Content

Dirty Work

8/11/2006 8:06 PM Eastern

Shark Week was over. So, in primetime on the first Sunday in August, Discovery Channel went back to its tried-and-true hit series, Dirty Jobs, to attempt — almost literally — to clean up in the ratings.

At 7 p.m. (“Garbage Pit Technician”). At 8 p.m. (“Skull Cleaner”). At 9 p.m. (“Geoduck Farmer”). At 10 p.m. (“Fuel Tank Cleaner”). At 11 p.m. (“Garbage Pit Technician,’’ in case you missed it). And at midnight (“Skull Cleaner,” ditto).

It’s a scheduling tactic called “looping.” Showing the same show again and again.

Before the advent of the digital video recorder, it was smart, said Robert Routh, managing director and stock analyst at Jefferies & Co. Give people more chances to watch what they like, to fit it into their schedules. Now, viewers just watch shows they choose, playing them back when it fits their schedules.

But DVR penetration is still low. About one in eight households use one, and only about 4% of all TV viewing is from digital recordings, according to a study released last month by Leichtman Research Group.

Root’s Five Rules
Discovery Channel executive vice president and general manager Jane Root’s five rules for getting large audiences:
— Tom Steinert-Threlkeld

1. Sometimes, bet big. Like the Flight 93 docudrama, which generated one of the three biggest ratings for a movie that Discovery has made.
2. Don’t risk overexposure. Show a lot in a short period and leave them wanting more.
3. Variety, variety, variety. Every night is different.
4. Take risks. Who’d have thought a series in primetime on crab fishing (Deadliest Catch) would be a hit?
5. Trust your instincts.Greatest Americans might not work out. But another project (Global Warming: What You Need to Know) will.

The implication: That Discovery Channel’s “looping” could cause it to fall into the same trap that led its ratings to fall 30% in the last four years, from 1.3 million viewers on average in primetime in 2001 to 1.0 million last year, according to Nielsen Media Research. The snare: Over-reliance on hit properties.

“They can give you enough candy until you get sick of candy,” said Bill Carroll, vice president and director of programming for Katz Television Media Group, a seller of time on broadcast media.

It’s a problem Discovery said it recognizes — and is in rehab for.

“There were a few shows that were threatening to eat the network, but we put them back in the box,” said Jane Root, executive vice president and general manager of Discovery Channel for the past two years.

For flagship channel Discovery, the oversized hits were gearhead-geared shows, Monster Garage and American Chopper. But the problem — and the pain — was most obvious at TLC, the other big network in the Discovery Networks U.S. stable.

For a brief time, TLC actually had more viewers than Discovery Channel, with 1.2 million during primetime in 2003. That was at the peak of what current general manager David Abraham calls the “Trading Spaces boom.” That’s when its program that showed neighbors redecorating each other’s homes was at the top of its game and copycat programming on other networks hadn’t yet diluted viewing.

But what Discovery needs now is diversity. Lots of singles, doubles and triples, occasionally home runs. An ability to pull in viewers reliably, any night of the week — or any day. To be able to control, or at least manage, its top and bottom lines, now that part-owner Liberty Media Corp. has put its 50% of the programmer in a publicly traded company called Discovery Holding Co. And with viewers’ attention getting split ever more narrowly, to get back on something akin a predictable track.

“I don’t know that I’ve ever witnessed a more turbulent time in our business,” said Billy Campbell, president of Discovery Networks U.S. “But the fair warning is: I am not sure it is ever going to be sort of smooth sailing.”

Discovery — and all of its sister channels — have fallen out of the top ranks of basic-cable programming. Only Discovery Channel made Nielsen Media Research’s ranking of the Top 20 most-viewed ad-supported basic-cable channels of 2005. It came in at No. 20.

TLC was No. 28. Animal Planet was not far behind at No. 31. Travel Channel? No. 39.

Just as Discovery tries to find its footing again, after two decades of nonstop oversized growth, the first CEO to try and follow in founder John Hendricks’s footsteps is leaving, after just two years as captain of the boat. And it’s not clear who will take the helm after Judith McHale devotes herself to politics and social issues. No clear successor was being groomed.

“She was a good lieutenant to John Hendricks, but, given the ratings mishaps, it’s not surprising that she is not going to be around to run it as No. 1,” said Janco Partners analyst Matt Harrigan.

McHale declined comment last week, after announcing she would leave the company on Dec. 1. But her departure is not the first.

