David Haslingden CEO, National Geographic Channels International & National Geographic Channel U.S.; CEO, Fox International Channels

In the HD broadcasting world, National Geographic Channel (NGC) stands as one of the innovators of providing HD (high-definition) content. The broadcaster already has a number of HD channels on platforms around the world, however, NGC is not resting on its laurels as it looks to bring even more HD content to viewers around the globe.

David Haslingden, who joined National Geographic Channels International (NGCI) as CEO in December 1999 and was appointed CEO of Fox International Channels (FIC) in October 2001, is responsible for all global operations of National Geographic-branded cable and satellite channels across Europe, Asia, Australia, the Middle East, Africa, Latin America and Canada. He also is responsible for Fox Channels in all international territories.

NGCI’s combined reach exceeds 230 million homes in 163 countries and in 27 languages. NGC launched in the United States in January 2001 and is available in more than 64 million homes. As CEO of NGCI and FIC, he aims to further integrate both network operations

Haslingden talks with Via Satellite Associate Editor Mark Holmes about how the broadcaster is progressing with its HD strategy and the strategy for the next stage in content development.

VIA SATELLITE: How has the global economic credit crunch impacted National Geographic’s HD strategy?

HASLINGDEN: The crisis has impacted us, and in some markets more than others. In the United Kingdom, for example, it has been painful for us as well as the other multichannel operators and broadcasters that we compete against. We have suffered in every market. That said, unlike our colleagues that are just in the broadcasting business, we have been lucky to be sustained by our affiliate fees to some degree. We have managed to outperform most in the industry.

So while our financial performance during this period has fallen short of our pre-crisis expectations, our experience during the period has strengthened our view that the pay-TV model is a strong one, and that it is an astute investment compared to alternatives in the media field. So, ironically perhaps, the crisis has strengthened out desire to invest where we can strengthen our product, and HD is a great example.

VIA SATELLITE: Is National Geographic planning on ramping up the number of HD channels in certain markets over the next year?

HASLINGDEN: HD is a particularly important opportunity for National Geographic because our brand and our channels are synonymous with spectacular imagery. Whether it is the bottom of the ocean, a remote rainforest or different cultural aspects of the planet, people expect us to show it more vividly than anyone else. So for us, HD is a really critical technological development. It is one that we want to take advantage of as aggressively as we can because it enables us to tell our story better than we have before. As a result of this, when HD became a viable commercial opportunity for us as a channel provider, which was in early 2006, both in the United States and the United Kingdom, we were one of the first broadcasters to transmit our services in full HD.

Equally, on the production side, from early 2004, we started producing in full HD. Our success to date is pretty self-evident In the United States, we have been the number one network for five years running in the research brand identity study, which is one of the core research tools for following HD products in the United States. In the United Kingdom and Italy and other nature markets, we have seen enormous consumer satisfaction and demand for our HD products.

In terms of whether we will launch new channels, in the next 12 months, we will launch a number of new HD versions of the National Geographic channel and also the Nat Geo Wild channel. You would have seen the recent launch of the Nat Geo Wild HD channel in the United Kingdom, where it has been a great success. Natural history as an area works beautifully for HD.

VIA SATELLITE: Are there enough households with HD ready equipment to make this a compelling part of your content strategy now?

HASLINGDEN: HD is now critical for us. We don’t look at it in solely in terms of whether there are enough HD markets or enough HD-ready homes in the market to justify a launch. Our view is that over some period of time, and that period of time is going to differ market by market, everyone, or at least the vast majority of customers, is going to be looking at television in HD. We actively talk to platforms all around the world to encourage them to extend HD offerings to their customers. We point out the enormous success that platforms such as DirecTV and BSkyB have had being market leaders in making HD available to consumers. There are enough HD-ready sets out there. There is enough demand out there. We know for certain that if you provide consumers with great HD content, they fall in love with their sets and subscription service from their multichannel provider.

VIA SATELLITE: Do HD channels make strong business sense for a company like National Geographic right now? Are you able to get a strong return on your investment?

