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Discovery Channel -Discovering India

Discovery India has to rework its brand positioning. We've to reorient our image. Science and history programs will be publicised more. - Kiran Karnik, Former MD Discovery Channel, India, in 1998 [1]. Discovery is in the infotainment genre while National Geographic is all about wildlife." - Pio Linhares, Media Supervisor, HTA, in 2001[2]. The biggest challenge is to get Discovery out of the niche arena. We plan to position Discovery in the mainstream market. Because it is a mainstream channel" - Deepak Shourie, MD, Discovery Channel India, in 2001[3]. REACHING OUT TO INDIAN VIEWERS In October 2002, readers of India Today [4], a popular weekly magazine in India were surprised to receive a program guide of Discovery Channel (Discovery) along with the magazine. The program guide provided information on Discoverys programs for the coming quarter. Along with programming information, it provided a program summary. The program guide was in the form of booklet that could be pulled out from the magazine and retained by the consumer.

This move was aimed at familiarizing Indian viewers with Discovery. According to channel sources, a market research survey revealed that while viewers loved to watch Discovery; they were not aware of its programs and their broadcast timings. Sanjay Raina (Raina), Associate Director, Marketing, said, The booklet is laid out in an easy-to-use manner, so that consumers can plan their viewing on Discovery by flipping through its pages and locating the different time bands [5]. Discovery also changed its programming content and announced a new programming strategy for its Indian viewers. In early 2003, it announced a distribution tie-up with Sony Entertainment Television (SET) India Limited. Under this arrangement, Discovery would be made available by SET along with its other channels. According to channel sources, this would help Discovery increase its viewer base from 21 million homes to 29 million homes.

Though Discoverys changed programming strategy was successful (it increased its viewership from 13 million in 1999 to 21 million in 2001), analysts expressed doubts about the channels continued viewership growth in India, as National Geographic Channel (NGC); (Refer Exhibit I), its competitor, had also changed its programming strategy to increase viewership. However, Discovery was confident about its performance in India and said that it did not regard NGC as its competitor, as the programming content of NGC was different from that of Discovery. BACKGROUND In 1985, Cable Educational Network Inc., founded by John Hendricks, launched Discovery channel in USA. Due to the increasing popularity of the channel, United Cable Television Corp., Cox Cable Communications Inc., and Tele-Communications Inc., invested in the company in 1986. In its first year of operations itself, the channels subscription increased to seven million in the US. Discovery offered non-fiction programs that gave quality insights into matters related to history, science, adventure, nature, civilization etc. In 1987, Discovery entered into an agreement with Mitsubishi Corporation [6] to telecast Discovery programs in Japan. In 1990, Discovery launched televisions first interactive video[7] The Discovery Interactive Library. In the following year, Cable Educational Network Incs name was changed to Discovery Communications, Inc (DCI). In 1994, DCI launched its programs in a few Asian countries. In 1995, DCI extended its programs to Canada and India. In the same year, it launched its online service Discovery Channel Online and acquired Dallas-based Discovery Store Inc, and renamed it Discovery Channel Store. It also launched its first ever consumer catalog, Discovery Channel Catalog, which provided information about the merchandise offered by the channel. The catalog provided information about more than 2,000 products by 2002. In 1996, DCI launched Discovery channel in Brazil in Portuguese language and entered Europe by launching its channel in Germany, Austria and Switzerland. In the same year it announced the launch of new channel Animal Planet in the US, which aired programs based on animals and the environments in which they lived. Discovery also announced the launch of Discovery Kids programs, which would be aired once a week. By the end of 1996, Discoverys subscription increased to 101.4 million households around the world. And by 1997, according to Total Researchs EquiTrend study [8], Discovery was the number 1 media brand surpassing even the National Geographic Magazine[9] . In the same year it entered Turkey through a partnership agreement with The Media Group. In March 1997, DCI entered into a joint venture with British Broadcasting Corporation (BBC) [10] to launch BBC America. Discovery was the first network to target channels at different viewer segments to increase viewership and cater to the viewing needs of different viewers. To suit the needs of different viewers, Discovery offered The Science Channel, Discovery Civilization Channel, Discovery Home &

Leisure Channel, Discovery Wings Channel and Discovery En Espanol (Refer Table I for the profile of these channels).

TABLE I PROFILE OF DISCOVERY CHANNELS


CHANNEL NAME

PROFILE This channel aired programs about science and its wonders. The channel aired programs related to breakthroughs in science, ancient mysteries, and nature. The channel aired programs on the lives of world leaders, important historical events, and different world cultures.

The Science Channel

Discovery Civilization Channel

This channel aired programs related to home Discovery Home making and interior design. It also aired & Leisure programs related to lifestyle issues in an Channel informative way. Discovery This channel aired programs on the aircrafts Wings Channel and adventures related to flying. Discovery En Espanol This channel was launched to cater to the needs of the Spanish-speaking people in the US.

