Paul Guyardo, Discovery Communications's chief commercial officer, will be terminating his employment with the company to pursue other opportunities, effective Dec. 31, the programmer said.

Guyardo previously had been with DirecTV and was a key to Discovery getting into direct-to-consumer and over-the-top businesses.

Related: Discovery Puts Numbers on Direct-to-Consumer Business

Discovery will be treating Guyardo’s resignation as a termination without cause under his employment agreement, the company said in an SEC filing Thursday (Nov. 16).

The company said Guyardo has agreed to effectuate a smooth transition of his responsibilities, which will be allocated across existing leadership at the company, which is in the process of acquiring Scripps Networks Interactive.

Discovery said it does not plan to appoint another chief commercial officer in the near future.

This is being called the golden age of TV programming for scripted shows, in particular.

More shows than ever are being produced, viewers are binge watching them hours at a time through video on demand and streaming services like Hulu and Netflix. And media companies are making piles of cash licensing shows to streaming services, or using them to build their own subscription businesses.

Nonfiction programming has always been a bit of a stepchild in the programming world. People watch, sure. But even the best reality doesn’t get the same acclaim. Nor is it seeing the same kind of demand in this era of peak TV.

All of which leads to the question: What is reality programming’s value in an increasingly on-demand world?

While some nonfiction programming appears on Netflix and Hulu, the opportunities have been more limited.

“With respect to the subscription video-on-demand space, there has been no interest at this particular time in any of the reality types of programming,” one studio executive said.

Unlike networks, which need to fill a programming grid, buyers in an on-demand world are looking for shows that will give their services cachet and recruit and retain subscribers. “Reality is popular on networks, but it’s still viewed as voyeuristic. It’s not necessarily high-end programming,” the studio executive said.

Finding Viewers on SVOD
But as subscription services proliferate and mature, their attitude toward nonfiction could be changing. Viewers are watching more reality shows on demand. Streaming services are showing more interest in creating their own unscripted programming and adding existing shows to their offerings.

According to comScore, the top 10 rated reality programs for the 2016-17 broadcast season garnered more than 66 million VOD transactions, up 26% from the prior broadcast season’s reality programs. The gain came as overall VOD transactions dipped 3% from the prior year.

“I talk to people who produce shows for Discovery, Scripps Networks and A+E [Networks], and they all say they’re getting more interest from SVOD,” MoffettNathanson Research analyst Michael Nathanson said. “Given the price of scripted programming is going up, they’re looking at unscripted, which is less expensive, so they can raise their margins.”

Hulu currently pitches subscribers what it calls the largest offering of unscripted programming available on a streaming platform, with thousands of episodes from Scripps Networks, A+E and NBCUniversal.

“As SVOD programmers, we are always looking for content that will drive subscriber growth and keep viewers engaged,” Hulu vice president of content consumption Lisa Holme said. “We see unscripted series as an excellent driver of engagement and consumption, which correlate highly with retention. In the case of Hulu, we uniquely have a very robust advertising business, and so driving lots of hours of consumption is a priority for us, and unscripted can be a cost-effective way to balance the overall portfolio of content.”

Holme said Hulu subscribers watch a lot of unscripted programming. It accounts for a double-digit share of overall consumption on the service. “Outside of catching up on the latest episode of current series — The Voice, The Bachelor, etc. — we see a lot of viewing of character-based reality and competition-based reality, as well as, more recently, … food, home, travel-related series,” she said.

Prior seasons of broadcast series such as CBS’s Survivor and Amazing Race are popular, too. “People are often surprised that prior seasons of those series, as well as series like [Real] Housewives and [Keeping Up With the] Kardashians are consumed as much as they are on Hulu,” Holme said.

Netflix did not return calls seeking comment on nonfiction programming. Netflix’s reality offerings include Skin Wars, Tornado Hunters, America’s Funniest Home Videos and Undercover Boss.

Audiences as Loyal as Scripted Fans
TV networks say unscripted shows attract loyal audiences just like scripted programs.

