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Business News/ Companies / News/  We’ve not cracked digital monetization model: J.B. Perrette
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We’ve not cracked digital monetization model: J.B. Perrette

The president of Discovery Networks International on the value of deploying content on different screens

Perrette says in second quarter, revenue of international operations at $802 million was higher than US revenue of $777 million. Photo: Priyanka Parashar/MintPremium
Perrette says in second quarter, revenue of international operations at $802 million was higher than US revenue of $777 million. Photo: Priyanka Parashar/Mint

New Delhi: J.B. Perrette, appointed president of Discovery Networks International a few months ago, was the keynote speaker at the CII Big Picture Summit in New Delhi last week. London-based Perrette, who oversees the company’s 46 entertainment brands outside the US in over 200 countries, was its chief digital officer and led the acquisition of several digital media firms. On the sidelines of the conference, he spoke of the value of deploying content on different screens. Edited excerpts:

You mentioned that Discovery is larger outside than in the US. Any numbers you could share?

This is the first time in the second quarter that the revenues of international operations at $802 million are higher than the US revenue of $777 million.

Which is your biggest market outside the US?

We acquired a big broadcast group in the Nordic region, Scandinavia. So the Nordic markets—Sweden, Norway, Denmark—are our biggest markets.

Which are the three strongest brands in the portfolio?

Which is the strongest is a hard question to answer…biggest in terms of ratings and audiences is easier because we have some very strong brands. Science, for example, is a very powerful brand but that may not be as big from an audience standpoint. But Discovery is clearly our flagship brand, Animal Planet and then TLC. From a distribution standpoint and audience perspective, those are the big three.

Do all your 46 brands make money?

We don’t talk about profitability per channel basis. We have 13 brands in the US. A lot of the 46 are outside the US. And what we have done in a lot of markets is not be prescriptive about programmes and scheduling. We let the market decide how to best position each programme and schedule. For example, we have Discovery Kids in India but it does not exist in the US. Home and Health exists in parts of Asia but does not exist in the US.

We enable each of these regions to decide how best to position and roll out brands that make sense for that particular market. In revenue terms, India is our largest market in Asia.

You have been acquiring a lot of digital companies globally. Have you cracked the monetization formula?

The short answer is, no. I am not quite sure if we have acquired a lot, we have quite clearly divested a lot.

We have the Animal Planet which is a powerful brand and the owner of animal space in the television business, and we bought a company called Petfinder, which was in the pet adoption space—two genres which talk about the same subject. But one is in entertainment and one is a service. Genre-wise they are the same, but it was very hard to find synergies…so we ended up selling that company. We sold HowStuffWorks.com and Treehugger.com also.

We refocused on our core, what we do and what we are—a sight, sound and motion storytelling company. There is a whole new medium of sight, sound and motion storytellers being developed online. So, we acquired a company called Revision3, which is a leader in online video space. When we bought that company, it had less than 100 million streams a month and now it is doing 300 video streams a month.

The monetization models are still very much in development. So, have we cracked it? No. We are still doing a lot of experimentation, a lot of learning on what the optimal monetization model is.

But you acquired Lumosity and Learnist.

We invested in, not acquired. They fit very much within the brand purpose, which is about igniting and satisfying curiosity.

Lumosity is a brain fitness company that develops games to improve cognitive skills. We have an education business in the US and now in the UK and a few other parts of the world.

So, our education business, our brand purpose and this brain fitness, in a subscription world is an interesting model.

We did the same thing with Learnist, which is a social learning platform.

Will these brands come to India?

Lumosity actually has launched in a couple of markets. It is globalizing slowly. But the English language version is actually available and has a fairly large international subscription base. People have learnt about it even though it is technically not launched in India.

Are you looking to acquire or invest in such smart companies in India?

We can’t obviously talk of specific things, but we are always looking at ways to evolve the business. Our core focus is our channels business and our organic growth story.

But as time goes on, we are always looking to see things that might complement our portfolio.

As consumers divide their time on multiple screens, what is the impact on the television?

More screens mean more opportunities for people to watch. And more opportunity to watch means more chances that they are going to watch, which means more viewership for us. So that is an incredibly good thing for us. As you get more screens past digitization, it will enable us to have access to more data. Digitization and the multi-screen kind of go together in personalizing the media experience much more and enabling a viewing experience that is integrated and seamless across all these different screens.

Isn’t the advertising dollar shifting online?

There is a lot of talk about it. Compared to the television business, it is still small. The opportunity in the television industry is that our content moves to the multi-screen world. The ability to actually provide advertising partners, targeted solutions, new apps formats, etc…we are barely scratching the surface of that world.

At Discovery, what is the ratio of advertising versus subscription?

It is about 50:50.

Is advertising growing you?

Absolutely. Advertising is a growth engine for us. We have seen double-digit advertising growth for multiple consecutive quarters. On an aggregate, our portfolio has been growing in teens for many quarters.

Are you bringing new brands to India?

Always looking. We have launched three channels in the last 12 months and are constantly looking to tailor new brands to Indian audiences.

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Published: 22 Sep 2014, 12:00 AM IST
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