Discovery Communications Inc., whose ratings have declined at two flagship networks, stripped control over program production from the managers of its 15 U.S. channels and centralized it under a veteran executive, the company said yesterday.
Under the new arrangement, Discovery's roughly 100 production employees, who work with the independent producers who make the shows, will be grouped by genre rather than by network -- focusing their attention on animal, history or travel shows, for example, rather than on shows for a particular network. They will report to Clark Bunting, who assumes the newly created post of president of Discovery Productions U.S.
While managers will approve shows, Bunting will be in charge of their production. Discovery made a similar change in 2001 when it centralized marketing for the networks under a single executive.
"Through centralized production genre groups, we can develop more internal expertise in each category, build stronger external contacts and increase consistency in the quality of the productions across our networks," said William M. Campbell III, president of Discovery Networks U.S.
The company also recently reduced its charitable contributions, stopped a car service, eliminated first-class travel for executives and reminded its employees that happy hours and lunches can't be expensed.
Citing "an increasingly competitive and at times uncertain revenue environment," Campbell told managers in a memo that they should also use black-and-white drafts when preparing color presentations, reduce the use of consultants and headhunters in recruiting, and halt all off-site meetings. Company officials said the reorganization of program production had nothing to do with lower ratings or the need to reduce expenses.
"This is not about cost-cutting but how to produce the most original and creative product," said David C. Leavy, a company spokesman. Earlier this year, ratings for Discovery's TLC network declined by as much as 33 percent. Ratings at the Discovery Channel also declined, though both have since rebounded, Leavy said. Discovery Channel received its highest ratings this year for the Sept. 11 broadcast of "The Flight That Fought Back," a reenactment of United Airlines Flight 93, which was hijacked on Sept. 11, 2001, and crashed into a field in Pennsylvania.
The lower ratings and a weak advertising market had prompted some analysts to lower their forecasts for Discovery Holding, the recently created, publicly traded company that owns 50 percent of Discovery. The other owners are privately held Cox Communications Inc. and Advance/Newhouse Communications Inc. Advertising revenue for the U.S. networks was flat for the first six months of the year, Discovery Holding reported in an August filing with the Securities and Exchange Commission.
Before yesterday's announcement, Discovery had replaced TLC's general manager and reworked its fall schedule, adding shows such as "Miami Ink," a reality series about a tattoo parlor. The Discovery Channel added "Going Tribal," in which host Bruce Parry immerses himself in different cultures. In the first three weeks of September, the number of households watching the Discovery Channel rose 13 percent, company officials said.
Shares of Discovery Holding closed yesterday at $14.70, down 9 cents.