PROGRAMMING GLOBALLY-WITH CARE;CULTURAL RESEARCH ENSURES DISCOVERY'S SUCCESS ABROAD

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About three years ago, Discovery Communications made a conscious decision to create a global TV brand.

At that time, Discovery Communications, the parent company of the Discovery Channel and the Learning Channel in the U.S., already had its first overseas network in place, the Discovery Channel-Europe. (See "AAI picks next major marketers," Page I-33.)

But that was only a humble beginning for what has become a worldwide network now able to reach more than 87 million subscribers in 90 countries.

There's a Discovery Channel Latin America-Iberia, Discovery Channel Asia, Discovery Canada, Discovery New Zealand and several other language-tailored networks in the works to blanket the entire world.

"The 21st century will be recognized as the global century," said Domenick Fioravanti, senior VP, international networks for Discovery Communications. "We will all prosper on the back of technology that barely existed two decades ago."

But getting into the global game hasn't come easy.

After six years, Discovery Channel-Europe is breaking even, and the network loses money elsewhere.

"Cable overseas is not for the faint of heart," Mr. Fioravanti said.

"This is not a get-rich-quick scheme. You have to build a revenue stream from a subscriber base and gradually a revenue stream from ad sales."

Still, many U.S. cable networks, including Discovery, see exponential growth potential in expanding TV markets.

Within seven years, Discovery founder John Hendricks predicts, company revenue in Asia alone will surpass that of the U.S.

Discovery Latin America-Iberia continues to operate at a loss, but the potential is staggering because only 9.5 million of the region's 450 million people get satellite or cable TV networks, said Dawn McCall, senior VP-general manager.

Discovery's experience is that an aggressive strategy to expand overseas doesn't guarantee success. The mantra among its executives has been the bumper-sticker slogan "Think globally, act locally."

The first step is acquiring satellite transponder space in the targeted regions and then forming local partnerships to help get the signal into the home through direct broadcast or cable systems.

In many places, terrestrial distribution is a fledgling business, meaning a network will have limited subscribers and too small of a viewer base to be attractive for advertising.

But having a network up and running allows a company to test its programs for local appeal and modify a schedule for a territory before it is widely available.

Mr. Fioravanti said overseas success requires sensitivity to local markets, a good product, organizational strengths, long-term vision and financial commitment.

Discovery's mission and its nonpolitical educational programming has helped the company make inroads in tough territories, but it doesn't offer the U.S. program schedule to viewers in those territories.

Programming must be tailored to local tastes and must adhere to religious and dietary laws to avoid alienating potential viewers.

Discovery learned its U.S. theme, "Explore your world," would be viewed in some cultures as an offensive order, said Chris Moseley, senior VP-marketing and communications. The overseas theme became "World exploration."

Ms. Moseley said their strategy in taking a network abroad is to keep its message simple, consistent and meaningful.

The message from Discovery, she said, was that they would give viewers a diversity of programming on nature, history, science and technology, world cultures and human adventure, with visually arresting images.

Discovery Channel-Europe learned upon its April 1989 start-up that "Each territory is a very different market with its own intrinsic environment and culture," said Joyce Taylor, CEO of United Artists Entertainment Programming and head of the European channel.

"It is essential to sound European," she said. "We have United Kingdom narrators. We rewrite for idioms. Then programs can be promoted for a local look and feel."

Having quality programs also comes into play overseas, added Discovery Channel Latin America-Iberia's Ms. McCall.

More than 100 channels compete for channel space and advertising in Latin America, she said, although the cost to start a channel can reach $80 million.

"It can be done cheaper, but then you're creating a service that will not be around. The customers today are more sophisticated, and they know quality."

Discovery's reputation brought it a warm welcome in Asia, said Kevin-john McIntyre, VP and general manager of Discovery Channel Asia. "Viewers know it is what they want to see and what their children can see," he said.

But attention to dubbing and subtitles, using local translators to ensure proper dialects and accents, is a "monumental" but necessary task for local appeal.

Senior VP-Research Daniel Fischer also cited the need to do preliminary research for new markets, as other countries usually don't have pertinent information.

While Discovery has conducted research, the "major challenge" for global networks, Mr. Fischer said, will be to harmonize methodology and buy rating and demographics information in different countries to make it easier for advertisers to buy time.

But he also warned that companies must expect to "bend" research rules, because the methodology has to be consistent with cultures in the same way program schedules should be sensitive to local customs, religions and tastes.

"Mixing men and women together in focus groups is illegal in Saudi Arabia. Then in places like Spain, there is the courtesy effect in focus groups," where participants try not to be negative, he said. "You have to understand that."

Mr. Fischer said research is necessary because the tastes of viewers differ.

Understanding those tastes allows a network to customize its schedule to better suit the wants and needs of local consumers.

He said they've found viewers in Mexico to prefer programs about history and architecture while those in China and Brazil particularly like military technology shows.

Russians, he said, have an above average interest in do-it-yourself series, while Indians favor travel and Australian viewers are more inclined to like science and technology.

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