Discovery is not just making great strides, but looking far beyond its current footprint as it sets its sights on connecting with the next generation, as Anurag Batra discovers in a conversation with Discovery Networks International CEO and President, Mark Hollinger
In a recent gathering in New York, I had found myself surrounded by people I had grown to admire over the last many years. Some for just the sheer success story they stand for and some for the way they have led charge of businesses they have been responsible for. Some of these names included the likes of Oprah Winfrey, Morgan Freeman and Billy Ray Cyrus, and other names were the likes of David M Zaslav, (President and CEO, Discovery Communications). By now, you will have realised that I was at a Discovery event, one of the few companies that I hold in high regard for its vision and futuristic thought process. And you can also figure how every conversation one could have in such a gathering would have been an experience by itself.
But the one person I was “upfronted” with, was the man who is going to shape Discovery’s international presence – Mark Hollinger, President and CEO, Discovery Networks International. A lawyer by profession – I thought it was quite a coincidence that Zaslav too is a lawyer by profession – Hollinger is a 20- year Discovery veteran. He is responsible for the strategic development and daily operations of Discovery’s international division that distributes 23 media brands to over one billion subscribers in more than 180 countries. Being there, I did not think it was as easy as it sounds, but Mark makes it looks simple. For him, it is creating something on a strong foundation and then growing it in various directions but backed by strong strategies and thought process.
There is no doubting that Discovery has been very innovative in the way it views creation of media brands. Take the example of OWN – Oprah Winfrey Network, which is Discovery’s newest Network that launched on January 1, 2011 in the US. OWN replaced Discovery Health. This multi-platform JV between Winfrey and Discovery also has Oprah. com, and I was informed that it has already made quite a place for itself right from launch. The other new from Discovery this year, which I thought was very fascinating, was 3Net – a JV between Discovery, Sony and IMAX, leading to a 3D Network that debuted in February 2011. This is another first of its kind, and I would be very keen to see how this shapes the face of media offering to the new age viewers.
Only last year, Discovery had partnered with Hasbro to launch children’s network The Hub. The proposition took forward Discovery Kids network. One reason I chose to highlight these three of Discovery’s latest initiatives because I think the company’s route of collaboration and partnership in itself presents a forward looking proposition. We have not seen them take that route in India yet, as Discovery is still unleashing its international arsenal of offerings and even as I write this, I hear the channel has applied for licenses to five more channels in India. But for Hollinger, the targets are high. Despite Discovery’s India presence, he said, “We are in a good place in India but I don’t think we have done enough and we can do more. This is one of our key markets and we are keen to invest more in this market.”
India as a content marketplace presents challenges to a player like Discovery that makes significant revenues from the likes of on-demand and pay content in its other key markets. Hollinger observed, “The Indian market is such that you don’t get money for content yet, so you have to monetise the audiences you can aggregate. The Indian revenue team has done very well but distribution and advertising sales will drive investments.”
The one question that I think everyone in India either asks or thinks of asking to a media owner such as Discovery is whether, given the strength of the channel and the Network in India, can one expect the channel to dabble with other genres, may be even the general entertainment genre?
After all, Discovery too is known for its ability to tell a story. Tell a story, it will, but not a scripted one. “Scripts are minimal on our channel,” asserted Hollinger, and as I speak to him more, I understand general entertainment is also known as scripted entertainment. He added though, “Indian market is very big on fiction, and we are always looking at aspects like these but our core strength is nonfiction and we want to take that forward in the markets we are focussed on.”
One unique advantage for a company like Discovery is that its content is global, and has a universal appeal. In some cases, a relevant dubbing is enough to make a show as interesting to a viewer in India, as it would be to a viewer in China or United States. However, that has not hindered Discovery’s view on “local”. In fact, local is a word that featured quite a bit in my conversation even with Zaslav. “We are not an expat driven company,” Zaslav had said on the subject, adding, “We have local business leaders and we understand the importance of local languages. Indian has 42 main languages and with our language customisation infrastructure, we are already available in English, Hindi, Tamil and Telugu.” I should add here, Discovery has now also launched a Bengali feed. Content is something that the channel invests in whole-heartedly, just the visual imagery alone makes a lot of difference to Discovery’s content proposition.
I had to ask this, NGC is a strong competitor in India and now AETN is set to launch and with a powerful group like Network18. What does this mean for Discovery? “It is good that the genre is expanding and these are strong competitors. It would be foolish to say it would not impact us. Over time, that happens when new channels come in. But we feel good about our position in marketplace and we have much more to offer in India. So that is going to be our focus,” Hollinger puts across, speaking like a man who knows his market.
