Discovery Communications President and CEO David Zaslav was interviewed this afternoon by friend and Lionsgate CEO Jon Feltheimer in honor of Zaslav’s Mipcom Personality of the Year distinction. Zaslav quipped, “Now if I have an argument with my wife Pam, I can say, ‘Well, I was personality of the year…”
In a wide-ranging discussion from the stage and later with a small group of reporters, Zaslav touched on how the market has evolved, Discovery’s $14.6B Scripps acquisition, the imminent future of skinny bundles and video, and how Discovery plans to emerge from a current tunnel in the industry stronger, and with a direct-to-customer business.
Amid all of this, Zaslav said the family of late wildlife expert and conservationist, Steve Irwin, would make a return to Animal Planet with new projects, and spoke passionately about Discovery’s commitment to animals.
“It’s part of the DNA” of the company, he said, noting that the next big endeavor, Project Cat, has as its goal to double the tiger population across 1M acres of Bhutan by 2022. Discovery is working with the World Wildlife Fund on the project. “As a generation, with the issues that we face, the stories you tell can take you around the world and try to have an impact. We don’t want these animals to die, on our watch, our shame.”
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Turning to business talk, Zaslav remarked that he sees the Scripps deal, “if it goes through” like a “traditional acquisition. They have quality brands and bundles and I think together we’ll have a lot of weight.” There is “synergy and scale” and the ability to “grow the marketshare in a meaningful way and save some meaningful content costs because we’re getting their whole library. They own content that has superfans which really aligns with us.”
Those superfans are key to Discovery, Zaslav said, “We have to create content for each screen, we own all of these 400K superfans. So how do we take all these stories and create content for their mobile screens? When we crack the code together then we can go niche by niche, but ultimately we need to figure out how to program for that or we’re going to be the old guys.”
Musing on the changes over the years since Zaslav first started coming to Mipcom, the executive said, “Cable and free to air was the only way to consume content. It was a helluva run becaue if you were the second, third or fourth choice, you were still doing quite well. But now we ask what will people watch and what will be the IP for the longterm?”
“We are buying IP for the longterm” with a view to being a means to feed the content-hungry players out there. In Europe, Zaslav says, the next big thing will be the “telcos getting into the video business and we’ve had great success partnering with them. The big platform companies need the next thing and that is content.”
The next step is taking IP direct to Discovery’s customers. “Direct to consumer, that’s the company we’re going to be. The issue is that right now we had an accelerateing business and everyone saw a dual revenue stream going on forever. Then we were in a tunnel and the question is who’s going to come out? We are working hard and are strategically confident we’ll come out faster and stronger because of what we’re doing now.”
As people continue to consume on mobile, he surmised, “this direct to customer business next to our traditional business will make us much stronger.”
Speaking of the future of bundles, Zaslav lamented that the U.S. is the only market that doesn’t have skinny versions. But he believes change is afoot. “Distributors themselves are coming to the conclusion that we have a hole in the market and we need to do a skinny bundle.” Discovery may do one with Scripps and has been talking to other providers to work with them, he said, predicting “multiple” offerings across the market in the next few months.
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