Zaslav’s First 100 Days of Discovery
Q&A With Discovery Communications CEO David Zaslav
By R. Thomas Umstead -- Multichannel News, 5/6/2007 8:00:00 PM
The first 100 days of David Zaslav’s tenure as Discovery Communications CEO have seen unrelenting restructuring. First, a revamp of top management. Then, employee ranks were thinned by 200, in the U.S. networks and education businesses. But there’s also been ratings success, notably with two high-profile events, the controversial Lost Tomb of Christ, about earthly remains of Jesus and his family, and Planet Earth, the 11-episode chronicle of global discovery that was five years in the making. The series averaged 5.1 million viewers per episode. Multichannel News editor in chief Tom Steinert-Threlkeld and programming editor R. Thomas Umstead recently sat down with Zaslav to discuss his arrival from NBC Universal, where he was head of its cable and domestic TV operations, as well as his future plans for Discovery — particularly on the new media and new business fronts. An edited transcript follows:
MCN: How would you characterize your first few months? Did you accomplish the things you set out to do?
David Zaslav: I think I had a real advantage coming in. I was still doing some things at NBCU for a period of time before I came to Discovery, so from the time I announced in November to when I started in January, it was a period of time where I was able to read through the company, get a good sense of what the company was doing — where they were doing well and where they weren’t.
I spent a lot of time talking to people and a lot of times I just listened. And it turned out to be very instructive.
MCN: What were the three biggest things you learned about Discovery in that period?
DZ: No. 1 is that I think they have the most compelling international business and platform of any media company in the world. MTV has had a global business, but they have to reinvent MTV in every country. CNBC did quite well, but they had to fire up a studio when they launched business news in Germany and news in Japan.
With Discovery, you do a great program, you do the translation and it works everywhere.
Two, they have a completely different programming model than a USA, a Sci-Fi, a Bravo, a TNT, a TBS, an FX or Lifetime. They don’t rely on acquired product.
You spend less time trying to figure out what’s for sale and more of your time trying to figure out what to create.
I think, ultimately, it’s a little bit more fun, because we’re all creative. It’s higher risk in the sense that if you don’t create good programming, the whole model falls apart. But if you do create good programming, then you have a better model than anybody. You own it. You can go global. You’ve got new media [content].
And three, I’d say that [I learned] how good some of the people at Discovery are. There was a little bit of a hop in the step that Discovery once had that was missing. This was the No. 1 cable channel, from my perspective — I thought it was the real leader in the industry, and what was great about cable — for so many years.
When I went in there and spoke to people, they felt good about Discovery, but they didn’t feel like Discovery was the No. 1 nonfiction media company in the world.
You didn’t get that feeling, when you went in there.
MCN: What was the feeling?
DZ: That we’re doing well, but we could do better. And I thought that maybe that was because they believed we’re a good company, but the world is changing, and I think we needed to change faster. We could be more aggressive. We could be more competitive. We’ve got great brands but we should be louder about them. We’ve got a lot of success; you know, and we should be telling our story.
MCN: You say you want to put the hop back in people’s steps, yet at the same time, it’s hard on people when you restructure management in one month, and then start cutting people the next. And we would expect, if we were sitting there, I’d still be wondering what the next shoe was to drop, personnel-wise.
DZ: It is hard. But, you know, almost uniformly what I heard was that we want change. We want to change and we want to win.
We want to be the No. 1 company in the world. And there is this feeling that we’re on a mission.
What I tried to do is really to create some more clarity of role. We empowered each of our channel leaders. We created clear P&Ls [profit and loss responsibilities]. A lot of this restructuring is really focused on how Discovery is going to grow. And that’s going to be through investing in more original programs; by investing in new media or generically growing it, and buying additional businesses that relate to our brands.
I mean, we’re not just in the cable business. ESPN has done a great job, but they’re not just a sports-cable business. They’re a sports-media business.
So those are our growth initiatives. And everyone at the company looks at those and knows those. So that’s the right side.
The left side is everywhere we’re spending money that doesn’t relate to those things. And so, even though we’ve done an aggressive restructuring, the idea isn’t that we’re just getting rid of people.
Because, in many cases, we’re eliminating a lot of jobs, but we’re creating new jobs. We’re creating new jobs in our Planet Green initiative. We’re creating new jobs in new media. We’re creating new jobs in international, where we have a lot of growth. But there is some natural trepidation about change.
MCN: How many new job openings have you created in the first hundred days?
DZ: A fair amount.
MCN: Put a number on it.
DZ: I don’t know the number. But, you know — those are three key initiatives where we’re going to be adding people.
And on Green, alone, we’re going to spend an incremental $50 million across all of our platforms. At Discovery, we’ll do a big [environmental-oriented] tent-pole program which will be 10 Ways to Save the Planet. And Animal Planet is going to do a big initiative on animal extinction. And TLC will do their own tent-pole initiative on living green, and how things like organic food are changing the way people think.
So we’ll have the Green Channel, and then we’ll have those tent-poles. But the idea of the reorganization, which everybody gets, is something every media company is going through.
If you’re going to run a media company in 2007 the same way you ran it in 2000 or the year 1995, you’re going to get dusted, because that’s not the way people watch TV. That’s not the way the business model works anymore. And if we want to be competitive, we need to be where people are watching our content.
Today’s core might be the domestic channels and the global channels, But in five years, Discovery’s online business, and the businesses that we buy that relate to Discovery and its mission of adventure and exploration are going to hopefully be as big or bigger than Discovery.
