10. Discovery Channel: Going Local – Case Studies in Marketing

10

Discovery Channel
Going Local

BACKGROUND

The subsections of this section discuss the origin and background of Discovery Channel in general.1

The Roots and Growth of Discovery Channel

The beginning of Discovery Channel can be traced back to June 1985, when a company called Cable Educational Network launched a new channel in the United States, which focused on educational programmes. The first programme was called Iceberg Alley, and the channel was reportedly launched with USD 5 million in start-up capital from the British Broadcasting Corporation (BBC), an American investment firm called Allen and Company, Venture America and other investors. In the initial stages, the channel was available to approximately 1,50,000 households for a 12-hour period.2 The new channel aimed at combining entertainment with education—a strategy described by some as focusing on ‘infotainment’. Discovery offered its viewers programmes around themes relating to history, geography, science and technology, nature, etc.

The channel was extremely well received in the market, with subscriptions increasing to as much as 7 million in its first year of operations. This was no mean feat in a market such as the United States, where there were several offerings for the viewer to pick and choose from.

Another vote ofconfidence for the relatively new channel came from United Cable Television Corporation, Cox Cable Communications Incorporated and Tele-Communications Incorporated, when they chose to invest in the company. After Discovery’s early success in the US market, it was not content with limiting its ambitions. The channel chose to quickly spread its wings; in 1987, it entered into an agreement with the large Japanese conglomerate, Mitsubishi Corporation, to telecast its programmes in Japan. In the same year, the channel also began to feature 66 hours of live Soviet television, under the tagline ‘Live from the Inside’. The company’s programmes were subsequently launched in the United Kingdom in 1989 and in Latin America five years later.

The channel also diversified away from mere vanilla programming, and in 1990 it launched the first interactive video that is available over TV, which was christened ‘Discovery Interactive Library’. Thus, the channel soon came to be perceived as a pioneer in the market. This reputation was carried forward by the launch of its online service—‘Discovery Channel Online’. The aim was to move quickly into the space that the burgeoning growth of computers and the Internet were creating.

Discovery was also one of the first networks to specifically position its offerings at different target viewer segments. It acquired ‘The Learning Channel’ (TLC) in May 1991. As part of its suite, Discovery offered ‘The Science Channel’, ‘Discovery Civilization’ channel, Discovery ‘Home and Leisure Channel’, Discovery ‘Wings Channel’, etc. The success of its programmes spawned another idea—of creating a channel specifically focused on nature and animals. This was to be called ‘Animal Planet’. Another channel was created with programmes for kids, called ‘Discovery Kids’. In addition to its programmes, Discovery sold educational products and services to consumers through its Discovery Consumer Products Division.

Meanwhile, the company continued to increase its geographic spread. The channel was taken to India and Canada in 1995; to Brazil in 1996 (programmes were telecast in the primary dialect used in Brazil—Portuguese); to Germany, Austria and Switzerland in Europe; and subsequently to Turkey. In 1997, Animal Planet made its international debut with launches in the Nordic region and Central and Eastern Europe.

By this time, Discovery was doing very well; this is best exemplified by the following milestones:

  • In April 2000, Discovery Channel reached the milestone of 100 million subscribing households in 146 countries outside of the United States, bringing its worldwide count to 178 million.
  • In the September the same year, Animal Planet (the company states that this is the only channel ‘dedicated to the relationship between people and animals’ [Source: http://www.yourdiscovery.com/; http://animal.discovery.com/, accessed Nov 2010]) reached the 100 million subscribing household mark for the first time.
  • In October 2001, the channel achieved the distinction of becoming the world’s most widely distributed TV brand, reaching more than 400 million households worldwide.
  • In 2004, Discovery Communications reached the mark of 1 billion cumulative subscribers around the world.

