×
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

  • Alan Horn Bill Tanner

    Alan Horn to Keynote Variety Business Managers Elite Breakfast, Bill Tanner to Be Honored

    Bill Tanner will be recognized with Variety’s 2019 Business Managers Elite Award at the annual Business Managers Elite Breakfast presented by City National Bank, which takes place in Beverly Hills on Nov. 13. Co-chairman and chief creative officer of The Walt Disney Studios Alan Horn will be the keynote speaker in conversation with Variety editor-in-chief, [...]

  • Smoke haze covers the Sydney Harbour

    Australia's Seven West to Merge With Affiliate Prime Media

    Australia’s Seven West Media has agreed a deal to acquire regional broadcast group Prime Media. The move is a further step in the consolidation of Australia’s traditional media industry. The two companies announced on Friday that Seven will make the acquisition entirely through the issue of new shares to the owners of Prime. Both companies [...]

  • Ron Meyer

    Ron Meyer Files $10 Million Suit Over Forged Rothko

    NBCUniversal Vice Chairman Ron Meyer has filed a $10 million suit against two art dealers, claiming they sold him a forged Mark Rothko painting in 2001. Meyer accuses Susan Seidel and Jaime Frankfort of duping him into buying the work. According to the suit, he was told that it would be included in an official [...]

  • Former movie producer Harvey Weinstein (L)

    Harvey Weinstein Seeks to Call Expert on 'Recovered' Memories at Rape Trial

    Harvey Weinstein’s attorneys are seeking to call an expert on “recovered memories” at his trial on rape and sexual assault charges. The defense has filed a motion asking to call Deborah Davis, a psychologist and professor at the University of Nevada at Reno. Davis is a frequent defense witness. She co-authored an article in 2006 [...]

  • Tekashi 6ix9ine Docuseries Coming From Showtime

    Tekashi 6ix9ine Docuseries Coming From Showtime and Rolling Stone

    Showtime Documentary Films today announced a new limited docuseries profiling controversial rapper Tekashi 6ix9ine. Titled “SuperVillain” and inspired by the Rolling Stone feature written by Stephen Witt, the three-part series will trace how a New York City deli clerk named Daniel Hernandez became superstar rapper Tekashi 6ix9ine — who racked up 2.6 billion streams and [...]

  • Fader Label Logo

    Fader Label Signs Two New Acts, Boosts Staff

    The Fader Label, home to Clairo, Matt and Kim and others, announced two new signings today along with three new hires on its staff. Charlie Burg and Zachary Knowles have joined the label’s talent roster, while Carson Oberg has come aboard as general manager, Yasmine Panah as project manager and Josh Hymowitz as label coordinator. They [...]

More From Our Brands

Access exclusive content