Discovery to Take Over London Uplink Center

Signs deal with Ascent Media for ownership, continued relationship in Asia

By Glen Dickson -- Broadcasting & Cable, 12/22/2009 2:44:13 PM

Discovery Communications has reached an agreement with Ascent Media Group to take over the London uplink center that Ascent built to support Discovery's European operations but will continue outsourcing technical operations for its networks in Asia to Ascent, the companies announced Tuesday.

Discovery has signed a non-binding Letter of Intent to transfer ownership of Ascent's Chiswick Park facility in London to Discovery effective February, 2010, while extending Ascent's role as Discovery's technology solutions provider in Asia, offering origination, uplink, post production and disaster recovery services out of Singapore. As part of the deal, Discovery will also participate on a trial basis as a content seller in Ascent's Global Media Exchange (GMX), the online media marketplace Ascent founded in 2008.

Financial terms of the deal remain subject to final negotiations, and completion of the transaction is subject to approval by both Ascent's and Discovery's boards and negotiation of binding, definitive agreements.

In 2005, Discovery retained Ascent Media to design, build and operate its London-based facility, which has the capacity to deliver over 60 television channels in the U.K., Europe, Africa and the Middle East. The 10,000-square foot server-based facility was designed to accommodate emerging formats including HD television, 3G mobile technologies and broadband content delivery. Over the course of five years, Ascent has launched more than 50 channels on Discovery's behalf.

"We designed and built the Discovery Networks Europe facility solely for Discovery's purpose," said Ascent Media CEO Jose Royo in a statement. "After providing comprehensive operational support for the last five years, now is the perfect time to turn over the operation to Discovery.  We wish them great success with the facility."

Taking ownership of the Chiswick Park facility makes sense for Discovery for several reasons, says Discovery Chief Media Technology Officer John Honeycutt. The facility is actually located within a large office building that serves as Discovery's European headquarters and houses some 400-odd employees, and taking it over will allow the playout operation to connect to other departments, such as editing systems in creative services.

While Ascent built the facility as Discovery was growing a relatively young European operation, that business is now established and Discovery has the necessary technical expertise in-house to run it. And owning the facility will also give Discovery more flexibility as it expands into more on-demand and online distribution of its content.

"We can do this ourselves and be more efficient," says Honeycutt. "That's not only on the core TV origination side. The real opportunity is about integration of this into the wider business."

Moreover, Discovery was the only client for the Ascent facility at Chiswick, while at Ascent's Singapore facility (formerly Group W's Asia Broadcast Center) there are multiple clients, including MTV and ESPN. That provides for economies of scale as Ascent invests in additional people or new equipment in Singapore, says Honeycutt, that it wouldn't get in Chiswick. Thus, the decision to "insource" versus "outsource" in London was easy, said Honeycutt.

"The fundamental difference between the situation in Chiswick and the facility in Singapore is it's a dedicated facility with us as the only client, and it's inside our office space," he says.

Discovery's relationship with Ascent in Singapore will stay the same, adds Honeycutt, and is planned to run through 2014.