Today, the channel claims that it is the world’s number one non-fiction media company, and that it reaches more than 1.5 billion cumulative subscribers in over 180 countries. The channel’s revenues were a tad over USD 3.5 billion at the end of 20093 through its more-than-one-hundred network channels, some of which are the following:

  • Discovery Channel
  • The Learning Channel
  • Animal Planet
  • Science Channel
  • Investigation Discovery
  • Planet Green
  • Digital media services, including www.howstuffworks.com

Discovery Channel’s Launch in India

Discovery Networks Asia–Pacific was first established in 1994 with the launch of the Discovery Channel,4 and it was shortly afterwards that Discovery first entered the Indian market. At that time, Indian consumers were just waking up to the full potential of cable TV. They were used to the single channel hitherto offered by the national TV network, Doordarshan, named DD 1. In metro cities, Doordarshan offered a second channel as well, called DD Metro.

Most of Doordarshan’s channels focused on news and information pertaining to local and national issues, and programmes were mostly in the national language Hindi (and local languages in the various states of India). The DD Metro channel did offer some programmes in English, often under license from foreign TV networks, such as Transtel.

Some soaps shown on the national network, such as ‘Hum Log’ and ‘Buniyaad’, had become extremely popular with the Indian audiences. Along with the phenomenal success of Ramanand Sagar’s Mahabharata (when the whole country used to shut down for an hour every Sunday morning to watch the serial), these programmes did point to the latent market in India for TV programmes and the related revenues from advertising that broadcasters could hope to garner.

The Indian market was subsequently exposed to cable TV from the early 1990s, especially as STAR TV began to spread its wings. The market evolved gradually, along with the increasing penetration of TV sets into the rural hinterland and the adoption of cable TV. It was also important to note that in rural areas, a single TV set was often viewed by a number of people, that is, viewership was by a ‘community’ rather than a single household. This was especially true of popular serials or cricket matches.

THE ISSUE

Discovery was perhaps the first channel to provide infotainment in India, with its programmes on themes relating to nature, history, science and technology in English.

There were some inherent advantages that a channel such as Discovery had the following features:

  • Its content was substantially different from the family dramas and soap operas that Indian audiences were used to and the channel thus offered the Indian audience a much-needed change.
  • Parents were happy with the nature of the programmes, since they were perceived to have a positive influence on children and provide them with educational material.

However, there were some disadvantages as well. In particular, Discovery faced the problem of positioning. It was perceived as a niche or specialty channel, rather than one aimed at a wider audience. In addition, the fact that most of its programmes were aired in the English language meant that the market was relatively limited.

There were also some issues pertaining to its distribution. When the channel decided to charge a small amount (Rs. 5 per household), operators stopped airing the channel, thereby impacting Discovery’s reach. It was the channel’s loyal audience that bailed it out; when consumers started demanding the channel, cable operators were forced to resume airing the channel. This demonstrated that at least among its viewers, the channel had made a mark. The question now was about increasing the viewership base.

How was this to be done? It was this dilemma that was of concern to the executives of the channel. Even the former Managing Director (MD) of Discovery, Kiran Karnik, reportedly stated that Discovery India had to rework on its brand positioning, and stated his intentions to undertake an extensive advertising and brand building exercise to change the channel’s brand image in the country, while aiming at increasing its reach.

Market research studies commissioned by the channel reportedly highlighted the following:

  • Discovery’s viewers were largely educated middle-aged males from urban areas (the age group of 25—54 constituted the channel’s largest audience).
  • A very large percentage of its audience comprised members from the upper echelons of society, especially from among the socioeconomic classification (SEC) A and B groups.
  • Due to the nature of its programmes, the channel had struck a chord with both kids and their parents. However, it was also true that Discovery was regarded as a ‘serious channel’.

The research also highlighted the fact that the channel needed to further re-position itself, reach out to its target audience better and be more responsive to its viewers. Another key issue that needed to be quickly redressed was that viewers were not adequately aware of the programme content and about broadcast timings.

How could the channel address these issues?

INDUSTRY DATA

The industry data considered by the case study is presented in the following subsections.

