OnScreen Summit 2011: Zaslav: Discovery Still Tapping International Opportunities

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New York--Owning content that crosses borders, Discovery Communications president and CEO David Zaslav extolled the continuing opportunities that exist internationally for the media company.
With distribution stagnant Stateside, U.S. gains have been tougher to come by, but Discovery still has managed to chart amelioration with both its established and nascent services.
Those were among the key takeaways from Zaslav's opening keynote interview at MultichannelNews/B&C's OnScreen Media Summit here Thursday morning.
Currently delivering content in 48 languages over 142 networks in 210 countries, Discovery is riding international growth spurt anchored by margins in the 50% range, according to Zaslav.
Leading the charge: TLC. With Discovery averaging six channels in the various nations abroad, Discovery made a commitment to the female-skewing TLC, converting extant services in a number areas to the format. As such, Zaslav said TLC now reaches some 100 million homes in 171 countries outside the U.S., and has quickly established itself as one of the top women's brands worldwide.
Discovery has also achieved success internationally with Science and Animal Planet. Regardless of the brand, Zaslav layers on its own "secret sauce," which makes viewers in Russia think that Discovery Channel is "theirs and not an American Channel."
To that end, Discovery melds a combination of Stateside fare with dollops of localism. Zaslav explained that Discovery is not just "pushing a button" when it comes to channel launches abroad. Rather, it is steered internationally by a "local philosophy, with local people, with local voices." He said that 50% of programming from, say, TLC is imported from the U.S., but with the composition differing from Moscow than in Italy. The balance of the programming is "very different, regionally, locally or by country."

For instance, Don't Tell The Bride has been localized in Poland, where it ranks first in its time period among women.
The varied content plays are part of a major jump in programming spending, which has soared from $600 million five years ago to $1 billion today. Zaslav said Discovery encourage its creative people to take risks, knowing full well the majority of the gambits won't work and much will be written off.
Nevertheless, such investment is necessary to build Discovery's business abroad and in the mature U.S. market. Regardless of residence, people tend to watch between six and eight channels, perhaps as many 10. Internationally where channel lineups are still developing, Discovery services represent a sizable portion of those rosters.
In the U.S., it's more difficult to secure that share amidst the typical 200-channel expanse -- especially since the mulitchannel video household universe has flat-lined over the past year.

Nevertheless, Discovery, gilded by Gold Rush, and TLC have carved out top level positions among male and female viewers, respectively, on Friday nights. For its part,  ID, according to Zaslav, is the fastest-growing cable channel in the U.S. and has become a top 10 U.S. network among women 25 to 54.
Zaslav also talked up the toehold kids service, The Hub, has made against entrenched players Nickelodeon, Disney Channel and Cartoon Network, with R.L. Stine fare Goosebumps and The Haunting Hour.
As for the ratings-challenged OWN: Oprah Winfrey Network, Zaslav was "blown away" by the engagement levels for Oprah's Lifeclass on Oprah.com.

He was also upbeat about the performance of  Sweety Pie's -- which follows Robbie Montgomery, one of the original back-up singers for 1960s soul cynosure Ike and Tina Turner, who currently runs the successful St. Louis soul food restaurant of that name with her family -- on Saturday nights, where it has become the No. 1 show among African-Americans.
Zaslav also discussed Discovery's recent Netflix deal, which maintains an 18-month window from first-run series fare, a time frame he says doesn't intrude upon Discovery's affiliates' turf. He said the two-year deal term was established because --  while there hasn't been evidence to date about Nielsen degradation -- nobody really knows at this juncture about the service's potential for long-term ratings diminishment .

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