Source: http://corporate.discovery.com By 2002, Discovery channel became the worlds most widely distributed television brand. Discovery channel was aired in over 155 countries and had around 700 million subscribers (Refer Table II for its Global Presence). The 14 entertainment brands of DCI were distributed through 33 networks in around 33 languages all over the globe (Refer Table III).

TABLE II GLOBAL PRESENCE OF DISCOVERY COMMUNICATIONS INCORPORATED*


CONTINENT COUNTRIES

North America Asia Australia Europe South America

USA, Canada India, China, Bangladesh, Nepal, Sri Lanka, Turkey, Japan, Malaysia, Philippines, Thailand, Singapore, Hong Kong, Taiwan Australia, New Zealand Germany, England, Austria, Switzerland, Spain, Portugal. Argentina, Brazil * This list is not exhaustive. Source: corporate.discovery.com

TABLE III ENTERTAINMENT BRANDS OF DCI*


Discovery TLC Animal US Networks Travel Health Discovery Kids The Targeted Networks Home Discovery & Science Leisure Civilization Channel Channel Channel Planet Channel Channel Channel

Discovery Wings Channel *This list is not exhaustive. Source:http://corporate.discovery.com

Along with launching various infotainment channels, DCI sold educational products and services based on its television

programs to consumers through its Discovery Consumer Products Division to leverage its brand name and provide innovative products to students (Refer Exhibit II). Discovery success was attributed to its programming mix and its marketing strategies. However, in India, Discovery faced the problem of positioning itself in the viewers mindset. In India, Discovery was perceived as a specialty channel airing programs on wildlife and nature. DISCOVERING INDIA When Discovery entered India in 1995, the Indian television market was dominated by entertainment channels which provided family soaps and filmbased programs to viewers. Discovery was the first channel to provide infotainment programs in India. It aired programs related to Nature, Wildlife and Science & Technology in English. Discovery was successful in attracting viewers; in the first year of its operations it reached 3 million homes. The reasons for its success were: - Its innovative programs, which gave viewers a break from routine family dramas aired on entertainment channels in urban areas. - Parents, who were concerned about the influence of TV on children. They liked the channels informative programs, which had a positive influence on children. In mid-1999, Discovery became a pay channel, charging around Rs 5 per household. Subsequently the number of households receiving Discovery went down to 8 million from 13 million in the first quarter of 1999 as operators stopped airing the channel. However, with consumers demanding the channel, cable operators were forced to resume airing the channel. As a result, the number of households receiving Discovery increased to 12 million within 6 weeks. Though Discovery aired a variety of programs covering a wide range of subjects, such as Nature, Wildlife, Science & Technology, Culture and Civilization, Indians perceived it as a channel airing programs on nature and animals and regarded it as an educational channel. Commenting on the channels brand image in India, Kiran Karnik (Karnik), former MD, Discovery India, said, Discovery India has to rework its brand positioning. Karnik announced that the channel planned to undertake an extensive advertising and brand building exercise to change its brand image in the country. Discovery also announced that it would try to enhance its reach in India. In order to reach more viewers, Discovery tied up with Doordarshan (DD) [11] to air Discovery programs in Hindi[12] for two hours on DD. This move helped Discovery reach people who did not understand English.

However, Discovery soon realized that though these programs were successful in the northern states of India where Hindi was the popular language, in the southern and eastern parts of India, where the regional languages were more popular, it could not attract viewers through its Hindi language programs. In order to increase its penetration in South India, Discovery decided to launch its programs in regional languages. In 2000, it entered into a revenue sharing agreement with Vijay TV[13] to provide two hours of Discovery programs in Tamil. Under the agreement, both channels shared the revenues earned through sale of advertisement slots during the broadcast of Discovery programs. In December 2000, (Shourie) took over that Indian viewers still perceived it as a Karnik announced his resignation and Deepak Shourie as MD of Discovery India. By 2001, Discovery realized perception of the channel had not yet changed they niche channel airing programs on wildlife and nature.

CHANGING PERCEPTION After Shourie took over as MD, he commissioned a market research to find out how Indian viewers perceived Discovery. The research highlighted the following points: Discovery channel viewers consisted of mostly urban males between 25 54 years. Around 60% of its viewership was from the SEC A and B [14]. Discovery was very popular with kids and their parents. According to the study, the channel needed to pay more attention to its image and its communication with viewers to improve its performance in India. The study revealed that viewers loved to watch the channel but were not aware of program content and unclear about broadcast timings. Shourie said, Discovery gives you so much from travel to adventure to medicine to understanding sex, to murder mysteries. So the first issue was to communicate the sheer width and intense variety of the programming on Discovery[15]. The second issue was changing the image of the channel. Discovery was regarded as a serious channel with infotainment programs. However, according to channel sources, unlike its image, Discovery offered a variety of programs covering a range of subjects and topics, such as Junkyard Wars (two teams competing to be the first to build a machine out of scrap found in a junkyard), Fabulous Fortunes (this program explored the sources of wealth in the 20th century) and Understanding Sex (this explored the origins of sex) etc.