HASLINGDEN: When we talk about return on investment, we consider it differently, depending on the particular attribute of the business we are talking about. What is important for us about HD is that it allows us to really strengthen the emotional connection that we have with our customers. It is a way of ensuring, just by the use of technology, that our product is actually more enriching and enjoyable to consumers than it would otherwise be. There are not many opportunities that come along where technology will automatically have such a profound effect on the fundamental quality of your product. For us, building an emotional connection with our customers is what it’s all about, and ultimately it lies at the base of every profit we make. So we don’t look at the decision to launch an HD service in terms of the type of exacting return on investment over a specific time period that we might for other opportunities.
 

VIA SATELLITE: Is it a case of producing more HD channels or bringing the HD content you have to more markets over the next year?

HASLINGDEN: Over time we will have all of our channels available to consumers in both SD (standard definition) and HD. So there is certainly the element that with our existing products, where they are not already in HD, we must make them available in HD. Secondly, we have not got full distribution of all of our products even in SD in every market in the world. For example we don’t even have Nat Geo Wild in the United States. So should we launch, we’ll do so in SD and HD, and you’ll see this happening more and more.

VIA SATELLITE: When did all the content you produce or source from independent production companies move to HD?

HASLINGDEN: By 2006, we were producing all of our content in HD. We started producing in HD in 2004. Independent production companies are responsible for a lot of our content, and we have seen them move very aggressively to HD as well. Filmmakers the world over have been enlivened and revitalized about what they can do in HD. The costs of producing HD has followed the same trend we have seen in the prices of HD-ready TVs. They have collapsed over the last couple of years. HD film-making is being pursued by a huge number of producers. That is helping as well.

VIA SATELLITE: Has the adoption of HD outside the United States and the United Kingdom been slower than forecast?

HASLINGDEN: Certainly there are markets in the world where the penetration of HD subscription services is lower than projected three years ago. You need a combination of factors to ensure that there is going to be a reasonable penetration of people using or subscribing to HD services. You need the HD-ready TVs at reasonable prices in the market. We have seen the price of HD-ready TVs come down dramatically pretty much in every market, and that trend is going to continue. Secondly, you need multichannel operators to get behind HD to promote it and to add HD services to their offerings so that there is something meaningful for consumers to experience on their HD sets.

That is one of the reasons why we have been very vocal in trying to show platform operators around the world the huge competitive success that groups like DirecTV and BSkyB have had when they adopted HD as a differentiating element of the product they provide to consumers. Some territories are behind where we thought they would be, but others have exceeded our expectations. But the point is, there certainly are enough successes to show without a doubt that the HD product and the HD experience are markedly better. It is a terrific product for pay-TV platforms to offer to their subscribers.

VIA SATELLITE: Will you look to acquire more satellite capacity over the next year to bring more HD channels to pay-TV bouquets?

HASLINGDEN: We are technology neutral. HD is bandwidth hungry, MPEG-4 is helping with that. Technology gives and takes. That said, every year we are using more and more bandwidth. It is driven by the pace at which we are launching more services. SD and HD far outstripping advances in bandwidth efficiency. Going forward, we would expect aggregate bandwidth consumption by our group to increase at least 10 percent annum.

VIA SATELLITE: How many satellite pay-TV platforms are National Geographic HD channels on right now? How do you expect that number to progress over the next year?

HASLINGDEN: Satellite pay-TV operators have definitely been more aggressive in launching HD services then some of the competitors using different forms of delivery. I think that has been a very wise strategic move by them and has given them a competitive advantage over their cable competitors. We expect to launch on a number of new satellite platforms over the next year. As you can imagine, we are one of the first calls these new platforms make when they look to launch HD services.

VIA SATELLITE: How do you expect the HD landscape to develop over the next 12 months?

HASLINGDEN: In 12 months time, I am confident I will be in a position to tell you that many more multichannel operators found religion in HD. I think you’ll see platforms embracing HD, either because they recognize the competitive advantage of being first or the competitive necessity of catching up. I expect customers will renew their love for television and increasingly wonder why they ever watched anything that wasn’t in HD. And I dare say you will see a lot of happy satellite operators writing business.