Half a year before she stepped into the CEO spot in June 2004, the general managers of Animal Planet and Discovery Health Channel resigned. A month after being named to the post, Travel Channel’s general manager left. Early last year, TLC’s president, Roger Marmet, resigned. This year, Discovery Channel’s head of programming and development Abby Greensfelder and TLC’s production and development chief, Sean Gallagher, left to start their own shop, called Half Yard Productions. Greensfelder has yet to be replaced.

Layered on top of this was the stress of running what a year ago became a “pseudo-public company,” as Routh puts it (see “Mexican Standoff,” page 21). Discovery Holdings stock has drifted downward, from $15.09 when it debuted last July to $13.55 toward the end of last week. McHale has had to field “lots of calls from investors,” with questions she never had to answer before. “She may have just said to herself: This is not what I signed up for,” Routh said.

Discovery still has real ratings issues to address, particularly at TLC.

But recent scheduling moves and results would seem to bear out that McHale and her lieutenants have steadied the boat and started steering in a safe direction. Discovery Channel ratings have gained strength nine months in a row. In July, the average primetime audience was up 13% compared to a year ago. TLC’s ratings were up 16%. And the channel popped into the Top 10 watched by women.

The new mandate? Find a lot of sustainable, interesting shows that stick close to the mold of helping viewers learn about or explore the world around them. Don’t strike out trying to find the next big megahit, like Trading Spaces.

Like Discovery’s Walking With Dinosaurs, or Raising the Mammoth.

Those beast-based shows used to grab 8% or 9% of the available viewing audience. Now, Trading Spaces or any other show is considered a “megahit” with 5% or 6%.

In effect, the splintering of viewer attention among more and more channels and more and more media — including video downloads and iPod playbacks — is making it hard to get back to the days of 1.2 million or 1.3 million viewers throughout primetime.

“They now have the problem of everyone nipping at their heels,” said Carroll.

The biggest “nip” could actually be coming from Discovery’s networks themselves. The Science Channel. Discovery Health. Discovery Times Channel. Animal Planet. With a proliferation of digital services, Discovery has “segmented the programming that traditionally was on the flagship channel,” said Shari Anne Brill, director of programming at media agency Carat.

And the other “nips” come from the kind of programming now appearing on all types of cable and satellite channels that’s making life tougher.

“When I was getting my eights and nines, there was no [The] Closer, there was no [The] Shield, there was no Nip/Tuck. Cable just recently discovered the value of these great scripted programs. There was no [National Geographic Channel]. So, we had the field wide open and we marketed the hell out of it, I’ll tell you,” said former Discovery Networks U.S. president Johnathan Rodgers, now the CEO of TV One.

One million — where Discovery is now — may be the new 1.3 million.

“Nobody’s ratings are really as high as they were five years ago,” said Campbell. “We’re really pleased, especially in a universe where five years ago people didn’t have 200 to 300 choices.”

JUST LIKE NAT GEO

Now, Discovery is not the only — or, in some cases, primary — brand in consumers’ minds for high-quality, nonfiction documentaries and exploratory programs on television.

“We used to say we’re launching this channel and it’s 24 hours, just like National Geographic,” said Charlie Humbard, one-time general manager of Discovery Networks and now the head of Gospel Music Channel. “We used Nat Geo as kind of the gold standard at the time for quality nonfiction reality programming. That was the only way you could get an operator in Argentina, Brazil or India to understand what it was.”

But the tables turned when Nat Geo launched at the start of 2001. “They would say, 'This is like Discovery.’ It’s funny how that works,” Humbard said.

In fact, National Geographic Channel last year saw its ratings go up 33%, to 0.4% of households reached. That may not seem like a lot — but Discovery Channel was at 0.8.

Not all that surprisingly, Nat Geo has honed in specifically on Discovery’s turf.

Its big programming hire? John Ford, formerly president of new media for Discovery Networks U.S.

“The hallmarks [at Nat Geo] are relevant programming that’s authoritative and also has a factor of amazement about it,” Ford said, pointing to programs such as In The Womb, with special effects and what he called 4-D photography; and Gospel of Judas, which dissected a controversial new and ancient record of the life of Jesus.

Therein lies Discovery’s quandary. How does it out-amaze not just itself, but a rival with a growing audience?

“It’s like watching old Discovery, in a way, just kind of brought forward,” Humbard says of Nat Geo.

“It’s the same kind of concept. Everything’s got a super or amazing or whatever in the title. The secrets of, the super this, the incredible that, in the titles. And I think it has a very strong appeal to the curious viewer.”

More telling: the effect on his family. Hearing expletives on the TV one night, Humbard asked his single-digit-aged children what they were watching. He said it turned out to be one of Discovery’s mainstay, reliable ratings-grabbers: Mythbusters.