If you’re just a cable company, and you don’t expand your niche and your passion for it to your viewers, then you run the risk of being diminished.
MCN: How do you take advantage of the new media that’s out there?
DZ: There’s no easy answer. Do we give our content to big distributors? Do we go out and buy a bunch of new-media businesses? Those are things we’ll be debating, internally, and then with the board, in terms of how do we maintain and grow our market share.
MCN: Where do you think the opportunities are for you in broadband and mobile?
DZ:It’s unclear. I think we can have an aggressive position on those platforms, but I don’t know whether that aggressive position is going to create significant dollars, yet. The business model for all of us — whether on mobile and on broadband — remains to be developed.
MCN: And what about mobile? We don’t see people watching Planet Earth on a two-and-a-half-inch or even four-inch screen.
DZ:Mobile is actually a very good business model; we content owners get paid every time someone buys a phone, so, it works well.
The problem is that all of the projections on how people are going to be watching is not scaling up the way many of us envisioned. Whether it will or not remains to be seen. I hope it does. There are a lot of big companies that are betting money that it will. And, if it does, it’ll be a good thing for us. But it just hasn’t developed in a way that I think it will to date.
MCN: How much money are you spending on original programming?
DZ:All around the world, about $700 million in original programming, per year. So the question then becomes what do we want to spend that on? And, you know, my view is we need less programs that average a 0.4, 0.5 and 0.6 rating — that’s just okay.
When you turn on Discovery, it shouldn’t be just okay. When you turn on TLC, it shouldn’t be just okay. The first thing is it’s got to be on brand.
MCN: Exactly what is Discovery’s brand? Is it the big events like Planet Earth and The Lost Tomb of Jesus or is it reality series like Deadliest Catch?
DZ: I think, first of all, that Discovery is about satisfaction. It’s not adventure and exploration. It’s satisfying curiosity. That’s what it’s about. And that’s what the brand is.
The way the net brand works best is with big and super-ambitious technical programs that we’re running. You know, like Shark Week and like Planet Earth. Next year, we’re going to do a special, 10 Ways To Save The Planet. These are big, expensive programs and you’ll see a number of them in the works this year that are very exciting.
So, we have our big tent-pole programs that when you turn it on you say, wow. And then [Discovery] has series that are really on brand and that are about adventure and exploration, and satisfying people’s curiosity. So, I think Planet Earth just reflects the best of what Discovery is.
And then we have the Deadliest Catch series that we debuted [last month] for the third season. That’s also Discovery at its best. Our viewers have said to us when we watch Discovery, we want to feel like we’re in the boat or we’re on the safari with you. It’s not just adventure and exploration … it has to satisfy curiosity.
So, I think to stay on brand and invest in bigger, stronger programs we need to do less of the channel chunk. I think we’re better off doing 12 big tent-pole specials, and 10 great series for Discovery rather than doing 20 series that are okay but we’re just trying to fill a time slot.
MCN: So where does TLC fit in? Everybody is trying to define what TLC is going to be, but from your perspective, what is TLC’s brand?
DZ: TLC is a nonfiction entertainment channel. We have a ton of series, right now on the air that are really scoring. We have What Not to Wear. We also have American Chopper, Miami Ink and Flip That House.
We also got a 2.1 [household rating] on [the April 9 premiere of] Little People, Big World. We have six or seven series that are getting over a 1 rating.
MCN: In your overall focus on Discovery, did The Travel Channel not fit into your plans?
DZ: They’ve asked me, because we’re a semi-public company, not to get into anything related to Travel. The whole deal hasn’t closed yet, so there’s a quiet period.
MCN: How often have you had dinner with chairman and CEO of Advance/Newhouse Communications Bob Miron? (Advance/Newhouse, along with Liberty Media, own Discovery Communications.)
DZ:Many times. Bob’s one of the reasons I’m here. I’ve known Bob Miron for over 15 years and John Hendricks for over 20 years. I mean, I’ve felt like I’m coming to work with people I really admire. I’ve also spent a lot of time with [Liberty Media Corp. president and CEO] Dob Bennett and [Liberty chairman] John Malone. [Discovery Communications founder and chiarman] John Hendricks and I work very closely.
So I have a strategic brain trust with those guys. They’re great thinkers. And it’s extremely helpful.
MCN: What’s the future of Discovery stores?
DZ: They’re under strategic review.
MCN: Which means what?
DZ: It means that we have some great stores that are in great malls around the country. In addition to the stores, we have an e-commerce business that’s very strong.
When I got to Discovery, my overall attitude was to start all over. Let’s take a look at everything. I don’t want to do anything because it made sense five years ago.
So we’re having a meaningful strategic review. What’s succeeding in the company? How are other media companies playing? How are other retailers playing within our demo? What’s the best thing about our stores?
Then we’ll try to come to an overall conclusion about what we do with commerce that’s in the best interest of Discovery Communications. So that’s the process.
MCN: Are there any other brands that you would like to add to Discovery?
DZ: Well, having Green — converting Discovery Home to a green channel — is something that’s extremely appealing. It’s important for the Discovery brand to do a green initiative. I think it makes it compelling.
We’ve heard a huge outcry from the cable operators, from advertisers and from consumers saying this is fantastic. We have other emerging networks like the Science Channel that’ll take your breath away, it’s so good. It’s one of the fastest growing networks in cable.
We have six or seven networks that are in between 45 million and 65 million homes … those are big businesses.
I mean for two years we’ve been waiting for [News Corp.] to launch [its] business news channel. For two years, they’ve been working on trying to get 30 million homes.
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