Major Milestones in Discovery Communications’ Journey

The major milestones achieved by Discovery Communications are listed as follows:5

1 September 2008:

Discovery Communications commences trading as a public listed company on the NASDAQ stock exchange in the United States.

1 June 2008:

Discovery Home Channel becomes Planet Green, the first 24-hour eco-lifestyle TV, reaching 50 million homes.

1 February 2008:

Discovery HD is launched in Australia; Discovery is now the number one international provider of high-definition (HD) networks with services in 17 markets outside of the United States, which are Australia, Austria, Belgium, Canada, Denmark, Finland, Germany, Hong Kong, Ireland, Japan, the Netherlands, Norway, Poland, Singapore, South Korea, Sweden and the United Kingdom, reaching more than 4 million subscribers.

1 January 2008:

Discovery Communications announces a joint venture with Oprah Winfrey and Harpo, Inc., to create OWN (the Oprah Winfrey Network), a multi-platform venture combining Discovery Health Channel and www.oprah.com.

1 December 2007:

Discovery Communications acquires www.howstuffworks.com, the leading online source of high-quality, unbiased, and easy-to-understand explanations of how the world actually works.

1 December 2007:

Annual revenue for the Discovery Networks International division surpasses USD1 billion for the first time.

1 December 2007:

Discovery Holding Company and Advance/Newhouse Programming Partnership sign a non-binding Letter of Intent to combine their stakes in Discovery Communications, thus creating a new public company.

1 August 2007:

Discovery Communications acquires www.treehugger.com, a leading eco-lifestyle Web site.

1 July 2007:

Discovery Communications earns 18 nominations, the most ever, in the 59th Annual Primetime Emmy Awards.

1 May 2007:

The Discovery Channel’s epic Planet Earth series of 11 episodes becomes cable’s highest rated natural history programme of all time and the most-watched cable event of all time, attracting more than 65 million viewers.

1 October 2006:

Animal Planet Media acquires www.petfinder.com, the number one online destination for pet adoption.

1 September 2006:

Discovery Communications launches DMAX in Germany, its first free-to-air TV network.

1 April 2006:

Discovery Communications brings video content to Google Earth.

1 January 2006:

Discovery Communications announces the launch of the 100th and 101st Discovery networks with the launch of Discovery HD Japan and Discovery HD Canada.

1 January 2005:

Discovery Wings Channel transitions to the Military Channel.

1 January 2005:

Discovery becomes the title sponsor of the Discovery Channel Pro Cycling Team, featuring the famous Tour de France winner Lance Armstrong.

1 December 2004:

Discovery announces its plan to roll out the international HD network, Discovery HD, worldwide.

1 October 2004:

Discovery adds international lifestyle networks to its portfolio in the form of three Discovery lifestyle networks: Discovery Travel & Living, Discovery Home & Health and Discovery Real Time.

1 March 2004:

Discovery Communications creates its fourth division, Discovery Education.

1 March 2004:

Discovery Communications reaches a billion cumulative subscribers around the world.

1 October 2003:

‘Trading Spaces: 100 Grand’ draws over nine million viewers—the highest-rated show in the history of TLC.

1 October 2002:

Discovery Kids and NBC partner to create a three-hour programming block, Discovery Kids, on NBC, on Saturday mornings.

1 June 2002:

Discovery Communications launches Discovery HD Theater, one of the first 24-hour HD channels in the world.

1 April 2002:

Discovery Communications and The New York Times Company form a joint venture and launch the Discovery Times Channel (rebranded from Discovery Civilization).

1 October 2001:

Discovery Channel becomes the world’s most widely distributed TV brand, reaching more than 400 million households worldwide.

1 September 2000:

Animal Planet’s global reach breaks the 100 million subscribing household mark.

1 April 2000:

Discovery Channel reaches 100 million subscribing households in 146 countries outside of the United States, bringing its worldwide count to 178 million.

1 April 2000:

Discovery Channel’s ‘Walking with Dinosaurs’ breaks the all-time cable ratings record set by ‘Raising the Mammoth’.

