Been doing some thinking on Discovery.
One of the common arguments supporting a premium valuation for Discovery is that their content can be sold globally. All you need is a little dubbing and a show about elephants can be sold to the whole world.
I think that's true as far as it goes but I don't think Zaslav has any intention of sticking closely to a narrow interpretation of this niche.
1. "As far as it goes" because Discovery isn't driving ratings with BBC-style nature shows. They are investing in more and more fiction-dramas (is there a name for these?). And, while a show about elephants can obviously be leveraged across the whole world, can the same be said of "Amish Mafia" type shows? Also, these shows have similar finitude to dramas, hot one year and cold the next.
2. The SBS buy, the OWN partnership, the Eurosport buy...these don't seem to be the signs of someone sticking around their niche. SBS is a well-established broadcaster in Scandinavia, OWN is Oprah's latest network and Eurosport is the sports network that currently specializes in sports of limited popularity. They all seem to have different dynamics than the elephant documentary. Even with the finest dubbing I don't imagine they're going to be selling Oprah to Norwegians or Ski Jumping to Brazilians. That said, they still seem like smart, limited risk investments - with a lot of upside potential.
Rather than sticking to the Discovery/Animal Planet niche it looks more like Zaslav is trying to aggressively build a big content company. I know it's a stretch but does anyone else see a kind of nascent Disney Group (Disney, ABC, ESPN, A+E). Obviously Discovery is at an early stage in some areas but I see pretty strong outlines of where they are trying to go.
Maybe I'm crazy about that Disney stuff, but I still don't think anyone should be justifying their DISC investment on the basis of the global marketability of elephant documentaries.
