David Lyle CEO, National Geographic Channels U.S.
National Geographic is a powerful brand with broadcasting channels that can be found around the world, which make valuable editions to any pay-TV platform. However, like most broadcasters, it is faced with a new set of challenges as it looks to monetize its various channels going forward. It has expanded its channel presence in recent years with the launch of Nat Geo Wild and Nat Geo Mundo.
David Lyle, CEO, National Geographic Channels (NGC) U.S., talks about how the company is working to deepen the presence of National Geographic content around the world, and where in terms of the broadcasting space the company goes next.
VIA SATELLITE: What are the main challenges facing NGC during the next 12 months?
Lyle: Our main challenge is to develop hit franchise TV series across the networks and across the world. We have had some successful series in the past, but it is a programming challenge first and foremost.
VIA SATELLITE: How are the costs of the production changing as you look to put content in multiple formats?
Lyle: As we provide much of our material on a global basis, we tend to be paying the entire production costs of that material. Splitting up the different platforms, rights and windows, doesn’t impact the way our production costs look, but it certainly impacts the backend costs.
VIA SATELLITE: Are you looking to launch any new channels?
Lyle: We are not looking to launch any new channels at the moment, but there are different language versions of channels you can choose to do or not. The engine for our growth is content, rather than pure platform-based initiatives.
VIA SATELLITE: How does NGC use satellite technology? How important is it in your overall operations?
Lyle: Satellite is part of our DNA. It is the spine that keeps our body together. Because of the global nature of the NGC, including the core channels, Nat Geo Wild and Nat Geo Mundo, there is not a corner of the Earth that does not have National Geographic somewhere. Satellite is important as a direct deliver to consumer in different parts of the world. Here in the United States, we deliver our programming from Los Angeles to the various MSOs by satellite and we also have Dish that carries us.
I am afraid I am not an evangelist for 3-D TV. I definitely reside on the other side of the street. It is a technology, not an end product.
VIA SATELLITE: With the emergence of the iPad and other tablets as viewing devices, what do you see as the revenue opportunities associated with these devices?
Lyle: The main company strategy for those devices involves authentication with our MSO partners. We allow the consumer to receive our linear signal on whatever devices they want, but through an authentication process. At the moment, with our libraries of material, we are mindful of those devices and we are looking to see how they grow. National Geographic Channels around the world are a co-venture between Fox and National Geographic Society as well as Sky, but the society itself has a lot of direct-to-consumer applications and extensions of the National Geographic magazine. At the moment, our path to these different platforms is going through the authentication path, as it allows us to monetize our advertising and C3 ratings.
VIA SATELLITE: What impact is Over-the-Top (OTT) broadcasting and streaming technologies having for traditional broadcasting?
Lyle: At the moment, it is obviously hovering around the edges, but it is not having a financial impact on us. I really struggle to see how these are going to provide sufficient heft to cause television programmers to impact their strategies.
VIA SATELLITE: Could you tell us how you handled the transition from SD to HD?
Lyle: It was in February 2005 that we went HD. NGC launched in HD in 2006. So, we have more than 55 million households taking NGC HD channel. It is, not surprisingly, one of the most widely distributed HD networks. Throughout a consecutive period of six years, we were the number one most requested HD network. Our Nat Geo Wild programming and a lot of those blue chip documentaries look superb in HD. It was something that we realized very early on that HD was the way to go. It is a great differentiator for National Geographic. As for the original transition, early on in 2005-2006, we had the normal sort of problems whereby we were working with third-party producers — some were more tuned into this than others. But now, it is just the norm.
VIA SATELLITE: What are your views on 3-D TV?
Lyle: I am afraid I am not an evangelist for 3-D TV. I definitely reside on the other side of the street. It is a technology, not an end product. People are not going to watch programs just because they are in 3-D. They want to watch this program and it happens to be in 3-D, but I don’t discern a huge desire by the public to watch content in 3-D. So I don’t see 3-D TV on the horizon for us and we don’t have anything planned. However, the one thing we have to do at all times is remain nimble to new technologies and changing economic models. And never, say never.
VIA SATELLITE: We are beginning to see discussions take place on 4K TV and Ultra HD. Are you already starting to think about these technologies?
Lyle: They are not on my radar screen at the moment. I know some of the technical people continue to look and learn. Really, we see ourselves servicing the consumer, rather than the industry.
VIA SATELLITE: What major infrastructure projects are National Geographic Channels working on?
Lyle: We are now at a stage where our distribution is pretty much file-based, with 75 percent of the content generated in the United States going to the National Geographic Channels around the world. So, our file-based system allows us to have global distribution without tears. It involves more memory and more storage to make those distribution processes smoother, so internally that is a constant upgrade that we are doing.
VIA SATELLITE: Where are you targeting growth for the company? Are you looking to deepen your presence in Latin America and Asia?
Lyle: Asia and Latin America are star performers for us. We have been in Latin America for a long time, and we have a very strong presence there. Asia has continued to be a great market for us, but it certainly has the ability to grow — especially South East Asia. However, we are looking to grow the business in India and are putting a lot of time and effort into this.
VIA SATELLITE: What trends do you see emerging in broadcasting during the next 12 months?
Lyle: The trend on the programming side is to establish must-see TV programs. So, we need to generate passionate fans that are going to undoubtedly consume content on a number of devices. It has always amused me that with every methodology of viewing moving images, the time spent viewing this always goes up. It is not like it is a finite pie that gets sliced in different ways. New platforms mean more time viewing. In content terms, franchises that break through the clutter are crucial for us. On the technological side of the business, we have two major forms of revenues — advertising revenues and subscriber revenue from affiliates. I do watch constantly to see what forms of distributions are out there, and to what extent the NetFlixs’ and the Hulus’ become a viable form of additional revenue.