It sure didn’t sound that way late last year when Discovery chief David Zaslav said that “everyone should be concerned” about the creation of a “dominant monopsony power,” and that federal regulators should take time to investigate it “very carefully.” Or when Comcast fired back that Discovery had made “extortionate demands” in return for “Discovery’s non-opposition to the Transaction.”
But Zaslav’s singing a different tune now that the deal with Time Warner Cable has been scrapped, and Discovery prepares to negotiate a new carriage deal with Comcast — the No. 1 cable operator. He didn’t actually oppose the $45 billion acquisition, he told analysts this morning. “What we said was that we had concerns about it…That’s all behind us now.” And he doesn’t fear that Comcast CEO Brian Roberts will retaliate at the bargaining table. “The goal now is to find a deal that makes sense for both of us.”
To that end, Zaslav says that he won’t make a deal with digital distributors that might undermine pay TV. “It’s important for us to keep the existing ecosystem” where consumers must pay for channels that they don’t watch, he says.
He didn’t want to talk about Verizon FiOS’ new Custom TV package that gives subscribers the opportunity to order a lower-priced basic package without high-priced channels including ESPN. (The sports channel is suing, alleging that this is a breach of contract — a charge Verizon rejects.) But the concept of so-called skinny bundles is not “likely,” due to contractual requirements. And if the idea does take off, Discovery will be fine, he says, because it owns its programming and has “superfans” as well as “strong brands that people love.”
Still, he admits to finding Apple’s planned TV service to be “interesting” — although here, too, he didn’t want to discuss specifics.
Asked about the ad market, Zaslav says that Discovery has sold about 30% of its upfront inventory but assumes that demand will remain “tepid…We’re not getting excited.”
Yet Discovery isn’t compensating by cutting back on programming minutes to pack in additional commercials. “We’re significantly less than a lot of our peers,” Zaslav says. “For long term brand value that’s important…You won’t see us adding more minutes just to make a quarter.”