He reminded me that Discovery has a history in India, the company has knowledge of the market, it has local talent and a great foundation. In Discovery’s overall scheme, India features in the top three to five markets and once again that means that Discovery will continue to build on its present strategies in India and make its presence in the market larger. Some of the other countries of focus for Discovery are Brazil and Europe. Giving an example here of how big India is for Discovery, Hollinger also informed that in September 2011, Discovery’s management team that would comprise the top 30 leaders of the company would be meeting in Jaipur. I have been told this was the first time Zaslav would be coming to India – about time, I would say!
The other area where Discovery hopes to focus more in India is the kids segment. Being a father of two myself, I know that the channel has the kind of content that parents in India would want their children to view because it is a form of extended education. Hollinger realises this too and he cited Discovery’s international initiatives like Discovery Education 3M Young Scientist Challenge, which is premier science competition for middle schoolers, designed with the intention to cultivate the next generation of great thinkers and innovators. He said, “Discovery Education has content tailored for schools and there would be video streaming in schools in US going forward. This is still underdeveloped in India but we are exploring ways of how we can take this to India.”
In fact, this aspect of Discovery’s content offering is in line with its philosophy of satisfying curiosity, which is something that Zaslav was mentioning in our conversation. He said, “Co-viewing is of great significance for a channel like Discovery and we factor this in the kind of content we want on the channel. Discovery Kids is on these lines. Even a TLC is on this line, it is a shared viewing experience. Which is why content has to be translatable, and we feel more connected to those countries, where we have achieved this like in India.”
Being an avid Discovery channels consumer myself, I can tell you that Discovery does have a strong proposition in India. There is the perception that Discovery, Nat Geo, Animal Planet are very similar to a consumer of this content, and perhaps that is challenge Discovery needs to factor in its communication in India but I also believe that given the aggression seen from the company in the last couple of years, we can expect a lot more action as we move forward.
SATISFYING THE CURIOSITY OF YOUNG INDIANS
It was in 1985, in America, when Discovery Channel was aired for the first time. The reach was minimal then, but the idea was to offer something that the Americans had not experienced before. Today, the international footprint of Discovery is huge. Presence in more than 180 countries, 40 languages and more than 1.5 billion cumulative subscribers. It makes an interesting story as to how the network still thrives on the same idea that it was launched with, which is to provide new and refreshing content. And the need to continue that in today’s age is even more, as media has exploded and fragmented in big way. Especially in India – a growing market for Discovery. The testimony of that is the increasing viewership across group channels (now six channels with the launch of Discovery Science and Discovery Turbo) and the renewed focus on languages.
In 1998 Discovery Channel launched its 24-hour parallel Hindi feed – it gave the channel nationwide viewership. On January 1, 2010, it launched a 24- hour Tamil feed, after which Discovery Channel moved up its rank by 25 positions, time spent by the viewers on the channel increased eight times. Then it launched the Telugu feed, increased its viewership in Andhra Pradesh by 175 per cent (source: Discovery) and the recent launch of Bangla feed. Which means the channel is now available in five languages including Hindi and English.
Animal Planet is almost the same size of National Geographic, claim company executives. They’ve also indicated that the channel has outperformed its rival from the Star Group in Digital ratings. (Animal Planet is available in two languages – English and Hindi). TLC – Discovery’s definitive lifestyle channel has struck the right chord with its viewers in India, if one looks at the viewership and distribution statistics.
So it would be only fair to credit the company, which is said to be the first mover in its space to go regional. It has penetrated deeper into India and has earned the tag of India’s 9th largest channel cumulative reach-wise: A strong reflection of the brand’s mass popularity and the India changing story.
Rahul Johri, Senior Vice President and General Manager – South Asia, Discovery Networks Asia Pacific explains Discovery India’s journey. “The 15-year journey for us in India has been outstanding. India has changed. Digitisation has contributed to that change and the youth is a major influencing factor in India’s growth story. There is tremendous scope beyond the metros. That’s where our future growth is.”
The last decade witnessed an unparalleled increase in the number of television channels, widening of the broadcast platforms -introduction of the exciting new formats and evolving demands of advertisers and affiliates. How does Discovery look at this? Who does it consider as competition? For Johri, it is the whole television landscape and not just channels within the same genre. “The consumer does not differentiate channels genrewise.
