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Zaslav: For Niche Players, It’s All About the Brand

12/08/2006 7:00 PM Eastern

New York— Niche networks such as Discovery Channel need to focus on strengthening their brands, which will lead to higher affiliate fees and advertising revenue, NBC Universal Cable and Domestic Television and New Media Distribution president David Zaslav told an investor conference here last Tuesday.

Zaslav, who is slated to become CEO of Discovery Communications early next year, told the audience at the UBS Global Media & Communications conference that brand development can often be more important than ratings.

For niche channels like Discovery, high ratings aren’t as important as strengthening the overall brand, Zaslav said. His comments come at a time when Discovery’s ratings are picking up, but are still down from the early part of the decade.

“You have to evaluate what your brand is, and sometimes it’s not going to be about getting the highest rating,” Zaslav said. “What’s the rating of [HGTV]? If you do an OK job, it’s 0.6; a great job, it’s a 0.8; and if you do a not so good job its a 0.4 or 0.5. Home and Garden may never be a 1.4 network. If you try to make some of these niche channels too broad, then you are going to get outside of what you are. The focus really isn’t about just growing the ratings, because that sort of misses the point.

“If Sci Fi [Channel] can deliver a 0.8 rating with an audience that is really solid with a strong demo, you’re going to get a higher CPM, you’re going to have a much happier audience that is going to watch for a lot longer, you’re going to be able to take that content and monetize it on a series of platforms much more effectively because its going to be coherent and clear and you’re going to be able to build the economics of your business significantly,” he continued.

Zaslav added that it is equally important for networks to take advantage of digital distribution platforms like the Internet and mobile devices like Apple Computer’s iPod and cell phones, even in the absence of a defined revenue model, or risk losing audience.

Zaslav pointed to The History Channel and its online counterpart, adding that the Internet site should be worth as much as the linear channel in the next few years. At NBC Universal, Zaslav said, the challenge is to take as many properties as possible to different platforms and get paid for it.

“We’re having a ton of meetings with all these players because we recognize there is an opportunity for both of us,” Zaslav said. “We don’t know how to split the baby yet, but it’s another bite of the apple.”


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