Cable ’04: Brain Gain

Billy Campbell’s mission at Discovery Networks: Make programming more entertaining and find the right people to make it and sell it. He’s had his share of critics, but after a year at the helm, ratings have soared, revenue is up and Discovery is riding high.

This time last year, as Discovery Networks was entering its first upfront with Billy Campbell and Joe Abruzzese at the helm, a noticeable tension ran through the executive ranks of the company. Things are changing around here, they nervously thought. For one, the upfront presentations were far more lavish affairs than they’d ever been, with on-air talent like Paige Davis of Trading Spaces paraded on stage and given star treatment seemingly unfit for a company built on natural-history documentaries and scientific exploration. The programming being hawked seemed almost heretical: Dinosaurs and sharks were being swapped out for biker dudes wielding torque wrenches. Even the networks’ iconic tagline, “Explore Your World,” was replaced by the far less noble “Entertain Your Brain.” It felt more Spicoli than Smithsonian.

“That’s a tough one for a lot of people—like the end of an era,” conceded one employee at the time when asked about the new tagline. The competition was more blunt: “If [Discovery founder and chairman] John Hendricks were dead, he’d be rolling in his grave,” said one executive.

A year later, no one’s doubting anymore. As it revs up for its 20th birthday celebration in 2005, the Discovery Channel is experiencing some of its best and most consistent ratings ever. The biker types—otherwise known as the Teutuls and Jesse James—have become bona-fide celebrities and their shows, American Chopper and Monster Garage, respectively, have succeeded in attracting the very elusive—and highly desirable—young male audience to Discovery on Monday nights. TLC, still riding on the Trading Spaces high, is a top 10 network among key demographics; Travel Channel is up double digits in audience delivery across the board. And the myriad digital channels—Wings, Science and Home, to name a few—which had been floating untended in the digital void, now have clear programming missions and dedicated executives to see them through.

No one could be happier than Hendricks himself, who, by the way, had a lot to do with that tagline change. “I was part of that decision,” says Hendricks, graciously chuckling at the notion that he would be rolling in his grave. “You use the word ‘learn’ and it turns people off. I wanted to create an environment where people would be stimulated but also entertained.”

Bringing on Campbell to be president of the Discovery Networks group was key to that progression, adds Hendricks. “Three years ago, I became convinced that TV was going through a significant revolution. And I wanted someone like Billy who could help us develop and leverage our core properties but also build up our digital offerings…I’m very pleased.”

It’s never easy being the new guy, the agent of change. No one knows this better than Campbell, who describes his first days as being a stranger in a strange land. “I felt like Gulliver walking down the hall,” he says with a smile. “All these Lilliputians were peering out at me from behind their office doors.”

His new colleagues no doubt looked upon him with curiosity, and a little bit of fear. Taking on the 14 Discovery Networks—which generate $2 billion in total revenue—is no small task, and Campbell, 43, was a relative unknown in the cable industry. He had built his career in broadcast television, developing hits like ER and Everybody Loves Raymond. His only taste of the documentary programming that is Discovery’s signature was working on HBO’s Project Greenlight while serving as head of Miramax Television, his last job before Discovery. “We were looking for a creative person and an innovative person, not necessarily a cable person,” says Judith McHale, president/COO of parent Discovery Communications. “I thought it might be too much for one person, with 14 channels, ad sales, marketing and affiliate sales, but I have to give him credit.”

Campbell was cautious not to start shaking things up right away in terms of personnel, but he had a vision for the company and was eager to see it through, which more than a few longtime employees probably found off-putting. “I wanted to pick up the pace, be more competitive,” Campbell explains. “There is unlimited potential for these networks—I felt that then and I still feel that.” He has tried to energize the group by engendering competition between the channels, but he has also improved communication, his colleagues say. Everything is shared. A marketing concept for Discovery can come from an Animal Planet executive and a marketing executive can pitch a programming idea. “There is no territoriality here—ideas can come from anybody and anywhere,” Campbell says.

Though he is reluctant to use the word complacent, it’s no secret that the pre-Campbell Discovery Networks group had become…sleepy. The company had been a cable giant for years, with Discovery Channel consistently ranking as the No. 1 cable network most important to consumers, according to Beta Research Corp. Being on top for so long, it’s natural to get comfortable. “People didn’t respond to pitches for two months—they felt like they didn’t have to,” Campbell says with a note of incredulousness. “Not only is that not honorable business, but if we don’t talk to them, they will take their ideas elsewhere—we are competing with everyone.”

“As a culture under Billy, we are more aggressive,” agrees Roger Marmet, who was promoted to senior vp and general manager of TLC under Campbell in February 2003. “His expectations are for people not to accept the status quo—it is a great enhancement.”