“People want to be entertained, whether by scripted or unscripted,” Nancy Daniels, president and general manager of Discovery Communications’ s TLC, said. “They seek out what connects with them. We’ve seen big success with our shows even in this landscape where there are so many choices.”

While it’s harder to get viewers to watch reruns, Daniels said people watch old episodes of series like Little People, Big World to see what the characters looked like when they were younger. “The twins, Jeremy and Zack, have gotten married. They’re having children of their own. But you can go back to when they were 10 years old, starting out,” she said.

While TLC shows still get the bulk of their viewership on the linear channel, the shows that do best on the network also do best on demand or on the TLC Go app. TLC this year created an original spinoff of its 90 Day Fiancé franchise for the app called 90 Day Fiancé: What Now. “It’s been a huge driver for us on Go,” Daniels said.

Off-channel viewing is becoming an important factor in deciding which TLC series get renewed, Daniels said. “We’re not just looking at linear ratings anymore; we’re looking at overall audience engagement,” she said. “That’s certainly been an evolution for us over the last couple of years.”

App viewing is one way Discovery Communications is monetizing its mainly nonfiction programming.

“When it comes to Discovery unscripted, ours has tremendous value,” Discovery Communications chief commercial officer Paul Guyardo said.

Guyardo said that about 40% of what’s being watched on Discovery’s Go apps is library content, as opposed to current series. “Forty percent is a lot bigger than we thought,” he said.

For series on Investigation Discovery, people are streaming episodes they’ve already seen, “to pick up on clues that they didn’t catch the first time,” Guyardo said.

Discovery Communciations is not selling its programming to Netflix. It does have some shows on Hulu. The company is focusing on getting its core networks included on skinny bundles being offered by virtual distributors being rolled out by Hulu, DirecTV, YouTube and others.

Guyardo insists there’s demand for Discovery’s unscripted programing. “It’s our choice not to sell it in pieces, but rather to feature it all on our own digital platform or in skinny bundles, so we’re getting all the shows’ branding and equity.”

He added that Discovery’s programming is a good deal. “If you look at it relative to what distributors are paying for sports or paying for scripted, I would say we are an exceptionally good value.”

Producers said the subscription services are coming to them looking for original unscripted shows.

“Nonfiction may not be as sexy, but it’s very, very cost-effective,” said John Ford, a former Discovery executive and now general manager of NPACT, a trade association representing non-fiction programmers with about 100 member companies. “So you look at broadcast and cable any time of year, you take out sports programming, and many of the top 10, top 15, top 20 programs are nonscripted.

“You can create a pretty good nonscripted show for three or four hundred thousand dollars an hour,” Ford said. “On an hourly basis, you’re spending $3 million to create a scripted show. So you get 10 times the programming for your dollars in nonscripted.”

Ford pointed out there are already documentaries about food and wine on Netflix. Netflix has commissioned the producer of the acclaimed series Planet Earth to make an eight-part series, Our Planet, due to appear in 2019.

Netflix also has some older off-network nonfiction shows as well. “It’s interesting to look, just to troll through Netflix and see all the nonfiction shows that are there,” Ford said. “You’ll find inventory that I was executive producer on back in 2005 and 2006 still lurking in the inventory somewhere.”

Ford said the production of nonfiction programming for Netflix and the other streaming services flies under the radar because the shows don’t involve big stars and budgets. “What’s going on in nonfiction doesn’t necessarily claim the headlines, but I can tell you our members are actively pitching and producing for all of the OTT services,” Ford said.

Digital Is Key to The Workshop
Tom Farrell, CEO and executive producer for The Workshop, said his company is banking on selling shows to on-demand services. Last year, Amazon Prime green-lighted a series about tennis star Novak Djokovic produced by The Workshop, with Farrell as one of the executive producers.

“Everything that we develop has an eye on the digital world now,” Farrell said. “So while we’re still finding homes in the linear space, you would be foolish not to be looking at the digital component of our business.”

Production standards for on-demand shows might be higher than those for networks. “The viewer is so much more demanding because they’re going to it consciously, rather than stumbling upon it setting there on the couch riffing through the channels,” Farrell said. “You make a conscious decision, so I think your expectations are higher.”

