Discovery is eyeing the launch of a number of new global digital services involving Scripps’ food and travel content as well as branded programming blocks on its international factual channels after closing its $14.6B acquisition of the Knoxville firm. In his first interview after the billion-dollar deal closed, Discovery’s international boss JB Perrette tells Deadline that the purchase of Scripps’ “treasure trove” of content will boost Discovery’s distribution might around the world as it faces tough negotiations with pay partners around the world.
“80% of the content that they’ve created over the years and the great brands they have have not been utilized outside of the U.S. so having access to a treasure trove of strong brands and great content in high volume, which has never been taken around the world as we have done for so much of the Discovery content, is a huge windfall for us,” he told Deadline.
Following the closure of the deal, which brings together brands such as Food Network and HGTV with Discovery and TLC, Perrette’s team will be aggressively working out how best to do this internationally. He said that although some of these channels exist outside of the U.S., most notably channels in the UK and Italy, they have up until now had a small portfolio with low visibility in the outer reaches of international EPGs. Perrette, a fan of Guy Fieri’s food reality series, Diners, Drive-Ins and Dives, said that cross promotion will aid this.
“Clearly, we want to look at the three core verticals of home, travel and food and see how we can develop more global direct to consumer proposals in those genres. In some markets that might be how we do it rather than a traditional approach,” he added.
Discovery has fought a number of tough, and sometimes public, battles with pay-TV providers over the last twelve months, most notably in the UK with Sky, where the two companies had a high-profile dispute last year over the value of its carriage arrangements. Adding Scripps’ channels to its portfolio will help it drive higher fees from these talks. “We fight for fair value,” Perrette said.
There will, unfortunately, be job losses as it merges the two international divisions. In the U.S., Chief Executive David Zaslav admitted that there would be redundancies as it brings together the teams to combined total of 11,000 employees. “We have to figure out how to bring the teams together, which is an obvious and necessary step that we want to do quickly and fairly,” added Perrette.
One of the other things at the top of the to-do list will be working out what to do with British multichannel broadcaster UKTV, which is a joint venture between Scripps and BBC Worldwide. There’s been much talk in London that the commercial arm of the British public broadcaster is looking to buy out the half of UKTV, which airs series such as entertainment format Taskmaster and comedy drama Red Dwarf, that it does not own and has held talks with financial institutions about borrowing the money required to do so. Perrette said that Discovery has a “longstanding” and “strong” relationship with the BBC and will begin talks about the future of UKTV immediately. “It’s part of the discussion, now that the deal is closed we will spend more time with them and see what the options are to do with UKTV. Both of us want to figure out a way to grow and support that business, which is a great business and we have to figure out how we move that forward, which could take a lot of different shapes, it’s something that’s high on our radar.”
Perrette is in good spirits following the success of the Winter Olympics in Pyeongchang. The company’s first Olympic games was watched by 58% of the population in Europe in Discovery’s top ten markets and recorded 4.5B views, 1.7B hours of video watched and 386M viewers. He said that he “couldn’t be more pleased” with how the sports event unfolded and that it gives the company “enormous confidence” with continuing to invest in its Eurosport business.
It will have to do this without the leadership of Peter Hutton, who is moving to social media platform Facebook to lead its fledgling sports division. Perrette was quiet on Hutton’s departure, but when asked whether he was in the process of recruiting a replacement, he said “stay tuned”. Whoever does lead Eurosport may find themselves looking at getting involved in the next contest for rights to the English Premier League in three years. Although Eurosport is not bidding for the rights to the two final packages, Perrette said it was interesting that there was not the expected inflation in costs as Sky and BT picked up the majority of games. “We certainly look at the interesting developments there in terms of pricing getting a little more rationalized which is not a bad thing,” he added.