Discovery Special Report MIPTV 2014

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By Mansha Daswani In 1989, well ahead of most of its competitors, Discovery Communications firmly secured a foothold in the still nascent pay-TV business in Europe, launching the first international feeds of the Discovery Channel in the U.K. and Scandinavia. In the last 25 years, Discovery Networks International (DNI) has expanded across the globe, with its portfolio of networks now reaching more than 1.6 billion cumulative subscribers in 220-plus territories. A 20-year Discovery veteran, Mark Hollinger, the president and CEO of DNI, has been a key player in much of this rapid expansion. Ahead of stepping down this June, Hollinger looks back on helping to build Discovery into the world’s number one nonfiction media company.

MARK HOLLINGER WS: What have been some of DNI’s major milestones?

HOLLINGER: There are two things that were very impor-

WS: Tell me about the strategy in Western Europe.

HOLLINGER: What we saw in Western Europe were

tant that happened right around the time that I joined.

One was that we bought TLC in the U.S., so we went from being a one-channel business to a two-channel business, and we grew from there. Having such a substantial U.S. portfolio and content engine has been critical to the growth of DNI.The other was that we took control of the business in Europe. When we launched in ’89 we were only a 30-percent owner. A TCI-owned company, one of our shareholders at the time, owned 70 percent and operated the business for us. But in 1991 we were able to buy back their stake and own 100 percent of the business.

Taking control of our fate internationally early on was critical.The next step would have been in 1994, when we made the decision to make a big push into Latin America and Asia. Being out as early as we were has been one of the key foundations for the business. The fact that we have now expanded into other genres in terms of general entertainment and sports, and into other business models in terms of free-to-air in certain parts, has been the next big milestone for the international business.

enormously powerful economies, big ad-sales markets and pay TV being challenged in terms of growth by the launch of digital terrestrial platforms. [In select markets] we now have a free-to-air business, which has been a very nice balance to the pay-TV business in those markets. In Italy, for example, we have a nicely balanced portfolio with six pay-TV channels and six free-to-air channels, and we have the third biggest audience share in the market. In the Nordics, the great thing about the SBS asset is, we look at them not as broadcast networks but really as big dual-revenue paytelevision networks. The fact that [SBS Nordic] was a solid, dual-revenue stream business in very good markets with good leadership [meant that the acquisition] was a good way to get to some real scale and to understand the world of general entertainment and sports.

Eurosport is also a dual-revenue stream business in these markets where broadband penetration is growing. For the long term, what’s the impact of various SVOD, OTT services on broadband going to be? What can you do to make sure that you have must-have content in your pay-TV portfolio? Certainly one category of must-have live content in every market around the world is sports. Eurosport was this great asset with terrific distribution, and from a demographic perspective a great complement to the male-oriented channels we have in the portfolio. They have found a great position for themselves with a broad array of middle-tier sports.

WS: Of all the developments in pay TV, what was most transformational for Discovery’s business?

HOLLINGER: The organic growth of pay TV has been [the single most important] thing for us. The advent of digital technology...means we can launch more channels into an environment, more HD channels and VOD content.We have the biggest portfolio of HD channels of any program provider in the world.

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By Mansha Daswani As the incoming president of DNI, Jean-Briac (JB) Perrette is taking on oversight of a diverse mix of 46 brands, pay and free, outside of the U.S., heading up a team of regional leaders in Western Europe; Central and Eastern Europe, Middle East and Africa; the Nordics; Latin America and the U.S. Hispanic market; and Asia Pacific. Perrette is not new to Discovery, having served as chief digital officer since 2011 following more than a decade at NBCUniversal. He talks to World Screen about landing his dream job and the strength of DNI as it marks its 25th anniversary.

WS: What do you think your successful background in running Discovery’s digital businesses brings to your new role?

PERRETTE: The world has known digital for the last 10 to 15 years as something that was somehow apart, separate from our traditional businesses. But as we all know, increasingly every day, our consumers, who ulti-

JB PERRETTE mately are the focal point of our business, don’t view the world as traditional versus non-traditional or digital versus traditional. They just view it as their media experiences, on whatever screen, on whatever platform, in whatever way. If you look at the next three, five, ten years of where this business is going to go, it is about delivering experiences that are completely agnostic to whether something is “traditional” or “television” versus digital. The digital background is incredibly helpful to blending those worlds into great multimedia experiences for our audiences.

WS: What are the key strengths of Discovery’s global portfolio today?

PERRETTE: It starts with the people. Every business is about talent and people. The team that is in place [under] Mark Hollinger’s leadership has delivered incredible results the last several years. Secondly, we are constantly aspiring to be better and better storytellers.

