There’s a sense of urgency behind Discovery’s digital drive these days, seeking to win over a new generation of viewers by ramping up production for a non-linear world – one where traditional TV content is still relatively scarce.

“Ensuring that TV stays relevant for the 18-34 or 18-24 demo has become more acute,” says the company’s chief digital officer, JB Perrette, speaking on the sidelines of Asian pay-TV association Casbaa’s annual conference in Hong Kong.

“It’s not like people didn’t think about this before,” Perrette added, speaking in an interview with Media Business Asia.

“But now more than ever television has to migrate faster to a multiplatform world, or risk losing the younger generation.”

Small, but growing

Online video only accounts for a small slice of Discovery’s mighty $1.6 billion content budget, which has more than tripled in size since president and CEO David Zaslav took the helm at the start of 2007.

Nonetheless, online video production now totals 600 hours a year, double the output from last year, primarily created to stay in touch with twenty-something millennials.

The push represents a renewed focus on video-based storytelling that sees Discovery offloading interesting but non-core websites such as Petfinder and TreeHugger, acquired an internet generation ago over 2006 and 2007.

“The first thing we did was shift our focus,” remarks Perrette, recently promoted to a global role after first joining Discovery from NBCU in 2011.

“It’s hard to focus when you have a pet adoption site, when you’re trying to be an eco-friendly social conscience text-based site.”

This application also reined in numerous experiments with different social TV services, as Perrette redirected resources towards the two biggest platforms, Facebook and Twitter.

“TV is a mass adoption business,” he explains. “If you have all these other players that are not mass-adopted technologies or providers, they don’t work. They only confuse people.”

Perrette’s immediate priority is making Discovery’s traditional TV content more accessible for existing subscribers – so-called TV Everywhere services that so far have failed to keep pace with consumer expectations, in part due to multi-year carriage deals out of sync with changes in media consumption.

At the same time, original online production is becoming more important, with most investment providing support to existing TV brands.

Additional online material can breathe new life into existing franchises, helping boost viewer engagement and loyalty, and in turn enhancing value for both affiliates and advertisers.

Dedicated content

On a smaller scale at present, Discovery is also actively cultivating new personalities and franchises online, representing the third strand of its online video strategy.

The broadcaster laid the foundations for this emerging new business last year, buying internet TV production house Revision3 for an estimated US$30-40 million.

Perrette stewards a portfolio of seven online networks specializing in original short-form content, including new brands such as TestTube launched in May, as well as Animalist and For Human Peoples, both launched in October.

The initial focus is on content types familiar on TV, but Perrette is also mulling entry into relatively new genres for Discovery, such as comedy or tween-oriented content.
“We have a much broader appetite and interest online than the content types we just have on television,” he says.

Online video production costs for shows aligned with existing TV properties are considerably lower than traditional TV, while those for online-only content are lower still, enabling greater experimentation while maintaining quality thresholds.

Creative interests

Revenue pockets for these investments already exist, around digital ad sales in English-speaking markets, including Australia.

For now however, the emphasis is on building and retaining audiences rather than monetization, with initiatives driven by more creative than commercial considerations.

It’s a long-term approach that Perrette compares to the early days of pay-TV.

“In the 80s, many pay-TV channels were trying to figure out a business model,” he says.

“Now, their model was more clearly defined, because at least you knew it was subscriber and advertising based, but frankly this is no different in terms of evolution,” he contends.

“We’re in that very early stage of trying to develop audiences. The good news is that audiences are coming. Real audiences are being gathered.”

JB Perrette’s on-stage interview at Casbaa, with more on Discovery's digital strategy, can be viewed in full here.