It’s been a busy year for Discovery Communications (NSDQ: DISCA) and its CEO David Zaslav, who took the job in January. In August, the company made two digital acquisitions: TreeHugger for $15 million and then HowStuffWorks for $250 million. But this isn’t just a case of a cable network trying to “get digital”, but rather, as Zaslav explained, these sites will play an important role in getting increased value from the company’s assets.
– The challenge: “When I went to discovery, I thought it was a traditional cable company…” but Discovery has a number of different drivers for growth. The challenge has been to raise the awareness of channels that are already in millions of homes…Example: PlanetGreen to launch in 2008 in 52 million homes, will leverage TreeHugger to gain brand awareness.
– Growth: Five of the company’s channels are on the digital tier, and the digital tier is still growing, so that provides automatic growth. Science Channel the next History Channel. Ratings are up 100 percent. On PlanetGreen, Zaslav said the channel, “Reminds me of Fox News.” Sounds odd, but his point is that the site can be an advocacy channel, and galvanize an audience the way Fox News has capture the right.
– HowStuffWorks: Discovery has huge, long tail, library, but if people are migrating their curiosity to the Web, “where are we?” He noticed: “Every time I typed in a word, at the top of the page was HowStuffWorks” HowStuffWorks was satisfying curiosity on the web, but it had no video. Shows example: searches HDTV on Google, (NSDQ: GOOG) HowStuffWorks is #2 on Google, right behind Wikipedia. Because of its high ranking and engagement (with video), the site now has great opportunities for selling to marketers.
– Gaming: Opportunities to turn Discovery brands into games
– Writer’s strike: Network benefits when the broadcasters don’t have much fresh in terms of originals. To the extent that the writer’s strike impacts the creation of new network programming, Discovery can benefit.