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Discovery CEO David Zaslav Teases Direct-to-Consumer Future

With his company’s acquisition of Scripps Networks complete, Discovery Communications CEO David Zaslav is eyeing a streaming future.

“We believe that there’s lots of opportunity to look at scripted content, scripted movies,” Zaslav said Thursday at the Television Critics Association’s summer press tour. “That area of everything else in quality content, whether it’s Oprah, science, home, food, cars, that’s going to continue to grow, and eventually we’re going to go direct to consumer with some or all of that.”

Zaslav, flanked by top executives from his company’s now vast post-Scripps-deal portfolio of unscripted-focused cable channels — Nancy Daniels, Kathleen Finch, and Susanna Dinnage — framed Discovery’s position in the entertainment media business as a counter to the crowded field of companies competing for eyeballs through scripted entertainment programming. He pointed to mogul Rupert Murdoch’s decision to sell the bulk of 21st Century Fox’s entertainment properties to the Walt Disney Co. as an example of the state of the industry.

“When you get one of the great leaders of our industry, Rupert Murdoch, saying he’s going to sell 21st Century, at first we were surprised, but then we said with the competition from Amazon, Apple, Netflix, the competitive nature of that side of the business has really changed,” Zaslav said. “The amount of scripted content has changed. The amount of dollars going against movies has changed. We really see the media business as being two sides. One side is scripted series and movies, and we’ve moved away from that.”

In March, Discovery closed its $14.6 billion acquisition of Scripps, bringing a group of channels that includes Food Network, HGTV, and Travel Channel into a portfolio that already included Discovery Channel, TLC, and Investigation Discovery. In the U.S. and abroad, Zaslav said, the company is now well positioned as MVPDs begin offering smaller bundles of channel — with fewer slots for media companies to compete over.

“There’s skinny bundles almost everywhere in the world, and we’ve done quite well,” Zaslav said. “We might have 12 channels, but there will be a skinny bundle with only 30 channels, and we’ll have eight of them.”

But long-term, the company’s path may lead around the MVPDs with a streaming offering sold straight to consumers.

“We’re doing a little right now, but we think an offering of all of our content for six, seven, eight dollars, would look very different to consumers everywhere in the world who love and know our brands,” Zaslav said. Consumers, he added will have roughly eight options for streaming services priced at $10-15 a month and specializing in scripted series and films. A Discovery would stand out with its unscripted focus and lower subscription price.

Zaslav said that Discovery has already begun to pivot toward digital though products such as its authenticated app Discovery Go. But, he added, Discovery may seek a partner for a bigger play down the road. “We are looking to go direct to consumer, either ourselves or with others domestically and around the world,” he said. “You know, if one of the FANG companies said ‘I want to be in business with a global company where I can make a broad offering everywhere in the world in every language, who could I talk to?’ It would be Discovery or Disney.”

Zaslav also talked about integrating the Scripps brands into Discovery.

“One of the things that we’re having a lot of fun with is not just that we’re aggregating 22, 25 percent of the audience of women in America on any particular night, but that we can promote between all the networks,” he said. “With the broad reach that we have now, we have the ability day and date to tell people on HGTV and Food and ID that something great is going on TLC. So we’re kind of just growing into our new sets of assets, but we’re working together really well.”

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