Discovery Communications says it is making mid-form shows for Facebook’s Watch tab, which will feature original video programming.

The first Discovery show on Watch is Animal Planet’s Celebrity Animal Encounters (Facebook page), which launches next week.

Investigation Discovery’s Still a Mystery and a spinoff of TLC’s Say Yes to the Dress will appear in the fall, with more to follow, the company said.

Related: Facebook Adds Publisher Logos to News Articles

Financial terms were not disclosed.

“We’re thrilled to be partnering with Facebook because the new Watch platform shares our commitment to engage passionate fans and create communities through video," Paul Guyardo, chief commercial officer, Discovery Communications, said in a release. “This is also another example of our commitment to delivering compelling, original content to superfans across all platforms.”

Discovery Communications has unveiled the first installment of its multipronged direct-to-consumer strategy, partnering with motorsports publisher TEN: The Enthusiast Network, home of Motor Trend magazine, with auto-focused Velocity in a deal that will bring exclusive on-demand content to subscribers.

Discovery first talked about the strategy last November, shortly after the launch of its Discovery Go app. Along with that authenticated online version of its linear content (which is also tied to an existing multichannel video programming distributor subscription), Discovery also hatched the direct-to-consumer plan. Velocity is the first network to try the model.

Discovery is essentially forming a new venture with TEN — TEN: A Discovery Communications Company — led by Discovery chief content officer Paul Guyardo. Velocity executive vice president and general manager Bob Scanlon will become president of Velocity and TEN video content after the deal closes later this year.

“The overall strategy is to raise the awareness of some of the content that TEN is currently creating on different platforms,” Scanlon said in an interview. “On the Velocity side, the intent is to leverage our talent — the face of Velocity — [and their] popularity, that trust and expertise to create what I call content from the cutting-room floor.” Scanlon added that content would be more process-oriented, offering deeper dives into aspects of certain shows on-demand for a price. For example, on Velocity’s popular Bitchin’ Rides, an episode where the crew installs an engine into a vehicle could be shown in greater detail on-demand.

Scanlon added that the move is about tapping the rapport and trust the talent has built with the audience, “to convince them this content is legit, it’s OK and it’s stuff that you’re not going to get on Velocity. It’s really in the weeds for true enthusiasts.”

Scanlon said it is essential that the content provides something to viewers they can’t get anywhere else. But the segment seems ripe for the kind of detailed content Velocity wants to provide.

Packaging and pricing for the offerings haven’t been decided yet, but Scanlon said he has other ideas for the service as well, including taking a page from the traditional TV playbook.

“I’ve got some other ideas about creating the idea of appointment viewing behind the paywall, a show that would really require viewers to tune in at a certain day and time in order to see something time-sensitive,” Scanlon said. “That increases the value.”

Never mind the bundle. For Discovery Communications, it’s the platform, baby.

Turning a decade-old cable mantra on its ear — Cox Communications’s “It’s the Bundle, Baby” — Discovery is the latest programmer to test the digital content waters. By going all-in with the August nationwide launch of TV everywhere app Discovery Go and, more recently, striking deals to weave together short-form and long-form content from millennial- targeted websites and subscription video-on-demand, the programmer is looking to attract a younger, hipper and more lucrative audience.

Overseas, Discovery, which generates more than 50% of its revenue outside the U.S., is aggressively leveraging sports rights obtained via its Eurosport networks for a direct-to-consumer offering aimed at attracting and keeping younger viewers.

Discovery Communications CEO David Zaslav said Discovery’s digital strategy was actually hatched four years ago as viewership trends were changing toward multiple screens, devices and digital services like Netflix, Amazon and YouTube.

“We looked at the landscape,” Zaslav said in an interview last week, “and we asked: If people could watch anything they wanted on any device, how strong would we be?”

THREE-PRONGED PLAN

At the time, Discovery was at one of its strongest points. Its international business was generating about $1 billion in revenue and the company was the leading programmer in nonfiction. “If long-term, we’re going to be a robust and compelling content company to all age groups, we’re going to have to be on every platform,” Zaslav said. “Our brands were strong, but if people could watch everything, we would have some challenges.”

