say Discovery has veered far past its stated mission.

We’ve made a hard drive back to the brand over the past couple of years. We’ve really focused on what Discovery is at it’s best. We got rid of some programming that was off brand. … There was a time when you could tune in on a Tuesday night and see a group of guys with beards and pigs and cows running through a kitchen. We’re not doing that anymore. We’re getting back to exploration, adventure, survival, natural history. It’s a course correction that has us doing what we do best.

What led you astray?

We experimented on the edges. We’ll continue to do it with some projects. What really started the non-fiction series on Discovery was “Deadliest Catch.” This was a show about guys who went out to the Bering Sea to work as fishermen. If they fell in, within 90 seconds they were dead. That was the beginning of the non-fiction revolution for Discovery. These were extraordinary people with compelling lives. But then it started to spread to spread across a number of networks and non-fiction became more prurient and more aggressive. We as an industry got more extreme with the programming. … Somewhere around a year ago we started talking to our audience who was telling us that they like more of the stuff that’s core to the basics of Discovery. The audience is telling us they’ve seen enough already.

(Zaslav declined to comment on the revelation of molestation incidents among members of the Duggar family featured on docu-series “19 Kids and Counting,” which has been pulled from Discovery sibling channel TLC.)

What drove the company’s focus on international expansion? Discovery was far ahead of its larger competitors in the land rush for overseas channels.

It was four men on a mission that really drove this business around the world. John Hendricks who risked everything, borrowed money, used his credit cards to start Discovery out of his garage. Almost every cable channel at the time was launched by a cable operator looking to drive distribution. John had the audaciousness and the confidence and the ambition to do it. And then it was the backing he got from John Malone, then of TCI; Bob Miron of (Advance/Newhouse Communications and now chairman of Discovery Communications), and Jim Robbins of Cox Cable. Those four guys dreamed big and all had the same mission of not just about making money but having an impact, not just here in the U.S. but around the world. … For the first 20 years neither of those four groups took one dollar in profits out of Discovery — none of them. It was all reinvested in the company. There were a number of other investors who didn’t believe in the international expansion and they did cash out. But those four believed and they kept putting all the chips on the table. All the profits were used to take (Discovery) outside the U.S.

Was that a risky move in markets where there wasn’t much of a pay TV infrastructure at the time?

Those channels lost money for many, many years but the vision was that these channels and stories are universal. In the late 1990s through the 2002-2004 period Discovery was losing money in almost every country in the world. But look at the last five years we’re not losing money anywhere and we’ve got double-digit growth in virtually every country. They had the courage to stay the course and now we’re seeing the huge benefit. Now in these (countries) where they have about 60 cable channels, we have 12 of them. … We’ve invested $5 billion in Western Europe during the past five years.

Is it fair to say your biggest growth opportunities are now outside the U.S.?

Our biggest opportunity is we still have a lot of channels around the world that we can make better. We have some other genres we can do. We have brought a lot of big free-to-air channels in Europe, we’re the equivalent of NBC or ABC in a lot of European countries. We have the chance to take our content to the next level and become one of the biggest media companies in the world. You’ve invested a lot recently in sports and digital ventures — is that the future? We’re focused on how good is our content on apps and phones. If we woke up 6-7 years from now, how strong would our content be when somebody looks at their phone and decides what they want to watch. With Eurosport we launched a direct-to-consumer app throughout Europe. We’ve got almost 300,000 subscribers paying us $8 a month. With the French Open, subscribers could watch what they wanted on any one of 15 channels. We’re buying more kids programming. We bought All3Media to enhance our production business.

What have you learned about how viewing habits are changing from being active in so many countries?

We’re driving on two fronts right now — the traditional business of growing our linear and broadcast platforms around the world. We also need to look over the horizon and start to populate our company with content that has significant value over a long time. We’re paying particular attention to phones and devices so that our market share will continue to grow even as the audiences transitions in the way they view content. That’s a journey that is happening a lot faster in the U.S. We’re still seeing a lot of traditional growth around the world. So we’re learning from what’s going on here how to position ourselves. And we’re glad that more than half our business comes from outside the U.S.

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