1 March 2000:

Discovery Channel breaks the all-time cable ratings record with the premiere of ‘Raising the Mammoth’.

1 August 1999:

Discovery Communications launches Discovery Health Channel.

1 March 1998:

Discovery Communications forms a global joint venture with the BBC.

1 December 1997:

Discovery acquires the Travel Channel.

1 July 1997:

Animal Planet makes its international debut with launches in the Nordic region and Central and Eastern Europe.

1 August 1996:

Discovery Communications announces plans to launch five new digital networks:

□ Discovery Science

□ Discovery Kids

□ Discovery Civilization

□ Discovery Home & Leisure

□ Discovery Wings

1 June 1996:

Discovery Communications acquires The Nature Company’s 114 retail stores and launches Discovery Channel Stores.

1 June 1996:

Discovery Communications launches Animal Planet, the only channel dedicated to the relationship between people and animals.

1 February 1994:

Discovery Channel is launched in Latin America.

1 January 1994:

Discovery Channel is launched in Asia.

1 April 1992:

Discovery airs ‘In the Company of Whales’, which was filmed in 15 countries and several oceans across the planet.

1 May 1991:

Discovery acquires TLC.

1 September 1989:

Discovery Channel airs its first original programme, ‘Ivory Wars’.

1 April 1989:

Discovery Channel is launched in the United Kingdom by Discovery Networks International.

1 July 1988:

‘Shark Week’, the first-ever branded programming stunt on cable TV, is telecast.

1 February 1987:

Discovery Channel airs ‘Russia: Live From the Inside’, providing Americans 66 hours of live Soviet television.

1 June 1985:

Discovery Channel is launched by John Hendricks, Founder and Chairman, with 1,56,000 subscribers in the United States. The first programme aired by the channel is ‘Iceberg Alley’.

Table 10.1 enlists Discovery Channels programmes and their timings in india.

 

Table 10.1   enlists Discovery Channels programmes and their timings in india.

8:00 p.m. South Pacific: An Ocean of Islands
9:00 p.m. Raging Planet: Lightning
10:00 p.m. A Haunting (Season 4): The Apartment
11:00 p.m. Tiger Kill
12:00 a.m. South Pacific: An Ocean of Islands
1:00 a.m. Telebrands
1:30 a.m. Telebrands
2:00 a.m. South Pacific: An Ocean of Islands
3:00 a.m. Raging Planet: Lightning
4:00 a.m. A Haunting (Season 4): The Apartment
5:00 a.m. Telebrands
5:30 a.m. Telebrands
6:00 a.m. Deadly Waters
7:00 a.m. A Bengal Tiger’s Motherly Love
8:00 a.m. Pig Bomb
9:00 a.m. Into the Unknown with Josh Bernstein: Timbuktu
10:00 a.m. Man Made Marvels: Shanghai World Expo
11:00 a.m. Mystery of the Taj Mahal
12:00 p.m. Anacondas with Nigel Marven
1:00 p.m. A Life Tailing Tigers
2:00 p.m. Great Indian Rhino
3:00 p.m. Clever Monkey
4:00 p.m. Wildlife Specials: Eagle: Master of the Sky
5:00 p.m. Big Cats: Secret Lives
6:00 p.m. Meerkats with Nigel Marven
7:00 p.m. A Life Tailing Tigers
8:00 p.m. Rhodes Across India

Discovery’s overall global portfolio6 includes the following:

  • Discovery Channel
  • Animal Planet
  • TLC
  • Discovery Health
  • Discovery Kids
  • Discovery Education
  • Discovery News FitTV
  • HD Theater
  • Investigation Discovery
  • Military Channel
  • Planet Green
  • Science Channel
  • Turbo
  • Consumer Guide Auto
  • Consumer Guide Products
  • HowStuffWorks
  • Petfinder
  • TreeHugger
CLASS DISCUSSION

After distributing the material given in the section ‘Industry Data’, the faculty is requested to initiate the discussion in class and help the students resolve the issues.

