In a conference call with Wall Street analysts, Discovery CEO David Zaslav underscored the company’s commitment to unscripted TV programming, which he described as more profitable and viable than the “commodified” scripted realm.
Scripted programming, a sector saturated with more than 500 shows, is “a high-stakes game that not everyone can win,”” Zaslav asserted. “That’s not us. We’re on the other side of the ledger.”
Discovery reported solid fourth-quarter and full-year results earlier today, also noting it had received Dept. of Justice approval for its pending $14.6B acquisition of Scripps Networks Interactive. Zaslav said the deal should formally close in just two weeks.
Continuing on the unscripted stump later in the call, Zaslav declared, “We don’t do red carpets or fancy openings.” The company, in truth, did briefly get seduced by TV’s more showbiz side a few years ago, bankrolling scripted fare like Klondike and rolling it out with great fanfare. But with ratings continuing to contract and pressure mounting on all media businesses to clarify and focus their efforts, the re-orientation has a more urgent logic to it.
Scripted programming, Zaslav added, “is like a kids soccer game — everyone is over at that ball. We’re on the other side.” With costs skyrocketing, he said, viewers in a multi-device world “are going to love The Crown at $13 million an hour but they’re not going to get service” from it. Premium programmers, including Netflix, Amazon, HBO and Showtime, he argued, “are becoming more and more commoditized.”
As viewers continue to deepen their relationships with their smartphones, Discovery believes, it will be well-positioned to serve up a steady supply of compelling programming. Scripps had already made inroads, especially on lifestyle-friendly social platforms like Instagram and Snapchat, with Food Network and HGTV titles and Discovery has also brought Group Nine Media into its orbit, tying digital brands like Thrillist and the Dodo to the cable mother ship.
The just-completed Winter Olympics in PyeongChang offered more evidence of Discovery’s capabilities, with its Eurosport unit delivering better-than-expected results across platforms. The company, essentially the ESPN of Europe, has exclusive or shared rights to the Games in many high-value international territories.
Zaslav, who rose through the industry ranks as a sales maestro, displayed some of that “always be closing” instinct when addressing the benefits the Eurosport presence will continue to bring. “We have their names. We have their credit cards,” he said. “And most important, we have the data on the sports they watch and are most passionate about.”
Beyond the unscripted focus, Discovery is also a global powerhouse, operating in 220 countries with IP it owns. As daunting as it is to be competing against tech giants like Facebook, Apple, Amazon, Netflix and Google, “If they wanted to hit a button and reach viewers globally, we’re one of the few brands that could do that.”