Discovery’s Honeycutt Sees 3-D as Another Opportunity to Promote Brand
Discovery prides itself on being a pioneer in HD and is approaching 3-D in the same manner, says John Honeycutt, executive vice president and head of international business operations for Discovery Networks International. Honeycutt speaks with Via Satellite about the company’s 3-D plans.
VIA SATELLITE: Has HD been a revenue generator?
Honeycutt: It is all to do with what you value as a return. It depends on if you are looking for a straight transaction. You can get other things sometimes when providing an HD service. You can get improved channel position, for example. You can maybe enter into an exclusive agreement. There is an added element. The inherent nature of business is people want to talk about dollar-per-dollar transactions. I think the world is more complicated than that. What we may do in marketplace could be positioning for another marketplace. You have to look it at on a wider scale. We have HD in 80 market places around the world. Our brand has been supported by the fact we had HD channels on platforms before just about anybody else. That did something for our brand, so when people started thinking of HD, they automatically thought of Discovery. They thought of us as on the edge. They thought of us as someone that leads. You cannot buy that type of marketing.
VIA SATELLITE: How much content are you producing in 3-D?
Honeycutt: I can’t say exactly, as it is not really my business, but I can tell you, it is a lot. From an international perspective, the market places that are hot right now are predominantly Asia and Western Europe. Latin America and Eastern Europe are approaching 3-D more slowly.
VIA SATELLITE: When will we see a Discovery 3-D branded channel on an international platform?
Honeycutt: I am not going to put a date on it. On a world-wide basis, we are talking to several people on this. I think the question really around this is what is the business opportunity for both of us — both for the distributor and the content provider. A lot of times in these conversations, it comes down to a particular situation, so where are you in a carriage discussion, for example. Increasingly, if you look at VOD (video on demand) on a platform, if you can find someone that is generating revenues on a transactional basis, I would love to meet them. VOD, on the distributor side, has become a way to develop a good customer experience and create a good stickiness. From a content provider point of view, it gives them the opportunity to watch content they may not otherwise have watched in a linear environment. It is a great sampling vehicle. The measurement component of this has become more and more mature. If you look at VOD, which is generally free, it still has huge amount. You look at 3-D, and it is the same thing. If you are a distributor in a highly competitive marketplace, 3-D presents an opportunity to differentiate. That is a valuable thing for them.
VIA SATELLITE: What are your capacity demands today?
Honeycutt: It is a correlation of demand and compression, so we have gone MPEG-4 in every market in the world. We realized that when going into an expansion mode, we need to be as efficient as possible.
VIA SATELLITE: What impact are these changes having on your delivery system?
Honeycutt: We have been investing in just this kind of capability, so things like WAN acceleration, MPEG-4, file transfer, etc. We wanted to become more efficient, but having said that, bandwidth is still bandwidth, and bandwidth is still expensive. You look at transponder costs, they can be expensive. Sometimes, you are talking in very high multiples. You have to be efficient. What you have seen us do is make significant smart investments where we could see a specific efficiency yield. That yield might not be currency. The yield might be time. It might be visibility into where those assets are. This is how we want to run this business. When you talk about infrastructure, you have to have the right tools, and you have to be able to move content where and when you need it.