CASE RESOLUTION: DISCOVERY CHANNEL’s STRATEGY IN INDIA

In spite of the gains that cable TV had made in the 1990s, the national broadcaster, Doordarshan, still reached the largest number of homes. Thus, Discovery hit upon a plan—why not strike a partnership with Doordarshan?

Indeed, this was what Discovery did. In order to reach a larger set of people and build awareness about the nature of its programmes, the channel began to air some of its programmes on DD for two hours in Hindi. The latter was particularly important, for a large number of people in the country did not understand English, which was still perceived as the language of the elite.

One may ask at this stage as to why Discovery chose to strike a partnership with a network that could certainly be called a competitor? The reason was simple: The benefits outweighed the negatives. People who had hitherto not been exposed to Discovery’s programmes now had a fair idea of the channel and its offerings. The strategy of a two-hour slot for Discovery was akin to handing out free samples to consumers, with the same objectives. Once the consumer was ‘hooked’, Discovery hoped that consumers would wish for more and be willing to sign up as subscribers.

However, a new problem soon arose. Although the Hindi programmes were extensively watched in the northern states of the country, where Hindi is the primary language, the programmes failed to break through the language barrier in other regions, particularly the southern and eastern parts of the country. Regional languages, such as Bengali (in the east) or Tamil, Kannada and Malayalam (in the south), were clearly preferred here, and viewers were not drawn to programmes in Hindi.

This resulted in a further tweak in Discovery’s strategy—the launching of some of its programmes in regional languages. A beginning was made when, in 2000, the channel inked a revenue-sharing agreement with the Tamil channel Vijay TV.7 The strategy adopted vis-à-vis the agreement with Doordarshan was replicated—a few hours of Discovery programmes in Tamil were provided regularly to the Tamil channel. In 2001, the timings were from 5:30 p.m. to 6:30 p.m. every Tuesday and Thursday and from 3 p.m. to 5 p.m. every Saturday.8 Both channels were to share the revenues earned through advertisements.

However, the consumer still did not bite. Discovery soon came to the humbling conclusion that that the perception of Indian viewers towards Discovery had not changed yet and it was still perceived as a niche channel meant for a select few interested in wildlife and nature.

Meanwhile, the then MD Kiran Karnik stepped down, and was replaced by Deepak Shourie. One of the first initiatives of the new MD was to try and understand the Indian audience and their perceptions better. Accordingly, Deepak Shourie commissioned a market research agency to come up with insights.

As mentioned earlier, the research reportedly highlighted the following:

  • Discovery’s viewers were largely educated middle-aged males from urban areas (the age group of 25—54 constituted the largest audience).
  • A very large percentage of its audience comprised members from the upper echelons of society, from among the SEC A and B groups.
  • Due to the nature of its programmes, the channel had struck a chord with both kids and their parents. However, it was also true that Discovery was regarded as a ‘serious channel’.

The research also highlighted the fact that the channel needed to further re-position itself, reach out to its target audience better and be more responsive to viewers.

A key issue that needed to be quickly redressed was that viewers were not adequately aware of the programme content and broadcast timings. It appeared that communication about the large range and variety of programmes on offer had to be enhanced. In addition, the image of the channel could also be changed: It needed to shed its ‘serious’ tag and become more accessible and entertaining.

The two issues were perhaps closely linked. For Discovery did offer a variety of ‘fun’ programmes. One of these was ‘Junkyard Wars’ for kids, which had a competition between two teams to build a machine out of scrap found in a junkyard; another was ‘Fabulous Fortunes’ for middle-aged people, which focused on examining the various sources of wealth relevant in the twentieth century, and even the programme called ‘Understanding Sex’ for teenagers. The issue, therefore, seemed to be a gap in communicating the availability and content of such programmes to the audience.

