Opening Channels All Over the Globe

Discovery International’s Mark Hollinger leads some of the company’s fastest-growing businesses

Why This Matters

Mark Hollinger

President/CEO, Discovery Networks International

B.A., Colgate, 1981 J.D., Yale Law, 1985

Paul, Weiss, Rifkind, Wharton & Garrison, senior associate, 1985-91
Columbia Law School, lecturer, entertainment law, 1988-91
Discovery Communications, VP/ deputy general counsel, 1991-94
Discovery Channel Asia, acting GM, ‘94 Discovery Communications, VP international business development/ VP, deputy counsel, 1995-96
Discovery Communications, general counsel, 1996-2001
Discovery Communications, EVP, corporate operations, 2001-03
Discovery Communications, senior EVP, corporate operations/general counsel, 2003-07 Discovery Communications, COO, 2008-09
Current position since Dec. 2009

Married; three sons, ages 11, 13, 16

As Discovery Communications heads into 2011, international
operations will once again likely be one of the company’s brightest
spots. With 20-plus networks reaching more than 1 billion cumulative
subscribers outside the U.S., Discovery International’s revenue jumped 13% to $893 million—nearly
one-third of the company’s total—in the first
nine months of 2010. Even better, international
operating income before depreciation and
amortization (OIBDA) jumped by 30%, much
faster than the 9% growth seen by Discovery’s
U.S. networks in the same period.

“There are certainly a lot of international markets
where growth rates will be higher than in the
U.S.,” notes Mark Hollinger, Discovery International
president and CEO. “So we think a substantial
portion of the company’s growth overall
will come from international markets.”

While Hollinger has been running Discovery
International for only about a year, the 19-year
Discovery veteran has been with the company
almost from the start of its global expansion.
After getting his law degree in 1985, Hollinger
cut his teeth in entertainment law working at
the prominent law firm of Paul, Weiss, Rifkind,
Wharton & Garrison, but he and his wife eventually
decided they wanted to move out of New
York City. “Since I wanted to stay in the entertainment
industry but didn’t want to be in L.A.,
that really limited the options,” he recalls.

Fortunately, in 1991 a job opened up at Discovery
in Maryland and Hollinger joined as just
the third lawyer in the legal department. While
Discovery was a much smaller company in those
days, it had big international ambitions and was
one of the first U.S. programmers to go global,
bowing a European channel in 1989. Soon after
Hollinger joined, Discovery bought out the joint
venture partner of its European channel; in 1993,
the board approved an aggressive plan to roll Discovery
out all over the world.

1994, Hollinger volunteered to get the
Asian service off the ground, spending six
months in Hong Kong to launch Discovery
Asia. After his return to the U.S., he kept his
hand in international markets, working on
deals that brought Discovery into Japan, India,
Germany, Italy and a number of other markets.

As Hollinger rose through the ranks in the
1990s and 2000s, becoming general counsel
and eventually COO, the company launched
many of its other channels internationally and
developed region-specific services.

That has made global distribution increasingly
important to Discovery’s programming development,
with some projects from international
channels making their way into the U.S., and
funding from international channels allowing
Discovery to develop even bigger projects.

“Roughly two-thirds of what we air on the Discovery
Channel internationally has been a coproduction
with the U.S. channel,” notes Hollinger.
“It gives us a great aggregated funding model….If
Discovery U.S. knows that 40% of the programming
budget can come from international, the
math works great for them, and great for the international
channels as well.”

That programming model, combined with
highly efficient operations that deliver more than
100 feeds in over 40 languages from only three
network transmission centers, has produced
some of the highest international channel margins
in the business, Hollinger says.

With growth in affiliate fees having slowed,
gaining only 6% in the first three quarters of
2010, Hollinger’s team has embarked on a major
push to both strengthen affiliate relations
and expand ad sales, which grew by a 34%
clip. “We see a lot of headroom on the ad sales
side, which is one of the reasons why we are
putting a lot of emphasis on a bigger, stronger
mix of channels” targeting a range of demographic
groups, he explains.

To that end, Discovery has launched a major
effort to expand the female-skewing TLC service
internationally to complement its male-targeted
brands. “TLC is already in 50 million homes, and
we have targeted reaching 100 million outside
the U.S. by the end of next year,” Hollinger says.

The new OWN service will have distribution
in Canada, but Hollinger says it’s too early to talk
about other international plans for OWN.

All of Discovery’s channels are customized
for local markets with original fare, and Hollinger
is planning to expand international
production even further. This fall, Discovery
created a new international production and
development unit and announced plans to signifi
cantly expand the amount of programming
it produces in Russia, where it will have seven
networks when TLC launches there in 2011.

The company is also continuing to expand
its HD feeds, already available in more than 80
markets, and is looking for ways to take the lead
in 3D programming. Discovery’s joint venture
with Sony and IMAX to launch a 3D channel
applies only to the U.S.; Hollinger is currently
exploring international options for both linear
and VOD offerings. In the U.K., for example,
Discovery has already sold 3D content to cable
operator Virgin Media, which will begin airing
the shows on demand in early 2011.

When not traveling for work, Hollinger admits
that his family’s favorite activity is to, well,
travel. So far, Hollinger, his wife and their three
sons have focused on Europe and the U.S. But
he notes that his sons have been lobbying to go
to Asia, where he got his start internationally. “It
could be our next big trip,” he says.

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