APRIL 09, 2007 – It was fitting that Discovery Communications elected to hold its April 5 New York upfront presentation inside Frederick P. Rose Hall, the Columbus Circle performance space that was designed specifically for jazz concerts. Heading into the annual ad-sales maelstrom with significant ratings momentum and a new chief executive at the podium, Discovery used its two-and-a-half hours of stage time to trumpet its upcoming programming slate while riffing on the strength of its brand equity.“The real message is: Discovery’s back,” said Joe Abruzzese, president of ad sales for the company’s U.S. networks group. Speaking just a few hours before taking the stage at Rose Hall, Abruzzese reflected on how far Discovery had rebounded after a disastrous two-year ratings slide at the flagship channel and TLC left both nets reeling.From the first quarter of 2004 through early 2006, TLC saw nearly 40 percent of its prime-time audience disappear, while close to 45 percent of adults 25-54 abandoned ship. At the same time, Discovery’s nightly ratings shriveled by 20 percent and fell another 30 percent in the channel’s core demo.“It was terrible, absolutely awful. But we did a lot of work to get back on track,” Abruzzese said. “With Discovery, we went back to our roots and that’s paying off in ratings.”
Both networks began digging out last year, and recent programming events—like the high-definition spectacle Planet Earth—have helped bring back a lot of AWOL viewers. In the first quarter of 2007, Discovery grew its prime-time audience 23 percent versus the year-ago period, averaging 1.36 million total viewers, while raising its share of adults 25-54 by 18 percent to 695,000. Historically, the channel also enjoyed its youngest quarter, dropping its median age to 36, down from just over 43 in 2005.
For the 2007-08 TV season, Discovery will return four original series, including Dirty Jobs, Mythbusters and Deadliest Catch, while also bringing back a number of special programs, including the documentary series Discovery Atlas and Koppel on Discovery.
“There’s not a lot of room on the schedule for many new shows, and that’s a testament to the strength of our returning series,” Abruzzese said. “But we don’t really need wholesale changes from a sales perspective.”
While the calculus of the ad marketplace doesn’t necessarily match ratings growth and CPM increases in a one-to-one correspondence, Abruzzese has been able to capitalize on the resurgence. In its fourth-quarter earnings statement, Discovery reported a revenue increase of 16 percent versus the same period in 2005, up to $516 million, thanks in large part to a 14 percent increase in ad revenue.
Abruzzese said scatter has been so strong for Discovery that he has even managed to write a lot of business with domestic auto advertisers, a category that has all but flatlined in the last several quarters. “Ford has done a number of big buys with us in the second quarter. Right now, they’re one of TLC’s biggest sponsors,” he said.
While new Discovery Communications president and CEO David Zaslav played the only solo of the night, opening the presentation with a summary of the company’s place in the overall media universe, he quickly ceded the spotlight to Abruzzese and a succession of network general managers and series personalities. Though he’s by no means a shrinking violet––in the five months since taking the helm, Zaslav has effected a major restructuring and sold off the Travel Channel, Discovery’s fourth-largest network––much of the new programming slate was greenlit by his predecessor, former networks chief Billy Campbell.
Instead of introducing the new shows earmarked for all 14 Discovery nets, Zaslav stuck to the big picture, talking up the company’s global reach, its digital-media platforms and what he called “brand entitlement.”
“On the surface, it may look like we’re a traditional media company, but we’re vastly different from the typical content guys,” Zaslav said in an interview just prior to the upfront presentation. “We own all of our content. We don’t have any off-net stuff. You can buy content from broadcast, and while that can get you ratings, it won’t do anything to your brand appeal.”
In order to keep the fires burning under the ratings, Zaslav said that he’ll invest in even more original programming, while boosting the marketing and new-media budgets. “I’m on a mission to fight down operational costs and put the money we save back into what goes on our air and on our platforms,” he explained.
(Although Discovery does not comment on personnel matters, another round of layoffs could come as soon as today, affecting an estimated 300 employees worldwide.)
As Abruzzese and his team begin gearing up for the long-haul sales call, preliminary response to Discovery’s message has been encouraging. “On the programming front, it all looked pretty good,” said MPG CEO Charlie Rutman, who was on hand for the April 5 presentation. “The various networks are clearly defined and some of the programming is extremely provocative and intriguing.”
Rutman’s interest was particularly piqued by the flagship net’s projected series of specials and films celebrating NASA’s 50th anniversary, and an upcoming Koppel special, Living With Cancer (May 6), a series of conversations between the newsman and his long-time executive producer and friend Leroy Sievers, who has been diagnosed with stage-IV colon cancer.
“There are internal factors that only Discovery can control, and that’s putting great shows on the air and marketing them so that they reach the greatest potential audience,” Rutman said. “If they can do that—and up and down the line, they appear to be doing a very good job lately––then we’ll take care of the rest.”