Campbell’s L.A. background and constant talk about the importance of star power, led some people inside and outside the company, to believe he was going to Hollywood-ize Discovery. Funny thing is, Campbell is anything but your classic, slick, entertainment suit. Though he may want to improve the wattage and volume of Discovery’s newfound star power, his personal values are more complementary to Discovery’s home-grown, independent, family brand than any of his earlier gigs in L.A. Ambitious and smart, Campbell is also a gentleman. A true Southern boy, reared in Greenville, S.C., Campbell seeks the comfort of khakis and slip-on loafers, sweet tea and fried chicken. (He is so devastated that the Carolina Kitchen near Discovery’s headquarters burned down that he is raising funds to help the place rebuild.) He’ll hold your coat and the door in a way that makes you think everyone still does this. “When he came in two years ago to interview, his competitiveness was appealing, but I was really impressed by his fundamental decency, a rare thing in this business,” says McHale.

But yes, he wants more celebrities and household names populating his networks. “It’s part of entertainment,” says Campbell. “A good show is 60-70 percent talent. The rest is marketing.” The only “star” at Discovery two years ago was Steve Irwin, a.k.a. The Crocodile Hunter. Since then, a handful of personalities have emerged as full-blown TV stars. In addition to the Teutuls, Jesse James and Paige Davis, TLC carpenter and resident hunk Ty Pennington also claims celeb status, as well as While You Were Out’s Chayse Dacoda and Evan Farmer. The next big star, according to Campbell, is Austin Stevens, a Namibian herpetologist who charms reptiles and sharks in Animal Planet’s upcoming Austin Stevens: Snakemaster.

However, more important than all of them, at least in Campbell’s heart, is primatologist Jane Goodall, whom he convinced to work with Animal Planet last year. “Billy had a clear vision of what he wanted to accomplish when he got there,” says his friend and college roommate Dr. Mehmet Oz, host of Discovery Health Channel’s Second Opinion With Dr. Oz. “He wanted to elevate the type of personalities on the network, punch it up and make it more big-time.”

It is very important to Campbell that the right person is in the right job. True, a number of executives have left the company under his watch, but he has promoted some deserving people, including Rick Rodriguez to executive vp/general manager of Travel Channel, and Steve Burns to senior vp/gm of Discovery Science. He has also brought in new talent, including ex-CNN producer Vivian Schiller as senior vp/gm of Discovery Times and Sony veteran Ken Dice as executive vp of marketing of Discovery Networks.

But there’s one management appointment that stands out from all others because it has contributed significantly to Discovery Networks’ bottom line. Shortly after he arrived at Discovery, Campbell went after CBS’ longtime sales chief Joe Abruzzese, who, with his tailored suits, snazzy ties and fast talk, is one of the best-known and easily recognized stars of the ad-sales business. “Discovery had to change, and the only way to do it was to get Joe,” Campbell says.

Though it meant replacing some Discovery veterans, Abruzzese was named president of advertising sales for the 14 channels, including BBC America. In turn, Abruzzese brought in two former CBS colleagues: Scott McGraw as executive vp of ad sales and Beth Rockwood as senior vp of market resources. Together, Abruzzese and his team have brought in new advertisers, including Taco Bell, Valvoline and $15 million in beer business. They have increased the number of integrated marketing deals—”solutions” deals in Discovery parlance—and grown revenue across all the nets.

“Immediately following this last upfront, I said, ‘I need to do more business with these guys’—and I already do a lot of business with them,” says John Muszynski, managing director of investment and operations for Starcom. “Abruzzese is the consummate partner. He doesn’t just sell you a plan, but he finds a way to help you that also helps him.”

Watching them tag-team an upfront presentation together, it is clear that Campbell and Abruzzese are partners in building Discovery. They are friends from when they worked together at CBS, which was one of the reasons Campbell hired him. They trust each other. “If I was going to go to Discovery, I told him that we needed to start working on the upfront right away,” says Abruzzese. “I want to compete with the networks—not just USA, but with ABC.”

He has already made some inroads. Discovery Channel’s net revenue is expected to grow to $329 million in 2004 from $289 million last year, according to Kagan World Media. TLC, the biggest revenue generator, will grow to an estimated $338 million from $294 million; Animal Planet will grow to $90 million from $81 million, and Travel Channel will grow to $76 million from $61 million. Even Discovery Health, which has officially outgrown its emerging-net status with 52.5 million subs, is expected to grow to $29 million from $18 million. That’s $119 million in added revenue.

“Two years ago, Discovery had 15 percent of ABC’s Monday-night rating—now we are at 40 percent,” Abruzzese says. “I can sell American Chopper five times over and I can sell TLC like that. The idea of bigness doesn’t work anymore.”

