Discovery People Fades Out - Multichannel

Discovery People Fades Out

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Discovery Communications Inc. has had great success
expanding distribution of networks it has acquired, such as The Learning Channel and
Travel Channel. But this was not the case with Discovery People, a service DCI once
expressed high hopes for.

The former CBS Eye on People, which DCI acquired from CBS
Corp. in December 1998, will go black late in the second quarter or in the third quarter,
according to Bill Goodwyn, executive vice president of affiliate sales and marketing for
Discovery Networks U.S.

Goodwyn maintained that DCI made the decision to shut down
Discovery People at the end of February, after the programmer concluded a new carriage
deal with AT&T Corp.'s Headend in the Sky. Discovery wanted to get its Discovery
Health Channel moved to HITS transponder 1 -- which most AT&T Broadband & Internet
Services digital-cable systems carry -- from its current unfavorable slot on transponder
11.

Discovery People is now on HITS transponder 1, so it would
have been moved to pod 11 to make way for Discovery Health. And Goodwyn said it
didn't make sense to keep Discovery People going when virtually its only carriage
left would be on that pod.

The only other distribution Discovery People had was with a
few smaller operators, he added.

That's because also late last month, Cablevision
Systems Corp. said it planned to switch out Discovery People -- which CBS used for some
retransmission-consent deals -- for Animal Planet in more than 1 million New York
metropolitan-area homes.

Speculation about Discovery People's demise has been
swirling for several months. It began after DCI starting allowing cable operators, as well
as DirecTV Inc., to convert Discovery People's carriage to networks with a higher
priority for the programmer, such as Discovery Health and Animal Planet.

But DCI's decision to concentrate on driving
distribution for Animal Planet, Discovery Health and Travel in a sense confirmed what some
MSO officials had said all along: The programmer had spread itself too thin and perhaps
overextended itself, and its affiliate-sales force realistically just couldn't secure
carriage for all of the networks in its ever-expanding stable, which includes a suite of
digital networks. And on top of its owned networks, DCI also handles distribution for BBC
America.

With channel shelf space so tight, Goodwyn said, DCI simply
couldn't go to cable operators looking for slots for Animal Planet, Discovery Health
and Travel, as well as Discovery People. It had to prioritize.

When DCI said it was spending roughly $350 million to ramp
up Discovery Health as an analog channel and to create a related Web site, that seemed to
have dictated Discovery People's fate.

"It's not a question of spreading ourselves too
thin," a Discovery spokeswoman said. "It's a question of limited capacity
out there in the market … Travel Channel and Health are definitely a priority.
It's a matter of economics and making decisions accordingly."

When DCI acquired Eye on People, which then had roughly 11
million subscribers, officials said they expected its future distribution to be a hybrid
of analog and digital carriage.

At that time, Discovery Networks U.S. president Johnathan
Rodgers said, "The network's high quality, reality-based programming is a
logical extension of Discovery's nonfiction networks."

Last April, DCI said it planned a new program schedule for
Discovery People that would be more personality-driven.

In another prong in its effort to increase Discovery
Health's distribution, last June, DCI entered into an agreement to acquire control of
Glenn Jones' Knowledge TV, with plans to give operators the option of converting its
distribution to Discovery Health. The Discovery spokeswoman said DCI is still carrying
Knowledge TV as a service.

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