Zaslav: Brand, Not Ratings

12/06/2006 12:31 AM Eastern

New York -- With just weeks until he assumes his new role as CEO of Discovery Communications, NBC Universal Cable and Domestic Television and New Media Distribution president David Zaslav told the audience at an investor conference here Tuesday that niche networks like Discovery Channel need to focus on strengthening their brands, which will lead to higher affiliate fees and advertising revenue.

Zaslav, who is expected to assume his new role at Discovery early next year, told the audience at the UBS Global Media & Communications conference brand development can often be more important than ratings.

While Discovery’s ratings are down from their heights during the early part of the decade, the networks are beginning to show some improvement. But Zaslav said at the conference that with niche channels like Discovery, high ratings aren’t as important as strengthening the overall brand.

“You have to evaluate what your brand is, and sometimes it’s not going to be about getting the highest rating,” Zaslav said. “What’s the rating of [Home & Garden Television]? If you do an OK job it’s 0.6, a great job it’s a 0.8 and if you do a not-so-good job it’s a 0.4 or 0.5. Home & Garden may never be a 1.4 network. If you try to make some of these niche channels too broad, then you are going to get outside of what you are. The focus really isn’t about just growing the ratings, because that sort of misses the point.”

He continued, “If Sci-Fi [Channel] can deliver a 0.8 rating with an audience that is really solid with a strong demo, you’re going to get a higher CPM [cost per thousand homes], you’re going to have a much happier audience that is going to watch for a lot longer, you’re going to be able to take that content and monetize it on a series of platforms much more effectively because its going to be coherent and clear, and you’re going to be able to build the economics of your business significantly.”

Zaslav added that it is equally important for networks to take advantage of digital distribution platforms like the Internet and mobile devices like Apple Computer’s iPod and cellular phones, even in the absence of a defined revenue model, or risk losing audience.

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