The solution was to embark on a three-stage attack: strengthening its networks by creating “super fans” for channels like Velocity, OWN and ID; reaching avid sports fans in Europe with Eurosport; and getting in position to offer content direct to consumers for free.

The last part of that three-pronged effort revolves around making new and existing Discovery content available on a wider variety of platforms, including TV Everywhere apps, online and digital video and, in Europe, a full direct-to-consumer offering.

READ MORE: For Discovery CTO John Honeycutt, digital is in the details.

Leading the charge is Discovery chief commercial officer Paul Guyardo, who joined Discovery about a year ago after a 10-year stint as chief revenue officer at DirecTV. A savvy marketer who led the team that helped grow DirecTV’s subscriber base from 15 million to more than 20 million, Guyardo is the point man in Discovery’s ambitious new plan, not only in charge of U.S. digital operations, but also taking over its Eurosports. com digital initiative in Europe.

Guyardo knows the direct-to-consumer business — he worked for Barry Diller’s HSN for several years and was SVP and chief marketing officer at discount retailer Kmart before joining DirecTV — and is assembling a top team to attack the digital space, including executive vice president and general manager of digital media Karen Leever; SVP and general manager of OTT and digital syndication Michael Bishara; newly promoted SVP of emerging platforms and partnerships Rebecca Howard; and managing director of Eurosport Digital Ralph Rivera, who helped launch the U.K.’s most popular direct-to-consumer product, the BBC iPlayer.

The push to digital is partly motivated by the dwindling traditional TV market, and comes after years of resistance to online video — which Discovery partly attributes to past carriage deals. Discovery has weathered the same ad-sales and distribution pressures as other programmers. In the past 12 months, domestic ad sales reversed course from a 6% increase in Q3 2015 to a 3% decline in Q3 2016. Internationally, ad sales declines have improved from a 14% decrease in Q3 2015 to a 6% decrease in Q3 2016.

Like many of its peers, the uncertainty has affected Discovery’s stock, which has declined about 9% in the past 12 months. And while ratings have softened over the past few quarters, Discovery points out that it still attracts about 8% of total viewership but just 4% of affiliate dollars.

“Every programmer is challenged with an ecosystem which is slowly declining as a function of cord-cutting, cord-shaving and cord-nevers,” Guyardo told Multichannel News. “Like all media companies, we are doing what we can to fortify that traditional business. But by the same token, we have to aggressively pursue alternative business to reflect the fact that viewership trends are changing.”

That includes investing about $100 million for a 35% stake in short-form digital content producer Group Nine, the home of pop-culture site Thrillist, news site Now This and animal advocacy site The Dodo. The idea is that, along with Discovery’s own science-based site, Seeker, and its digital production studio, Sourcefed Studios, the programmer will house its millennial-focused digital content under a single umbrella and a single salesforce, allowing the company to sell the full package to advertisers.

While Discovery is obviously optimistic, not everyone is convinced it can make a big dent in the digital landscape.

Asked if the efforts were too little, too late, Pivotal Research Group senior research analyst Brian Wieser said, “it’s just little.”

“They made an investment in a niche business,” Wieser said, referring to Group Nine. “It’s not going to allow them to call themselves a digital company. The bigger issue is: Are they developing content that survives and thrives in a world where more and more content is being consumed through dedicated apps or otherwise through streaming services?”

Guyardo doesn’t claim the shift will be easy, but he said he believes Discovery’s advantage is two-fold: It owns most of its content, and that content tends to attract what he calls “passionate super-fans.”

That allows the programmer “to go narrow and deep,” Guyardo said. “I have the luxury in this job that we own so much of our IP it allows us to be platform-agnostic.”

The platform increasingly matters: programmers are finding that digital distribution brings in additional revenue streams and can lure a whole new universe of viewers.