Along with program restructuring, Discovery focused on marketing initiatives to enhance its image among viewers. It conducted a yearly audio-visual quiz contest for school students across India to increase awareness about the channel among kids. The contest was hosted by Indias popular quizmaster, Derek O Brian. The quiz covered five categories of Discoverys programs Science & Technology, History, World Culture, Human Adventure and Nature. Analysts felt that by conducting quiz contests for students, Discovery was able to increase brand awareness among children and gain more market share. In August 2002, Discovery also conducted a contest for students. To do so, it entered into tie up with Canon India Ltd., (wholly-owned subsidiary of Singapore-based Canon Singapore Pte Limited). Discoverys executives conducted imaging contests in around 75 schools in seven cities (Delhi, Chennai, Bangalore, Mumbai, Hyderabad, Pune and Ahmedabad). Analysts felt that this contest helped the channel increase its brand awareness among children and increase its viewership ratings.

Discovery also conducted Discovery Exhibition, wherein, students from Classes VI to IX watched the channels program Popular Mechanics for Kids and created things under teachers directions. This was conducted by Discovery in association with Colgate Dental Cream to create awareness among children about the channels programs. Discovery also came up with the novel concept of programming guides to provide information about Discovery programs for every quarter. The first program guide was launched in association with India Today magazine in August 2002. In April 2003, Discovery entered into a tie-up with Businessworld [17] to provide a programming guide for the period April June 2003. It also used direct mailers to inform viewers of the channels programs. Discovery also conducted contests to attract viewers to channel. In April 2003, it launched the Win With Discovery Channel Contest. In this contest, viewers were expected to register online or e-mail their particulars to the Discovery channel. Discovery channel entered the name of the viewers in its database and held a lucky draw every month (the contest covered a period of 3 months). The lucky draw winner was awarded numerous prizes. Discovery also advertised extensively in the media to enhance its brand image and increase its brand awareness. It advertised through television channels (Refer Exhibit IV) and the print media. In the metros it also used outdoor advertising. CONSOLIDATING THE PRESENCE

Discovery announced that it would bring in new programs to consolidate the gains made by the new programming strategy. It planned to source worldclass programs from Discoverys 14 channels across the globe. Analysts pointed out that none of the programs were produced in India by Discovery. Commenting on why none of the Discovery programs were produced in India, channel sources said that producing one program for Discovery cost around $1.5 million and that revenues in India did not match the costs incurred for producing programs. According to Shourie, If you incur that kind of cost, the revenues just dont come in India. In 2000, NGC entered into a distribution and marketing agreement with STAR network in India. According to analysts, this move helped it successfully increase its reach. It was reported that while Discovery was strong in northern India, NGC was strong in South India. To increase its presence in South India, Discovery announced that it would launch a 24-hour feed in Tamil. In March 2002, it snapped its ties with Vijay TV and announced that it would air Tamil programs in the family time band (8 p.m. to 10 p.m.) on weekdays. It was reported that the channel would offer programs on the basis of themes history on Monday, science on Tuesday, forensics on Wednesday, health on Thursday and premiers on Friday. Commenting on the channels decision, Shourie said, With Tamil, we hope to capture a large Tamil-speaking viewer base to the channel and expand viewership in south India.

In June 2002, in order to enhance its distribution reach, Discovery entered into a joint venture with Sony Entertainment Television (Sony), known as SET Discovery, with an equity structure of 74:26. The majority stake was held by Sony. Commenting on the joint venture, Shantonu Aditya, Head (Distribution), SET India, said, With Discovery joining our existing bouquet of channels, the One Alliance partnership[18], announced earlier this year, is in place to offer viewers an enhanced genre of programming supported by combined distributed strength. We are now strategically positioned to be the No 1 television network in the country. According to reports, the alliance would help Discovery increase its reach from around 21 million homes (in 2002) to around 28 million homes. DISCOVERING THE FUTURE Through its alliance with Sony for distribution and marketing, Discovery announced that it expected to gain a 50% increase in both advertising and subscription revenues. The channel announced that in the year 2002 around 330 brands had advertised on the channel and that the channel had