Accordingly, Discovery came up with a new initiative to reach out to its viewers. This was christened ‘My Time on Discovery’. The programme content was to be based on feedback about what the viewer wished for and on their needs and viewing habits. The MD, Deepak Shourie, stated: ‘The concept of “My Time on Discovery” recognizes the viewing convenience of each family member individually and collectively, by giving them what they want from Discovery at the time that they want it, while still catering to the family as a whole. In this way the new viewer response will be “Discovery is a must watch for me”, and in the process provide advertisers a focused platform to reach out to their key target groups.’9

The programming blocks were designed to appeal to all categories of viewers. There were to be six such blocks. Between Mondays and Saturdays, there were the following blocks:

  1. ‘Sunrise’, from 7 a.m. to 9 a.m.
  2. Discovery Kids, telecast for an hour between 3 p.m. and 4 p.m.
  3. ‘Action Zone’, 4 p.m. to 5 p.m. with a repeat telecast at 11 p.m.
  4. ‘Prime Time’, from 8 p.m. to 11 p.m., which generally had the maximum viewership

There was also the ‘Friday Showcase’, between 9 p.m. and 11 p.m., and the ‘Super Sundays’ from 7 a.m. to midnight.10

The aim was to have something for everyone: Programmes such as ‘Tech Tuesday’ reached out to those interested in the latest technological developments and state-of-the-art gadgets from new mobile phones to spy gadgets. Then there was ‘Superstructures of the World’ for those fascinated by tall buildings or interested in architecture, ‘Alternatives for Fertility and Childbearing’ for interested mothers, etc.

Later in 2002, the six-time bands were extended to nine, with the introduction of ‘Woman’s Hour’, ‘Amazing Animals’ and ‘Late Night Discovery’. The bands also served the purpose of better communicating the content of the programmes to the audience. Viewers could know what to expect from the programmes aired in each band and could wait for programmes dealing with their areas of interest.

In addition, the wide range of offerings also brought to the fore the ‘something for everyone’ aspect. While Discovery was now competing with the National Geographic channel, the nine bands reinforced the greater variety that Discovery offered. In the words of Deepak Shourie, ‘National Geographic is more nature oriented. We have a much wider range.’11

Discovery’s initiatives proved fairly successful. By August 2002, its viewership among women and kids increased by a shade over 20 per cent, while its prime time viewership surged by twice this amount. Clearly, the distinct offerings of the channel had made a mark.

Marketing Initiatives

Getting the product portfolio, in this case the range of programmes, right is just a part of the story. Along with the product, good marketing is also crucial. Discovery did not miss this point. The channel conducted an annual quiz for school students across the country to increase awareness about the channel among kids, a key target audience for some of its programmes. The company clearly believed in ‘catching them young’. The quiz was hosted by the well-known quizmaster, Derek O’ Brian, and covered five categories of the channel’s programmes:

  1. Science and technology
  2. Human adventure
  3. History
  4. Nature
  5. World culture

A popular quiz focused on Discovery’s programmes was a great idea towards the aim of increasing awareness and garnering market share. Advertisers only needed to see the buzz that the quiz was creating to be convinced that Discovery had achieved a substantial market share among the youth.

Besides the quiz, there were other initiatives. The company struck a partnership with Canon India Ltd., the well-known maker of cameras. Discovery’s personnel conducted imaging contests in several dozen schools in major metropolitan cities: Delhi, Mumbai, Hyderabad, Chennai, Bangalore, Pune and Ahmedabad.

Then there was the ‘Discovery Exhibition’. Students from middle school (classes VI to IX generally) were required to watch the popular programme called ‘Popular Mechanics for Kids’ and then themselves build some mechanical device under supervision. There were also contests for all its viewers. The idea was to enhance the level of ‘interactivity’ and connect with the channel’s viewers. In the ‘Win with Discovery Channel Contest’, viewers could register themselves online and become eligible for a lucky draw held every month.

In order to better create awareness about the content of its programmes and their timings, the channel provided programming guides to viewers, which were aimed at providing information about Discovery programmes on a quarterly basis. This was pioneered in association with the India Today magazine in the second half of 2002. Subsequently, in 2003, Discovery continued the same procedure with the Businessworld magazine.