Discovery started dipping heavily into the TV Everywhere market last year, and its Discovery Go app is available in about 72% of the country, with full coverage expected in the next few years. Guyardo said TV Everywhere has helped draw in younger Discovery viewers. He said about 60% of TLC viewers and 50% of Discovery Channel watchers on the Discovery Go app are aged 18- 34. That compares with just 11% of that age demographic watching on linear channels.

And the streamed content isn’t any different from what is being aired on traditional pay TV.

“It’s taught us that a lot of the content that our network presidents and network teams are producing is quite relevant to a younger audience,” Guyardo said. “We just needed to put get it on a different platform to get that younger audience to consume it.”

The Group Nine investment builds on that concept by aggregating younger viewers under one corporate roof. And it gives Discovery a major instant digital presence — its brands deliver about 3.5 billion views per month — and strong credibility with advertisers.

“That puts us right up there with the likes of Buzzfeed,” Guyardo said. “Scale is a real calling card with advertisers; it’s what gets you in the door.”

Those younger viewers are also ripe for targeted ads and other forms of advanced advertising, all which have higher revenue potential.

Discovery also is taking a different tack with SVOD, launching two new OTT subscription services on Amazon’s Streaming Partners Program — True Crime Files by Investigation Discovery and Destination Unknown.

Amazon Prime members will get access to Discovery library for a small incremental monthly fee. At launch, True Crime Files will include library content from ID shows like I (Almost) Got Away With It, True Crime With Aphrodite Jones, Most Evil and Who the (Bleep) Did I Marry. Destination Unknown focuses on the paranormal and will include content from linear networks like Destination America, and series available at launch will include: A Haunting, Ghost Asylum and Mountain Monsters.

Zaslav called the Amazon offering an experiment, much like the company’s attempt to create a “sports Netflix” offering in Europe through its Eurosport Player, an OTT service that launched about a year ago and has roughly 250,000 customers paying about $7 per month for live streaming of tennis, skiing, soccer, cycling and other sports.

Zaslav said the European sports market is much like the U.S. was about 15 years ago, when ESPN first began to assert its dominance.

“In the U.S., sports took all the money, and was able to generate significant incremental value on other platforms,” Zaslav said. “Europe feels fresh. There is only one pan-European sports channel, and that’s Eurosport.”

Zaslav said Eurosport is in the second stage of a direct-to-consumer strategy, building the infrastructure and the teams behind the Eurosport Player efforts. “We have real ambition that could be a game-changer for our company.”

But the Eurosport Player isn’t totally without problems.

RBC Capital analyst Steven Cahall noted in a recent report that while the product has been successful, its customer reviews have been poor — he cited Google Play data that showed just as many customers gave the service a 1-star rating as a 5-star nod — something that its recent deal with MLB BAMTech can hopefully address. BAMTech, which counts Major League Baseball, the National Hockey League, HBO Now, the PGA Tour and WWE Network as clients, will provide the backbone for the Eurosport Player.

“If they can get it right, Eurosport’s vast portfolio of rights should drive growth from just 250,000 subs today to millions over time,” Cahall said.

Discovery Networks International CEO JB Perrette wouldn’t predict how much the Eurosport OTT Player could grow, but he said the potential, given the low pay TV penetration in the market — about 12% in Germany and 57% in the U.K. — is huge.

“We have 50-plus markets with over 700 million people,” Perrette said. “If we can get 1%, that’s 7 million people. “The numbers get big pretty quickly. And we feel like we’ve just started to rev the engine.”

Discovery first bought a 20% stake in Eurosport in 2012 and purchased the rest in a series of deals that ended in 2015. The sports channel committed $1.4 billion for European rights to the 2018 to 2024 Olympic Games and securing 45 Bundesliga soccer games in Germany beginning in 2017. It has also taken its nonexclusive Grand Slam Tennis rights exclusive and done the same for premier soccer rights in Norway.

‘REALLY MAKING PROGRESS’

Coupled with the opportunity to more aggressively market the product, Perrette said he sees ample runway for the direct-consumer service. “As we get the talent, as we get the product to be more world-class, we can actually start leaning into it and start driving the subscription funnel in a much more aggressive way.”

