When Discovery Communications and Scripps Networks Interactive merged in March, president and CEO David Zaslav tapped Scripps ad sales chief Jon Steinlauf to oversee advertising for the combined company in the hopes that he would apply his prowess for maximizing ad revenue to the entire Discovery portfolio.
Just three months later, Steinlauf is rolling out his first big offering for Discovery, Inc: a package that will allow brands to advertise exclusively in first-run episodes from a mix of the 30 most-watched shows across the entire company.
Called Discovery Premiere, the offering is launching in the middle of Steinlauf’s upfront talks but will be available immediately to brands willing to pay a higher CPM—Steinlauf said the package will be priced between cable and broadcast prime—for prime positioning in episodes with ratings that are as much as 90 percent higher than the prime averages on their respective networks.
Brands will receive first positions in commercial breaks, a specialized and elongated 10-second billboard between the program and their spot, integrations into promos for those episode and similar digital placement on the episodes via Discovery’s various Go apps.
The 30 or so shows and specials available via Discovery Premiere include the most popular programs on Discovery (Deadliest Catch, Gold Rush, Shark Week), Food Network (Chopped, Iron Chef Gauntlet), TLC (Trading Spaces, 90 Day Fiancé), ID (On the Case With Paula Zahn, People Magazine Investigates), HGTV (House Hunters, Property Brothers) and OWN (Queen Sugar, Greenleaf, The Haves and the Have Nots).
Steinlauf said he was inspired by AMC’s approach in selling its highest rated shows like The Walking Dead and Breaking Bad and its ability to package them in a way that ensured they were getting paid “full value” for those shows.
AMC might have been first out of the gate, but “no one’s been able to go 30 shows deep and have the rating levels hold up the way we can as a combined company,” he said of Discovery and Scripps. “Either one of these companies independently could have tried this, but it’s a much more compelling offer when you bulk it up and you can go 30 shows deep.”
Given all of the changes in the industry, “I’m looking for creativity and strategy to be able to bring to our clients and say, the world is changing,” Steinlauf said. “We can’t just look at, ‘What happened last year? Did I get those spots in Deadliest Catch, and what did I pay for them?’ Some of these old practices have to go out the window, because we’re in a different world right now.”
While the broadcast prime-time market “remains the gold standard of entertainment television CPMs, but it’s not what it once was” as ratings have fallen, Steinlauf said. Now, he added, the industry needs to redefine what a hit is and how people are paying for them.
“In my opinion, If you can hit a live-same day .7 or 8 in adults, or a 1.0 or 1.1 in women, in today’s world, you’re a hit show,” Steinlauf said, noting that last Tuesday, OWN’s The Haves and the Have Nots was the third most-watched show among women 25-54 in all of TV with a 1.43 in the demo, behind only America’s Got Talent and World of Dance on NBC.
“We have big hits and we have the off nights, but when we have a big hit, we have a responsibility to monetize it. We can’t just let those spots go by and say, so what if it’s No. 3 in all of television? We’ll just put in the rotation prime OWN CPMs, whatever they are,” Steinlauf said.
Discovery sent details of the Discovery Premiere packages two weeks ago to a dozen companies in categories like automotive, consumer-packaged goods and technology, but Steinlauf is keeping expectations low.
“We’re not expecting a lot of takers for the first go-round with it,” said Steinlauf, who expects to sell a dozen packages initially. “We’re testing the waters right now, but Discovery Premiere we see as a product that’s built for the long-run. This is an idea who’s time has come, and we’re the company to do it.”
Each network’s traditional “rotation buyers” will continue to appear in some of these episodes, the Premiere package offers more A positions (the first spot in a pod) for advertisers, and “customized, elongated” 10-second billboards between the show and pods, compared with the standard five-second billboards.
Steinlauf said he is “flexible” on the number of Premieres shows clients would want to appear in as part of the offering. Some shows are grouped together in specific demos, like women 25-54 and adults 25-54. And all of them include digital inventory on the Go apps for those episodes.
Go is “the fastest growing segment of our ad business by far,” with ad sales doubling year over year,” said Steinlauf, who called the apps a “natural complement” to the linear episodes because the most popular shows streamed on Go are also the most-watched linear shows.
Steinlauf’s Discovery Premiere offering shows why Zaslav picked him to lead ad sales for the combined company as chief U.S. advertising sales officer. At Discovery, Inc. “we’re approaching $5 billion of gross advertising sales [domestically] as a pure-play cable networks company,” Steinlauf said.
Former Discovery ad sales chief Ben Price, who was passed over for the top job, announced in April that he would be leaving the company after upfront deals are completed.
Speaking of the combined Discovery Inc.’s first upfront, Steinlauf said negotiations are “halfway” done. “There’s been a lot of conversation in this upfront and last year’s upfront and the one before that about the challenges of supply, but what I’m most pleased about is the stability of demand,” he said of this year’s market. “Television has proven in this market to be resilient once again because the demand is stable.”