This was supplemented with direct mailers to viewers detailing the channel’s offerings and extensive advertising. Commercials featuring Discovery were aired on other TV channels and supplemented with outdoor advertising.

Discovery decided to keep its offerings fresh and contemporary. This meant constantly updating its portfolio of programmes; accordingly, the channel decided to source content from its other channels across the globe. For example, Discovery announced the launch of ‘The Blue Planet’ in 2003, co-produced with the BBC, which featured life in the world’s seas and oceans. The channel also aired a special on the Second World War, profiles of historical personalities such as the German Bismarck, ‘Great Romances of the 20th Century’, etc.

The usage of programmes that had been produced abroad also cut down costs; channel executives reportedly stated that producing a programme in India cost approximately a million-and-a-half USD, and revenues in India did not match the costs incurred for such production. However, there were certainly offerings relevant to India. In 2003, Discovery announced that it would air as many as 18 films made by world-renowned producers that are relevant to the Indian audience. Some of these films are as follows:

  • Himalayas: Descending India
  • Great Cats of India
  • Buddha’s Mountain Wilderness
  • Immortal Capital: Many Cities of Delhi
  • Konark: Chariot of the Sun
  • Arthur C. Clark’s Mysterious India
  • Wild and Dangerous

Discovery did not neglect its regional language initiatives. With an aim of enhancing its presence in South India, the channel announced that it would launch a 24-hour feed in Tamil. In March 2002, it decided to end its arrangement with Vijay TV and began to air Tamil language programmes in the prime time slot of 8 p.m. to 10 p.m. on weekdays.

However, it was not as if the company had decided to set aside the partnership route and venture forth alone. Where partnerships or joint ventures were thought to be beneficial, the channel did not hold back. For example, in June 2002, with the objective of increasing its distribution reach, Discovery established a joint venture with Sony Entertainment Television (SET). The JV was called ‘SET Discovery’ and Sony held a majority share of 76 per cent.

Discovery also chose to be part of the ‘One Alliance’ network. This consisted of a bouquet of six channels: Sony, CNBC, Animal Planet, Sony Max and AXN, besides Discovery. According to reports, the alliance was supposed to help Discovery increase its reach by as much as 33 per cent.

RESULTS

The channel reportedly announced in 2002 that it had registered a creditable 50 per cent increase in advertisement revenues. Analysts attributed this to the channel’s decision to air its programmes targeted at certain audience segments in a focused manner, particularly through the ‘My Time on Discovery’ initiative.

Today, Discovery Networks Asia—Pacific boasts of 458 million cumulative subscribers across 32 countries.12 It offers seven networks brands:

  1. Discovery Channel
  2. Animal Planet
  3. Discovery Travel & Living
  4. Discovery Home & Health
  5. Discovery Science
  6. Discovery Turbo
  7. Discovery HD

However, some concerns remain. First, the absence of sufficient locally-produced programmes and content relevant to India can prove to be a disadvantage as time progresses, especially if competitors are able to bridge this gap. Discovery Networks is certainly making efforts to address this issue.

Second, direct competition is catching up. National Geographic has stated that it would increase its range of offerings and air programmes that are not based on wildlife on its channel. Also, indirect competition will become an increasing challenge. Specialty channels such as Cartoon Network, Hungama TV, CNBC, etc. are all competing for the viewers’ eyeballs, and many new channels are slated for launch.

The question is whether Discovery can obtain increased viewership and revenues in the country or will it struggle to just retain its existing share. This is the new challenge faced by company executives. What can they do in the future?

DISCUSSION QUESTIONS
  1. In a scenario where competition continues to increase substantially, how can Discovery Channel continue to make a mark and retain its audience?
  2. What can its strategies be to differentiate itself from competition?
  3. What new promotional strategies can the channel come up with?
  4. Is there any way to increase revenues except through airing advertisements during its programmes?
ANNEXURES

 

Table A1   Discovery Channel Subscribers13

 

Table A2   Discovery Channel’s Financial Results14