Discovery also is looking at different ways to exploit sports rights to create its “sports Netflix,” including offering season passes for particular sports, Zaslav said.

“Each of these initiatives is informing us of how do we approach a stronger relationship with consumers and how do we get more of our IP directly to consumers and which IP do we need more of to be successful,” the CEO said. “We’re excited because we think we’re really making progress. I think we’re really in the game of having Discovery be the media company that should be bigger and stronger in the next generation.”

SIDEBAR: Getting Game

Discovery’s Eurosport has invested heavily in sports rights over the past few years. Here are some of the properties it has purchased:

• Q115: Africa Cup of Nations (soccer), Australian Open (tennis), FISU Winter Universiade, World Championships (Alpine skiing, Nordic skiing, superbike, biathlon), FIS World Cups (winter sports), European Season Start (cycling).

• Q215: Spring Classics (cycling), FIA WTCC (touring car), World Championships (snooker), Giro d’Italia (cycling), UEFA Women’s Champions League (soccer), French Open (tennis), FIFA Women’s World Cup (soccer), Le Mans 24 Hours (motorsports), ATP & WTA tournaments (tennis).

• Q315: FISU Summer Universiade Gwangju 2015, Tour de France (cycling), UEFA European U-19 Championships (soccer), Bundesliga (soccer), World Championships (swimming, athletics), Vuelta a Espana (cycling), U.S. Open (tennis), Australian Football League.

• Q415: International China Championships (snooker), WTA & ATP Tournaments (tennis),Eurocup (basketball), FIS World Cups (winter sports), Season end (motorsports), World Championships (weightlifting), World Cup (biathlon), U.K. Championship (snooker), Four Hills Tournament (ski jumping).

SOURCE : RBC Capital

Discovery Communications made some management changes Thursday, naming former DirecTV marketing chief Paul Guyardo chief commercial officer, and expanding long-time executive Bruce Campbell’s responsibilities to include oversight of its domestic distribution business and its fast-growing Discovery Education division.

Guyardo joins Discovery officially on Oct. 5 in the newly created role, aimed at driving viewer engagement across all platforms.

“Discovery Communications has tremendous content and brands, passionate consumers and a world-class leadership team that I’m honored to join,” Guyardo said in a statement. “The potential for continued growth is enormous and I look forward to getting started.”

As chief commercial officer Guyardo will oversee U.S. ad sales, digital media, licensing and consumer products, consumer insights and data analytics and will report to Discovery Communications CEO David Zaslav. Guyardo will be based at Discovery’s New York headquarters. He was formerly executive VP, chief revenue and marketing officer at DirecTV

“Amid a rapidly evolving industry and shifting audience behavior, Discovery has maintained a steady, long-term growth strategy of investing in quality content, launching new networks and products and diversifying our IP mix to strengthen our brands and offerings,” Zaslav said in a statement. “Our go-forward success in a random-access world depends on how well we innovate and monetize our content and brands across platforms. Paul brings a track record of results in growing businesses and creating consumer-centric strategies to launch products, create new revenue streams and engage viewers. Adding him to the management team is a major win for Discovery, our business partners and our audiences, and I look forward to his leadership in creating new ways to drive value for our businesses across platforms now and into the future.”

As chief development, distribution & legal officer, Campbell will gain oversight of the company’s $1.4 billion Domestic Distribution business as well as of Discovery Education – Education president Bill Goodwyn will report to him. Cambell, who most recently served as chief development and legal officer, will be responsible for corporate development, including strategic planning and all M&A activity; all legal affairs, serving as the chief legal advisor to the company’s management and board of directors; business affairs; production management; and the company’s production studios.

Discovery’s brands are among the most widely distributed and highly valued in the world, and it is now more important than ever to innovate the ways in which we partner, distribute and position our company for growth,” Zaslav said in a statement. “Bruce has been my valued partner for many years, and has overseen the most significant business deals in our 30-year history. His strong and steady management style and thoughtful approach to Discovery’s future, coupled with his extensive experience working across our distribution renewals and education acquisitions, make him the right executive to oversee these additional parts of our business, and I look forward to his continued leadership in this expanded role.”