Discovery’s Ratings Set Ad Market Bar Higher

Apr 2, 2007  •  Post A Comment

Discovery Communications is planning new original shows for its high-definition channel, part of a strategy to rev up advertising sales for the network as the company heads into its upfront presentation for media buyers this week.

The new offerings that Discovery HD Theater will unveil at the event in New York include shows on heli-skiing, a Kazakh tribe and a new twist on the “Sunrise Earth” series.

The HD channel is part of a family of networks that made a big turnaround in 2006 after suffering steep audience declines the year before. Analysts expect ad revenue to mirror the rating trends.

“I think we’re positioned as well as we have been positioned probably in about three or four years because the markets have been good and our ratings have outpaced the market, said Joe Abruzzese, president of ad sales for Discovery. “We should do well. If we don’t, shame on us.”

Discovery Channel, the 12th-ranked cable network in total viewers in 2006, increased its viewership 23 percent last year, and TLC, the 27th-ranked network, was up 13 percent. Other Discovery Communications channels include Animal Planet, Discovery Health and the Science Channel.

Merrill Lynch media analyst Jessica Reif Cohen said she expected Discovery to be the biggest winner in the upfront among the cable networks because of its “significant ratings recovery.”

One rival sales executive, however, questioned whether a network like Discovery, which already commands high prices for its commercials relative to the competition, would benefit much from its ratings gains. An increase in Discovery’s supply of ratings points to sell might exceed demand, preventing the channel from raising rates, he said.

This year’s upfront is the first that Discovery will go through with new CEO David Zaslav, who took the job in November, replacing Judith McHale. Mr. Zaslav, who jumped ship from his post as NBCU president of cable and domestic TV, has instituted a sweeping reorganization that purged company president Billy Campbell and several others.

While Discovery HD Theater constitutes only a small part of Discovery’s overall sales, advertising on the network has been growing rapidly. Revenue has doubled over the past few years as the number of advertisers creating HD commercials has increased, said Harold Morgenstern, senior VP of ad sales.The number of HD Theater clients has increased to 40 from 22 in 2005 and Discovery expects to hit 65 clients in 2007. The top categories are electronics, movies, automotive, financial, travel and alcohol.

Across all its networks, Discovery does business with some 400 advertisers.

“We need more clients to do HD commercials,” said Mr. Abruzzese. “That’s the stumbling block right now, the cost of producing in hi-def.”

The channel, which boasts about 10 million subscribers and reaches almost all HD homes, offers advertisers low clutter, with one break per hour, and opportunities to do long-form content, Mr. Morgenstern said.

Programming on the channel is designed to get viewers more involved with the shows, said Clint Stinchcomb, executive VP and general manger, Discovery Emerging Networks.

For the first time, the network has a personality hosting one of its shows. In “Wildlife Man,” David Ireland travels the world catching snakes, wrestling boars and swimming with whales.

Other new series include “Soul of a River,” a four-part documentary on the Mekong River in Southeast Asia; “Antarctic Mission,” shot aboard an oceanographic sailing ship, and “Emergency Management Director,” which follows the work of people who respond to weather related disasters.

Specials look at the Kazakh tribe of western Mongolia, heli-skiing, and the “Real X Men,” people with special powers.

HD Theater is bringing back “Sunrise Earth” for a fourth season — with a twist. An online vote will determine where this year’s five episodes will be shot. One viewer will win the opportunity to travel to the location and shoot the sunrise of his or her choice.

At this point in the network’s development, it needs more than sharp pictures to hold its audience.

“What keeps viewers coming back is the promise of new great content,” Mr. Stinchcomb said. “We want viewers who started watching four years ago to be as immersed in the network as someone who started watching four weeks ago.”