Four months after closing the $14.6 billion acquisition of Scripps Networks Interactive, Discovery brass held their first TCA executive session, making the case for the company’s expanded footprint and focus on unscripted content its owns around the world.
CEO David Zaslav appeared onstage with other top execs Nancy Daniels, Kathleen Finch and Susanna Dinnage. He said that in a climate of dramatic consolidation, Zaslav said the Scripps deal gives Discovery the scale it needs.
“We’ve placed a lot of chips as bets that a lot of our competitors haven’t,” he said. “We feel good about where we are right now.” After the session, he told Deadline that no other major deals are likely soon, saying that the new focus is paying down debt, which he said is happening ahead of schedule.
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Zaslav cited the decision of 21st Century Fox to sell its studio and cable network assets to Disney as a signal that the status quo is not going to hold.
“You get one of the great leaders in our industry, Rupert Murdoch, saying he’s going to sell,” he said. “Initially, we were surprised. But then we realized the competition of Amazon, Apple, Netflix. The competitive nature of that side of the business has really changed. … We really see two sides: One side is scripted TV and movies, and we’ve moved away from that. It’s great companies competing against each other, and eventually they’re all going to have [streaming] offerings for $10 to $15 a month with scripted series and movies.”
He added, “We see what we have as everything else,” describing the goal of producing “content that people would pay for before they’d pay for dinner.”
Asked about the company’s stated plans for a major direct-to-consumer streaming offering, Zaslav said the effort is ongoing but he didn’t offer any new specifics. He noted that Discovery has seen significant traction from things like AT&T’s Watch bundle, where it has eight of the 30 networks offered. In the realm of skinny bundles, “There’s a lot that’s happening that’s very encouraging,” Zaslav said.
He singled out AT&T, under CEO Randall Stephenson, as one of the innovators, rolling out DirecTV Now and the even-skinnier Watch bundle, which features eight Discovery networks out of the 30 offered.“It’s quite clever what Randall is doing,” Zaslav said. “It’s going to be a journey but we’re excited.”
One area where Discovery can leverage the full portfolio is cross-promotion, Zaslav said. On a given night, the company is capturing 25% of the total female audience watching television. “We have the ability day-and-date to tell people on Food Network that something great is going on over on TLC,” he said.
Kathleen Finch, Chief Lifestyle Brands Officer, said the programming teams are also becoming more tightly integrated. “Food Network leaned in with Nancy to have fun with Shark Week. It’s been fun to get our teams together and say, ‘How can we have fun with this creatively?'”
Asked how the linear networks in the Discovery portfolio can fare in a world of show-centric promotion and apps, not networks, increasingly a draw, she said, “We are the apps of television.” By providing a reliable source of consistent programming 24 hours a day that is globally owned by Discovery, “It is building us a moat.”
Daniels, the chief brand officer for Discovery and Scripted, said the Discovery Channel will not return to the scripted efforts spearheaded by previous chief Rich Ross. “We did two big scripted projects, but at the end of the day, we decided there’s a lot of scripted programming out there. It’s really hard to break through. We decided to what we do best and that’s non-fiction.”
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