×
You will be redirected back to your article in seconds

Global Ambition Brings Discovery Fresh Script

Scandinavian investments are experiment for U.S. cabler

LONDON — While Europe continues to grapple with the fallout from the economic crisis, one of the U.S.’ best known cable networks is putting the finishing touches on a Continental spending spree that’s part of a plan to develop a companywide footprint beyond its longtime niche.

In December, Discovery Networks Intl. made its biggest ever acquisition, scooping up Nordic broadcaster SBS in a deal that covers 12 channels across Norway, Sweden, Denmark and Finland.

For Discovery, a network better known for sharks than sitcoms, the Scandinavian investment represents an experiment of sorts, because for the first time, its channels will be broadcasting general entertainment and scripted fare.

Discovery Networks Intl. president and CEO Mark Hollinger says Discovery’s international infrastructure has reached the point where it can support a broad number of channels.

“Do you simply populate (these additional networks) with factual channels, or can you use that platform for other types of networks?” is one of the questions Hollinger says Discovery has been asking itself.

As if to answer, at the same time as the SBS buy, DNI announced the $222 million purchase of 20% of specialty web Eurosport from French broadcaster TFI, with an option to buy a majority of the sports provider in two years. DNI also added four French pay TV channels: TV Breizh, Histoire, Ushuaia TV and Stylia.

A similar scenario played out in Italy in January, when Discovery bought Italian broadcaster Switchover Media for an undisclosed sum. The move made DNI the third-biggest broadcaster in Italy, after RAI and Mediaset. Discovery now owns six pay and six free-to-air channels in Italy.

“We’ve looked at a ton of assets, but in most cases we just couldn’t get to the finish line,” Discovery CEO David Zaslav says. “With these deals, the aim is to accelerate our already fast pace of international growth.”

When Zaslav joined the Silver Spring, Md.-based company six and a half years ago, Discovery’s international activities generated profits of $159 million. By 2011, that number had more than quadrupled, to $721 million.

Discovery has found international success by concentrating on market share.

With growth in pay TV across Europe relatively flat, it is offering premium content and adding free-to-air channels to existing pay portfolios in countries like Germany, Italy and Spain.

Hollinger, a Discovery veteran of 21 years, and his content chief, Luis Silberwasser, who recently re-located from Miami to London, are cagey about their plans to maximize value from the new assets.

“The SBS acquisition looks like a big change, but we feel it is the next iteration of growth for us,” Hollinger says. “We have a bigger palette to paint on.”

Outside the U.S., Discovery is morphing into an ambitious broadcaster that tailors different business models to local markets, and is reaching out beyond the factual space into entertainment and sports.

For instance, in most of its international markets, Discovery operates between six and 11 channels, playing on different demographic groups.

In France, the company owned just two channels, one of the reasons it acquired the four pay networks and tied-up with TFI. The initiative gives DNI the kind of dual revenue streams it likes — pay TV coin and potentially lucrative local ad revenues.

From a global perspective, the Eurosport stake offers, arguably, the best long-term growth prospects: The network concentrates on secondary sports like cycling rather than expensive marquee draws such as English Premier League soccer. It operates in 59 countries, with anywhere from one to four channels in each.

Ultimately the hope is that when the European economy finally revives, Discovery will be in pole position to benefit from the uptick, provided the cable net continues to grow its market share.

“We’ve been very successful in international TV,” Hollinger says, “but it’s important we are always alert to what other opportunities might exist. There is a real imperative to invest internationally.”

More Biz

  • Plume of black smoke rising from

    Attorney for Universal Music Artists Impacted by 2008 Fire Requests Inventory

    Following on its statements last week that it will be filing a lawsuit on behalf of several Universal Music recording artists impacted by a 2008 fire that destroyed a huge number of master recordings, a Los Angeles law firm has requested a “complete inventory” from the company. Addressed to UMG CEO and chairman Lucian Grainge, [...]

  • Charles Caldas To Step Down as

    Charles Caldas To Step Down as Merlin CEO

    Charles Caldas, the only CEO that the independent-label collective Merlin has ever known, announced today that he will step down from his post at the end of 2019, after more than 12 years at the helm of the global rights organization. He will continue his current duties until then and work with the Merlin board to [...]

  • Merlin Reports Record Distributions for 2019

    Merlin Reports Record Distributions for 2019

    Global indie-label collective Merlin reported record distributions in its 2019 membership report, paying $845 million to label and distributor members between April 2018 and March of this year. That figure, a 63% year-over-year increase, includes more than $130 million paid out this year from non-royalty income — and included in that figure is the estimated [...]

  • Dwyane Wade on Supporting His Son

    NBA Star Dwyane Wade on Supporting His Son's Attendance at Miami Pride

    NBA star Dwyane Wade spoke to Variety about why it was important for him to support his younger son attending a pride parade last spring. In April, Wade’s then 11-year-old son Zion posted pictures of himself at Miami Pride, with his siblings and stepmother Gabrielle Union. Wade, who was on the road with the Miami [...]

  • Songs for Screens Powered by Mac

    Songs for Screens: How Eric Church Teamed With Ram Trucks — and Five Tons of Vinyl — for ‘Solid’ Campaign

    Country star Eric Church has long used his new music to reward his loyal fans, from surprise releasing 2015’s “Mr. Misunderstood” album as a direct fan-club exclusive to impromptu meet-and-greets before his hometown show in Greensboro, North Carolina. So when Church was prepping the April vinyl release of 2018’s critically acclaimed “Desperate Man,” the singer [...]

  • Harvey Weinstein legal team

    Harvey Weinstein Loses Another Defense Lawyer

    Harvey Weinstein has lost another defense lawyer, just three months before he is set to go on trial for rape and sexual assault. Attorney Jose Baez told the judge overseeing the case that Weinstein had taken actions that made it difficult to represent him, according to a letter obtained by the New York Post. Baez [...]

  • https://pmcvariety.files.wordpress.com/2019/06/kindred_spirits_2019_v7.jpg

    Kindred Spirits Host Fundraiser for Child Refugees

    The Kids Entertainment Professionals for Young Refugees will host its third annual Kindred Spirits fundraising campaign this month on behalf of UNICEF and in coordination with World Refugee Day, which is Thursday. The grassroots, volunteer organization’s online fundraiser will take place from June 14-27, and 100% of every donation made will benefit UNICEF. “We call [...]

More From Our Brands

Access exclusive content