registered a 50% increase in ad revenues. According to analysts, Discoverys decision to air programs on the basis of viewership patterns helped it attract advertisers. In order to consolidate its position, in January 2003, Discovery announced the launch of a new series The Blue Planet, which explored under water life. This program was co-produced with BBC and it took 5 years to complete the series at a cost of around 7 million pounds. Along with Blue Planet, Discovery also announced the launch of new programs such as, Special on World War II, Bismarck, Great Romances of the 20th Century, and Kitchen Chemistry etc. Discovery also announced the launch of a new program series in January 2003, featuring around 18 films made by world-renowned producers. The films would be aired in April, May and June 2003. Some of films to be aired were, Great Cats of India, Himalayas Descending India, Immortal Capital Many Cities of Delhi, Arthur C. Clarks Mysterious India, Konarak - Chariot of the Sun, Wild and Dangerous and Buddhas Mountain Wilderness. However, analysts were skeptical about the channels future in India. They felt that with even NGC announcing that it would air new non-wildlife programs on its channel, it would be very difficult for Discovery to increase viewership. Discovery also faced stiff competition from specialty channels such as Cartoon Network, CNBC and CNN, which, though they offered a different genre of programs, attracted viewers to their channels. Will Discovery garner more revenues and increase its viewership base in India? Only time will tell. QUESTIONS FOR DISCUSSION: 1. Discovery was able to gain viewership in India even though it did not air any film-based programs or daily soaps. Analyze the reasons for the success of Discovery in India. 2. In 2001, Discovery announced a major change in its programming strategy by announcing time bands for its programs. How far do you think changes in programming and promotion helped it to increase its viewership? 3. Analysts pointed out that with NGC also developing a new programming strategy for India; it would be difficult for Discovery to gain viewership. Discuss the future prospects of the Discovery channel in the light of increasing competition.

EXHIBIT I NATIONAL GEOGRAPHIC CHANNEL


The National Geographic Society was established in 1888 by three men in Washington. It soon emerged as one of the

largest nonprofit scientific and educational institutions in the world, consisting of people from diverse backgrounds such as geographers, explorers, teachers, lawyers, military officers and financers. In September 1888, the first National Geographic magazine was published. It carried the mission of the National Geographic The National Geographic Society has been organized to increase and diffuse geographic knowledge, and the publication of a Magazine has been determined upon as one means of accomplishing these purposes. As it is not intended to be simply the organ of the Society, its pages will be open to all persons interested in geography, in the hope that it may become a channel of intercommunication, stimulate geographic investigation and prove an acceptable medium for the publication of results. NGC was launched in 1997 in Europe and Australia. It provided programs about nature and wildlife. In 1998 July, NGC was launched in Asia and was made available in 143 countries in around 25 languages. It had a viewership of more than 160 million homes by 2002. NGC employed more than 200 teams to cover the astonishing facts of nature on film. NGC documentaries have won more than 800 awards over the past 35 years. Source: www.nationalgeographicchannel.co.uk

EXHIBIT II DISCOVERY CONSUMER PRODUCTS DIVISION


The division markets products through a nationwide retail chain of around 167 Discovery Stores. It also sells products through mail order catalogs, and on on-line shopping site. The division distributes learning toys, home videos and DVD titles, apparel and accessories. It also merchandises toys based on its programs such as Crocodile Hunter (in Animal Planet) and Junkyard Wars (TLC). The divisions Discovery Channel School offers teachers various teaching aids such as educational video, print and multimedia products. It offers more than 600 videos, CDROMs and print resources for schools in the US. Discovery Channel School reaches around 1.5 million teachers. Its website, www.discoveryschool.com offers teaching and educational products for teachers, students and parents. Education Market Research[19] ranked it as one of the top-ten most visited educational sites. Discovery has also entered into

publishing partnerships with companies such as Pearson Education, Primedia, World Book Publishing and Voyager Expanded Learning (popular publishing houses). Source: www.discovery.com

EXHIBIT III DISCOVERY INDIA TIME BANDS


TIME BANDS TARGET AUDIENCE NATURE OF PROGRAMS

SUNRISE

Early morning Programs showing wild life television and nature viewers Programs like popular mechanics for kids, mystery hunters etc. that would attract the kids Programs filled with adventure and action. Reality adventure shows. Programs related to science, history and wild life. Premier programs related to science and technology. Best programs of the week that might have been missed by the viewers. Programs related to family, womens health, interior designing etc. Programs related to sex, crime, horror and violence are presented on this time band. Programs related to health,

DISCOVERY KIDS

Children

ACTION ZONE Teenagers

FAMILY TIME FRIDAY SHOWCASE SUPER SUNDAYS

Family

Office goers

Family

WOMANS HOUR

Women

LATE NIGHT Adults DISCOVERY HEALTHY College goers

LIVING AMAZING ANIMALS

and exercise. Children and Programs about animals college goers

Source: Discovery Program Guide, April June 2003.