Today Discovery is 20 per cent bigger than Hindi news, it’s bigger than English Movies – all the English movies put together; it’s bigger than all the English news channels put together. We’re almost four times the size of National Geographic. We don’t look at them as competition. So outside of entertainment and cricket, we’re the biggest channel. And the viewers have given us the opportunity to be such a big channel and we will continue to deliver on that.”
Johri further elaborates on the group’s success. “We have a very strong distribution network in place. That’s because One Alliance which distributes us is the strongest distribution platform in the country. We’re available in virtually every home in the country. Now what’s the next step for us? It’s really about enriching the viewer experience. How do you do it? The best way is to provide your global content in the regional language that the local viewer understands and converses in.”
Apparently, Discovery is the only company in India which has launched three channels in different languages in a year, where content on each channel remains primarily the same; what changes is the language. So a viewer gets the same global content, but in his mother tongue.
With distribution – one major hurdle being crossed, the challenge for Discovery India is to keep raising the bar as far as viewership is concerned. Johri tells IMPACT why it would be one – successful in sustaining the numbers it has delivered, and two – to be able to grow them in the years to come.
“Over the last few years, we have doubled our network portfolio and have substantially increased our viewership base. Discovery’s strength of bringing non-fiction content based on topical and enriching subjects, presented by finest entertainers, experts and renowned personalities, has been able to serve its mission of satisfying viewers’ curiosity.” He further states that not many companies can claim to be leaders in six unique genres. “We are pleased to be in such a coveted position. We’re the No1 non-fiction entertainment channel. TLC is the home of lifestyle television. Animal Planet is the only one of its kind. Discovery Science, Discovery Turbo and India’s first 24-hour definition channel Discovery HD World have broadened Indian television landscape. So there is no reason why we shouldn’t continue delivering. With consistent, differentiated and high-quality global programming, unmatched India productions and unique and exciting new formats, I see a very bright future for all our brands in India.”
International clout
Discovery, as is known, is a listed company in the US. Its revenues in Q1 of 2011 saw an increase of 9 per cent to $951 million. Chief Executive Officer David Zaslav was quoted on saying, “Discovery Communication’s consistent investment in content over the past four years, along with a drive to expand our subscriber base domestically and internationally, has enabled the growth of audiences across the globe. In the first quarter of 2011, we recognised the value of our increased viewership through double digit advertising gains that further built upon the strength we demonstrated throughout 2010.”
As for the future, Zaslav said that the company will remain focused on delivering sustained operating leverage and free cash flow growth, while also continuing to invest in Discovery’s diverse set of brands and platforms around the world. With the networks growth, comes the focus on India – the No 1 market in the Asia Pacific regions, said Johri.
The road ahead The company had an eventful 2010 with series of new shows, new channels (launched Discovery Science and Discovery Turbo, revamping the old ones (the rebranding exercise of Travel & Living to TLC, and last but the most important move – to increase its reach in the regional space. On how TLC has shaped up as what they position is the definitive lifestyle channel, Johri said, “TLC is a big channel for us. It completely dominates the lifestyle genre in India and we will continue to work on that. I look at TLC as one of the most successful channel launches in recent years in India. It has defined and established a genre and the way its viewers relate to it is fantastic.”
The rebranding exercise of the channel saw a high octane multimedia campaign, and the channel to change its name and yet increase its viewership is indeed a task well performed.
As for the year 2011, the focus will be to engage younger audiences and as Johri indicates, that will be done via various marketing initiatives and campaigns. How does the Discovery model work? Does advertising take the driving seat, or is it also subscription revenues that contribute to the overall kitty? Johri says that the revenue split between advertising and distribution is even, and that the company will look at consistently building on both. The content sharing practice and the partnerships with Discovery companies in other markets, plus local acquisitions are factors which has enabled growth in the bottom line and establishing a solid base of viewership in the country.
The company’s target for the next five years is to continue its endeavour in satisfying the curiosity of millions, and make television viewing as expansive and entertaining as one could imagine. “We are in India for the long haul,” concludes Johri. The past few years have brought rich dividends. Launch of local languages, investment in programming, execution of high-decibel local productions, a robust distribution system, and the widening of the viewership base – all combine together for a victorious innings for Discovery Group in India. As viewership patterns change over the years, it will be interesting to see how the international giant manages to adapt itself to Indian broadcast complexities.