It is difficult to determine what prices the nets’ inventory will grab during the upfront this year, but last year Discovery Channel grew its cost-per-thousand rates about 7.2 percent to fetch an estimated 24-hour CPM average of $7.34, according to Kagan. And with Discovery’s current reputation in the marketplace as one of the most competent sales outfits, pricing and revenue is expected to increase across the networks.

“Not every client can go as deep [with integrated marketing and cross-platform deals], but Discovery maximizes the relationship by offering deals with many arms and legs that go beyond straight media—on-air, online, branded in-store media and talent,” says Tim Spengler, Initiative’s executive vp and head of national broadcast. But it’s as much the personality of its executives as their strategic thinking that will help Discovery attract more ad dollars this year, adds Spengler. “It’s Abruzzese’s actual style that puts him at the top. [He and his team] are easy to work with—they listen, understand both sides, and are not confrontational.”

As a programmer, Campbell puts together a development slate the way some people cook. He experiments with a variety of concepts, adding a little bit of this and a dash of that, then lets it simmer until something happens. “He has created an environment where you throw a bunch of spaghetti at the wall and see what sticks,” says McHale.

Campbell wants to create more signature series at the networks by stretching the definition of each network brand while keeping Discovery’s core programming mission in sight. Last year, he grew ratings on Discovery’s American Chopper and Monster without eclipsing viewership of classic documentary specials Walking With Cavemen and Nefertiti Resurrected. TLC had some success with While You Were Out and What Not to Wear, while Travel Channel had a sleeper hit in The World Poker Tour.

So what’s next? Often the approach is to see if one good show can beget another. Chopper was a risk that worked, so Discovery is pushing American Hot Rod, which is similar to Chopper except that host Boyd Cottington works on cars and is cooler under fire than the Teutuls.

The spinoff is a familiar concept, especially on TLC, which has spawned endless Trading Spaces extensions, from Trading Space Family to the upcoming Trading Spaces Goes Medieval. Is the appeal of home decorating shows waning? TLC’s Marmet thinks not. “We do not see a dilution in viewers’ desire to watch these types of shows, but we are aggressively developing outside of that space,” he says. The ratings bear him out: The April 25 finale of Trading Spaces: Home Free delivered a 3.3 household rating, a 371 percent gain over the timeslot a year before.

What’s next? A remake of British series Faking It, in which people try out a new job for 30 days and attempt to convince a panel of judges they actually do it for a living. One episode has a 21-year-old sheep shearer test his scissor skills—and his tolerance for gay men—in a hip L.A. hair salon.

Campbell has definitely gone one step farther than the company has ever been with Animal Face-Off, Tuesdays at 9 p.m. The series, which uses computer animation and biomechanics to simulate combat between two creatures that wouldn’t ordinarily do battle (an elephant vs. a rhino, for example), has met with criticism from those who think it too violent. “With 14 channels, I should be able to have Jane Goodall on one night and then air Animal Face-Off the next,” replies Campbell. “Who knows where the next hits are coming? A great programmer has to be passionate, and if you keep trying new things, something will hit.”

Also coming up: N.O.W. (No Opportunity Wasted), which Campbell hopes to be the next programming juggernaut. The emotionally charged Discovery series, set to debut in the fourth quarter, gives viewers a chance to realize a fantasy, whether it’s to play for a professional hockey team, eat dinner on the edge of a volcano, or audition for a Broadway show. “Billy has given me the freedom to assume risk,” says Clark Bunting, Discovery Networks’ exec vp. “How do we reinvent natural history? We can be smart and entertaining where before we were smart but not always entertaining.”

that said, discovery Channel is still home to spectacular documentaries, and networks like Discovery Times seek to explain, in-depth, the “why” behind international headlines that the mainstream media no longer attempts. Though some of the regular series on the flagship network are less formal and more fun, the Discovery nets are still about “discovery.” They still inform, whether it’s on world culture, putting in a tile floor or the advanced stages of Alzheimer’s. For example, as our society ages, Campbell sees Discovery Health as a must-have informational tool. Oz is currently developing ideas for some medical anthologies as well as real-time documentaries on surgical procedures. “The idea is to provide quality programming for care-givers—the professionals as well as the mothers and the grandmothers,” Oz says. “Billy cares about educating the educated—taking it one level up.”

Campbell last month announced he is delegating some of his duties to Bunting. Bunting will oversee 10 of the networks, which frees Campbell up to concentrate on Discovery Channel and TLC, the company’s largest networks, as well as focus on building more relationships within the creative community and with advertisers. Jane Root, controller for BBC Two, was tapped to replace Bunting as executive vp/gm of Discovery Channel. “As we move faster with strong people in place, I need to focus on macro issues—strategy, future direction, the relationships we build through Joe and with talent,” Campbell says.