Nat Geo — and Ford — are taking note. Nat Geo can still do a two-hour special on the Eye of the Leopard and grow. Discovery may have to revert to a splurge of Dirty Jobs or American Chopper episodes to keep its ratings up.

“The tyranny of numbers works in our favor at this point. We continue to do programs that are authentic and continue to grow,’’ said Ford.

Nat Geo, said Harrigan, “has made some inroads.’’ One piece of evidence: Humbard’s children. “Seven times out of 10 when I walk in there, they’re watching Nat Geo,’’ Humbard said.

TIME TO GROW

Growing lots of authentic, reliable hits takes time. Root points out she’s only been in her job two years — with time out in the middle for a pregnancy.

Yet she now has 15 programs that earn the attention of at least 1% of the households that can possibly view them at any given time. That, in the world of cable, satellite and Internet attention-splitting, is notable, she said.

Plus, Root is now constantly on guard against overexposure of any prime Discovery Channel property. One of its current big hits is Deadliest Catch, about the challenging lives of Alaskan crab fishermen. But episodes only show up in one quarter of the year.

Even the “looping” of Dirty Jobs can be misleading. Sure, if six episodes show up on a Sunday and three more episodes show up on the following Tuesday, you can worry that a programmer is overexposing a particularly popular program.

But the heavy run of Dirty Jobs will last four to six weeks and then disappear, said Root.

“We make no complaints about [that]; we know how cable audiences work,” Root said. “We give them several chances to see our most popular shows.’’

And Discovery is trying to find programs that win viewers in many “genres” now of reality programming, from history to archaeology to anthropology. Among the hoped-for hits: Going Tribal, Survival and Everest: No Experience Necessary. Waiting in the wings: former ABC News Nightline anchor Ted Koppel, who will bring investigative journalism and, in a fashion, celebrity to the channel. Also in the wings: a multiyear series called Atlas, which will explain life in different reaches of the world, starting with China.

Abraham, by contrast, has only about half as many shows that reliably earn the attention of 1% of households able to watch TLC. The big hit is still Trading Spaces, the Saturday-night anchor. The up and comers are Miami Ink, about family relationships in a tattoo business, and Property Ladder, about the economics of housing.

Its new tack: Concentrate on the lessons of life for a specific age group. One that is very acquisitive. One that is creating families, forming households and buying the stuff that one conducts life with. The 28-42 year-old set.

The genres: Family issues, parenting, managing one’s own real estate.

It’s a hole in the video marketplace that Abraham believes has gone unfilled. MTV and VH1 have seized the 20-something market. The broadcast and most cable networks have audiences that average in their forties. Hallmark, Cable News Network and Fox News Channel have viewers whose ages average in the 60s.

The lost generation? Those in their 30s, by Abraham’s account. They have Comedy Central (average audience age: 31).

TLC’s answer? Such fare as Shalom in the Home, where a rabbi rides an RV across the country to instill peace in households across America; Honey, We’re Killing the Kids, which actually transpires as a treatise on proper nutrition and living; and the aforementioned Miami Ink.

Hitting it big with the tattoo set is important. Abraham and his “theme management team” want to build on the “heritage” of the Discovery brand and spread out its risks at the same time.

ROUGH WATERS

But the lure of big numbers remains. Later this year, TLC will add of the Discovery Channel’s biggest eye-grabbers: American Chopper and Monster Garage.

The connection, to Abraham, is obvious: If you’re going to speak to 30-somethings about the drudge aspects of life, like bill-paying and tax-suppression, you have to speak with them about their passions. Like creating exotic personal vehicles, with one’s own head and hands. Besides, “Fear Factor and The West Wing coexisted on NBC at the top of their game,” said Carroll. “American Chopper can certainly coexist” in the same lineup as “things that might be perceived as having great quality.”

That may lead to a night of programming about “rides of your life” whether by bike, boat, plane or car.

And help win younger male audiences. In the last year, Abraham said, the average age of a TLC viewer has dropped to 40.3, from 43.6.

If the Discovery networks have learned anything from their fall from the top ranks of Nielsen’s basic-cable ratings, their executives said it is this: You can return to your roots.

The trick, as Root puts it, is to drape your “core DNA in this year’s clothes.”

But McHale and crew aren’t out of the water yet. And may never be.

“I told the team this morning, there’s never going to be Lake Placid,” Campbell said Thursday. “It’s just not going to happen. The water’s choppy now and guess what? The waves are going to get taller.”

“But,” he said, “I think we’re building a ship that is much more seaworthy.”

November