Great content creation and great ideas and great formats…are truly globally incubated now. Ideas come from the U.K. or Israel or India and truly go global. We have people in all of these markets, so from a creative and content-development standpoint, our model as a global content company, not just a U.S. content company, is a huge asset. The third thing is our unparalleled

platform, again thanks to David [Zaslav] and the leadership team over the last seven years. The seeds were planted years ago by John Hendricks and the board, who very early on agreed that they wanted to invest in owning actual assets as opposed to just licensing content into the international markets. That has given us an unparalleled footprint from a distribution standpoint.

This is like beachfront property—it’s very hard to get now. We have it; we started building internationally 25 years ago. We have incredibly strong brands in a world of Millennials looking for authentic stories and relating to authenticity as a key theme in their entertainment.

That’s what we’re about. The last thing I’d say is the leadership team with David and the board have proven over the last 25 years [that they will] invest in what’s next in media. They were early to invest in cable in the U.S., they were early to invest in the international business and they were early to invest in HD. They have been innovators and have been willing to take those pioneering steps to develop what’s next. If you look at the next five or ten years, or the next 25, you can imagine that there will be an equal number of ways that we will want to try to reinvent the company and invest in the next things coming in the media space. Having that support and that background is incredibly helpful as you look forward.

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25 YEARS OF GROWTH “Discovery is a truly global company reaching 2.5 billion subscribers with 197 networks in 224 countries and territories, and we are focused on growing in all of those markets.”

—David Zaslav, President & CEO, Discovery Communications

1989

Discovery Channel launches in the U.K. and Scandinavia.

1994

Discovery Channel launches in Asia, Latin America, the Middle East and Africa.

1995

Discovery Channel launches in Canada, India and Australia.

1996

Discovery Kids launches in Latin America.

1997

Animal Planet launches internationally, and People + Arts launches in Latin America.

1998

Discovery Science launches internationally.

2000

Animal Planet reaches 100 million households globally.

2001

Discovery Channel becomes the world’s most widely distributed television brand.

2004

DNI announces the launch of the Discovery lifestyle portfolio of brands: Discovery Travel & Living, Discovery Home & Health, Discovery Real Time and Discovery Real Time Extra.

2005

Discovery HD, Discovery’s international HD network, launches in Asia and Canada.

2006

Discovery HD launches in the U.K. and Europe. DMAX, Discovery’s first free-to-air channel, launches in Germany. Discovery Historia launches in Poland.

2007

Discovery Turbo, dedicated to all things motored, and Discovery Knowledge, focused on history, launch in the U.K.

2008

DMAX launches in the U.K. Discovery World launches in Europe, the Middle East and Africa. Discovery launches its first international HD simulcast service for Discovery Channel in Japan.

2009

Investigation Discovery launches in Europe, the Middle East and the U.K. Discovery HD launches in Romania, its 24th international market. Animal Planet HD launches internationally in Scandinavia.

Quest launches on the Freeview DTT platform in the U.K.

2010

Discovery HD launches in India. TLC expands outside of the U.S. with a launch in Norway in March. TLC launches across Asia Pacific and other parts of Europe. The free-to-air channel Real Time launches in Italy.

2011

Discovery Communications acquires U.K.-based betty in landmark indie-production deal. In less than a year and a half, TLC reaches more than 100 million households outside the U.S., and continues its international expansion with launches in parts of Europe, Africa and Latin America. DMAX, Discovery’s second free-to-air channel offer in Italy, launches. DNI launches first 3D services with trial run in Japan and Brazil as well as a partnership with Sky in the U.K.

2012

DNI acquires Switchover Media. Discovery’s portfolio now has the third-largest market share in Italy, operating six channels in free TV and six channels in the pay-TV space. DNI acquires Dubai-based media company Takhayal Entertainment and its affiliated companies, including its flagship TV network, Fatafeat, the number one food network in the Middle East. Investigation Discovery launches across Latin America. Discovery Kids launches in Asia Pacific. Discovery MAX, a new free-to-air channel offering, launches in Spain. DNI acquires a 20 percent equity stake in Eurosport International channels.

2013

DNI acquires SBS Nordic operations from ProSiebenSat.1 Group, including 12 television networks, as well as leading radio stations and several digital brands in Norway, Sweden, Denmark and Finland. TLC launches in the U.K. OWN: The Oprah Winfrey Network has its first international launch as a programming block on TLC in the U.K. DNI’s female flagship portfolio now reaches 329 million households in 167 markets. Discovery Education International launches and acquires Espresso UK, the company’s first European-based education investment.

2014

DNI signs agreement to increase Discovery’s stake in Eurosport International from 20 percent to a controlling 51 percent. Central and Eastern Europe, Middle East and Africa announces launch of ID Xtra, a complementary channel to Investigation Discovery. For the first time in Discovery Communications’ history, DNI surpasses the U.S. in terms of delivering revenue for the company.

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