For an outsider, Campbell has certainly made his mark. “I hired him to help us build the organization of the future—to grow ad sales and connect with the production world,” says Hendricks. Having recently decided to give up his CEO title to McHale in June, in order to spend more time on high-definition programming and other technical pursuits, Hendricks is clearly confident DCI is heading that way.

The marketplace sees it that way, too. “Obviously, the old brand has been diluted,” says Starcom’s Muszynski. “But with a Trading Spaces or a Chopper, Discovery has engaged the viewers. They are part of the fabric of that programming—and that is everything an advertiser wants. Billy Campbell’s direct influence can be felt in that.” K

Megan Larson is a senior editor at Mediaweek, in charge of covering the cable industry.

The Most Flattered Network: BBC America revolutionizes television in the U.S.

The Office is one in a long line of smart, sophisticated British comedies to have crossed the Atlantic over the past half century. But for BBC America, it’s the show that put the emerging cable network on the map.

A workplace comedy set in a paper manufacturing company outside of London, the show took home two trophies at the Golden Globe Awards earlier this year: one for best comedy series and another for best comedy actor (awarded to star and co-creator Ricky Gervais). Following those wins, all eyes have focused on BBC America as a destination for cutting-edge programming.

In fact, BBC America has stirred so much buzz throughout the television industry that CEO Paul Lee, a U.K. native, was tapped last month to become president of ABC Family, following Disney’s corporate restructuring of its broadcast and cable properties. In Lee’s absence, Jo Petherbridge, BBC A’s senior vp of strategy and communications, was named acting COO.

In the wake of The Office’s success—and prior to Lee’s exit—BBC A already had begun an aggressive push into new programming. “We decided early on that we didn’t want to be your grandfather’s BBC,” Lee said before his move to ABC Family was announced. “We wanted to be younger, cooler and more relevant. Which is why we’ve put less emphasis on period dramas and more on groundbreaking, quality programming.”

Distributed by Discovery Networks, BBC A premiered the highly acclaimed political drama State of Play last month. It also launched the romantic thriller Take Me, the detective series Murphy’s Law, and the Scottish sketch-comedy show Velvet Soup. Later this summer, it premieres the mystery series Messiah, which, in terms of quality, Lee noted, “is up there with Prime Suspect.” On the nonfiction side, the cable net recently launched the real estate property show Location, Location, Location; and it is preparing to launch its latest makeover show Design Rules later this month.

Reaching 38 million homes, BBC A’s impact on American programming seems to outweigh its limited reach. After all, if imitation is the sincerest form of flattery, then BBC A “is the most flattered cable network out there,” said Kathryn Thomas, associate director of Starcom Entertainment. Thomas noted that Discovery’s TLC remade BBC A’s makeover show Changing Rooms as Trading Spaces and recast What Not to Wear with American hosts. Meanwhile, Cash in the Attic became HGTV’s Collector Inspector. And even though NBC botched its remake of Coupling this season, it still plans to take a stab at The Office.

Despite the cable net’s wide-ranging influence, execs there acknowledge it still faces some obstacles to future growth. Regional accents of actors on programs ranging from State of Play to Velvet Soup may sound incomprehensible at times to American viewers, while the Anglo-centric nature of series like the U.K.-set Location, Location, Location can prove alienating. Dave Bernath, BBC A’s programming vp—and an American—says such issues “are always a consideration, but the overall quality of these shows has caused most of them to work.”

In an effort to make those shows work even better, the network also has begun to package more effectivey, creating prime-time programming blocks seven nights a week. In addition to Mystery Mondays and Makeover Tuesdays, Wednesdays have been reserved for broadly appealing comedies in the vein of Keeping Up Appearances, while Thursdays will feature offbeat comedies, including the recently launched Canadian comedy Trailer Park Boys. As of July, Friday will be dubbed Retro Night, featuring classic UK series such as The Saint. Saturdays will revolve around property shows like Location, Location, Location, and Sundays remains a showcase night, housing acclaimed programs like State of Play and this month’s launch of the sketch- comedy show Little Britain.

Like most cable execs, Lee tips his hat to HBO for driving viewers toward edgy content. “You have to give them credit for identifying a sophisticated, upscale audience that wanted to take risks, that was getting bored of the broadcast networks and their cookie-cutter shows, and that didn’t want a laugh track,” he says. “Behind the success of HBO have come sophisticated cable channels. And if we had launched 15 years ago rather than 5, I don’t think we would have been as successful as we are now.” —A.J. Frutkin