Discovery Networks U.S. last week tapped company veteran John Ford to head its new-media division, comprised of Discovery HD Theater, Discovery Interactive TV, Discovery.com and the networks' various VOD initiatives.
Ford had been president of the network's content group, with responsibility for all domestic TV programming, as well as Discovery.com. But the group's core TV-programming decisions have been shifted to Discovery Networks U.S. president Billy Campbell, who was named to that post earlier this year.
Prior to running the content group, Ford headed the Discovery Health TV network and Web site. Over the past two years, Discovery has aligned its Web sites more closely to the TV properties, with the goal of driving viewers to the video channels.
For instance, Discovery.com lost $100 million in 2000, but was able to cut those losses by 85 percent through staff reductions and a closer alignment with the networks.
"And traffic is up 20 to 25 percent," he added. "On a much lower cost base, we can achieve substantially higher traffic levels."
Advertising remains the primary driver of revenue for the Web sites, but Ford said the company has started discussions about developing subscription services.
"We're looking at licensing content," he said.
But Discovery will "never stream online what you can watch on TV," he added. "Our primary job is to feed viewers to TV networks. That's where the sweet spot is right now."
Discovery became the first basic-cable network to produce HD content with the June 17 debut of Discovery HD Theater. The service launched with 100 hours of already-produced HDTV programs, and will add another 55 hours of fare over the next six months, Ford said.
EchoStar Communications Corp.'s Dish Network launched Discovery's HD service in June, and began charging $7.99 a month for it on Aug. 1.
Cox Communications Inc. has launched the HD service in Las Vegas for $4.99 a month, with two more rollouts scheduled soon, Ford said. In Las Vegas, the $4.99 charge is levied on top of a $10 a month fee to make current set-top boxes HDTV-ready.
Some 80 percent of subscribers who take the $10 HD plunge are buying Discovery's HD service, said Ford.
And with Federal Communications Commission chairman Michael Powell pushing cable operators and programmers to increase their high-definition offerings, Ford said he believes he'll have several more deals with MSOs by year's end.
"The demand appears to be there," he said.
Discovery offers two VOD packages to operators. Its free on-demand package, Choice 10 Discovery, includes a sampling of top programming from Discovery's various networks. A separate Discovery On Demand subscription VOD package, which contains higher-profile programs, is also being pitched to cable operators.
Interactive TV isn't as dead as some people may believe, Ford said. Discovery has been working on ITV projects with Wink Communications Corp. and various middleware vendors for several years.
Last year, AT&T Corp. bought a traditional advertising package that included an interactive-TV element. As long as the incremental interactive ad revenue covers the cost of doing the interactivity, and then some, Ford said, Discovery will pursue ITV.
"Quite a number of those deals have come through," he said.
Ford is a longtime veteran of The Learning Channel, having joined the network in 1991 as head of programming. He stayed with TLC after Discovery Communications Inc. bought the network, and became president of Discovery Health Channel and its associated Web site in 1999, prior to being named president of the content group.
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