Discovery Sets Up New Unit

Oct 24, 2005  •  Post A Comment

Eager to capitalize on the potential of new platforms for short-form content, Discovery Communications has created a new media group and is fine-tuning its plans to expand into mobile and broadband content in the United States and globally.

The 20-year-old content purveyor’s new business unit has been quietly laying the groundwork in recent months for a number of deals on new distribution platforms that the group’s executives expect to finalize over the next year. Such deals are likely to include broadband services for Discovery’s brands similar to MTV Networks’ MTV Overdrive or the broadband channels Scripps Networks is developing. The new Discovery outfit also is dabbling in mobile video content, such as mobisodes and short clips to complement existing television shows.

Discovery has engaged in new media initiatives before, with its VOD slate and video clips and show outtakes on its Web sites. The new group is a formalization of those efforts that have existed in separate silos and also a recognition that big media companies need to be in all platforms.

“Clearly there is big opportunity opening up in terms of robust broadband,” said Don Baer, senior executive VP of strategy and development. He leads the new group and reports to Discovery CEO Judith McHale.

“We are looking at being much more aggressive, assertive,” Mr. Baer said. “One indication of how important this is to the company is we are focusing and organizing the energies and talents of the top people in the company.”

That includes Clint Stinchcomb, who’s now the senior VP of new media operations after serving for three years as the head of Discovery HD Theater and VOD, and Neville Meijers, now the executive VP of business strategy and new media.

New Media Focus

Last week, Discovery folded its existing 25-person iMedia broadband and Internet group in Maryland in to the new media group. The group includes about 15 others-new media staffers around the world and the company’s VOD operations.

Discovery has begun work in its Silver Spring, Md., headquarters to produce the content that will reside in alternative platforms such as mobile phones, portable devices and broadband platforms as well as video-on-demand.

In addition, the company is in talks with almost every technology player that will be active in new media platforms, Mr. Baer said. “If there is an opportunity out there, we are in those conversations,” he said.

Most media companies are looking at these opportunities as future growth engines since content can be easily repurposed, said Ian Olgeirson, an analyst with Kagan Research. However, mobile video is a “speculative market,” he said. “The mobile video market continues to be driven by hype as well as reality. That’s not to say it won’t live up to the hype. … Clearly there are a lot of folks looking at new media opportunities.”

That push is being driven by the popular notion of the “cable bypass,” which allows content providers to either reach consumers directly via broadband or through cellphones and other portable devices.

But Discovery said it doesn’t want to cannibalize the existing distributors that it has built its brands on and that the short-form content will be complementary.

“We see it as a snack as opposed to a media meal,” Mr. Stinchcomb said. The snacks will include mobisodes, promotional content, outtakes, condensed episodes and original content that is crafted specifically for new platforms.

As part of the initiative, Discovery plans to expand its Samsung partnership into portable media players. Discovery announced earlier this summer that it’s providing high-definition content to Samsung TV sets in retail outlets.

“That is really part and parcel of a larger conversation we are having with Samsung about portability of content on all kinds of devices,” Mr. Baer said.

The new Discovery unit is designed to be global in nature because Discovery will look to replicate in the U.S. many of the initiatives that are already under way overseas. For instance, the company has offered mobile content such as video, ringtones, images and fun facts with 21 carriers in 11 countries.

“Everything that has worked well in the United Kingdom and other places we will complement with U.S. offerings,” Mr. Stinchcomb said, adding that Discovery is in talks with U.S. carriers to deliver mobile video “in the immediate short term.”

That should be easy to do since staffers in Silver Spring have been readying such content. “We have people producing, writing and editing made-for-mobile content and creating short-form made-for-mobile content alongside the existing production process,” Mr. Stinchcomb said.

Fundamentally, any programmer should be exploring additional distribution models because the industry will head in that direction, but the question is when, said Adi Kishore, analyst with the Yankee Group. “There is a very strong consumer preference for viewing television on the TV,” he said.