A Curious Discovery: An Entrepreneur's Story

by John S. Hendricks

In the past, we have invested in series that have told stories about dinosaurs, human evolution, ancient civilizations, space travel, and the conflicts of modern society. Internally, we refer to these big subjects as “mission programming”: programs and series designed to convey the details and intimacies of a significant topic. As you might imagine, these are very expensive endeavors; in television, “depth” is tough. That’s why most television is shallow. Our viewers tell us that they are grateful for the difference, but frankly, even if they weren’t I’d still do mission programming. Sometimes you need to follow your heart.

Documentary television and nonfiction entertainment have always been about the real world.

No one realized the opportunity for this new reality television format more than Eco-Challenge producer Mark Burnett. Mark quickly went to work on a new series concept that he called Survivor. And he offered it to us. In a decision that is still debated within the halls of Discovery, we declined Mark’s invitation—and missed one of the great breakthrough series in television history. Why did we pass? The short answer is that although Survivor was, and still is, a masterful concept in pitting contestants against each other in dramatic situations, the series just seemed a bit too contrived for the real-world brand we’d cultivated for Discovery. Sure, we were willing to experiment on the TLC brand with invented situations, such as those predicaments in Trading Spaces. But Survivor was just one bridge too far. Sometimes you just have to defend the brand, even in the face of appealing opportunities—and this was one of those moments.

Consider the Science Channel. As I learned all of those years ago, this channel is never going to appeal to more than 25 percent of television viewers, the information seekers. That means, over the course of a month, that of the 80 million households who receive Science perhaps 20 million will actually tune in. You can see that as bad news, but for me it is a positive: most companies can only dream about their product being useful to 25 percent of the entire population.

Like other cable networks, we have established our presence in the consumer mind through powerful brands. Consequently, consumers are loyal and dedicated to their cable channels in a way they are not to broadcast networks. They come back to cable because of the promise we have made about what they can expect—our consistency. The temptation, always, is to drift from the core promise to chase a larger potential audience. But when you stray off brand, you may gain some new viewers, but they will not be the ones who are really attracted to your core programming. We’ve experienced it at Discovery, and I have seen it elsewhere: when a cable network drifts off brand, it may enjoy a short-term ratings bump—but then the numbers shrink again because the core audience has been driven away. Once you are not predictable anymore, not true to your brand promise, your core audience tunes out. This was true in the world of fifty channels, and it is even truer in the world of five hundred channels. It will be absolutely crucial to stick to brand promises as we embark on the next phase in television’s evolution.

Entrepreneurs, myself included, are somewhat “creation addicted.” And because of our success in witnessing our dream come to life, we are often overly confident or optimistic in the potential market response to our next big idea. Entrepreneurs are guided by emotion—which is valuable, to be sure—but business sustainability and growth require that emotion be tempered by rigorous and thoughtful analysis. Again, it is a matter of balance—and, in my opinion, no entrepreneur can successfully embody both the “passion” and the “discipline” required to create an enduring company.

To endure over the long term, I believe companies must continually address and be mindful of key survival questions discussed in this and the previous chapter. Does the company’s brand stand for a purpose or cause and is that brand carefully protected and guarded? Are the founding entrepreneur’s passion, obsession, and zeal complemented by the recruitment of experienced and skilled management team leaders who bring the discipline required to steward corporate assets over the long haul? Does the company have ready access to capital and does it have publicly traded stock “currency” that can be used to acquire companies important to achieve economic scale and business leverage? Are the interests of shareholders, employees, executives, and board members aligned and incented to produce long-term revenue and cash-flow growth?

Then Zaslav and his team, identifying forensic science and crime solving as a popular theme with viewers, rebranded the channel as Investigation Discovery (ID). He next hired a strong, passionate leader to run the reborn channel: Henry Schleiff, at the time president and CEO of Crown Holdings, and prior to that post, chairman/CEO of Court TV. Under Schleiff’s direction as president and general manager, Investigation Discovery grew into one of America’s top networks thanks to its fast-paced and provocative programming. Henry’s pick of respected television journalist Paula Zahn to host On the Case with Paula Zahn set just the right tone and promise for Investigation Discovery.

Before David left for Chicago, we discussed the basic 50–50 structure of the joint venture he proposed. We would contribute the distribution base of Discovery Health, along with content rights and cash funding that we would recover out of the network’s first profits. Oprah, for her part, would contribute content rights, a half interest in Oprah.com, and her leadership of the new channel. In other joint venture channels, such as with the New York Times, Discovery had always insisted on editorial control. With Oprah at the helm of a channel bearing her name, we felt confident in her having total editorial and creative control.

By the same token, I knew Malone had an interest in an automotive channel because of the evolving technologies involved in cars. “A great way to teach physics and engineering,” John commented after I brought up the topic at a board meeting in 2006. Malone’s words echoed in my mind as I watched my own son Andrew’s growing fascination with cars.

As a five-year-old in 1957, I was already captivated by a world full of automobiles. Like many American boys of the era, I memorized the names, models, and years of every car I saw—and, as already noted, my father delighted in showing off my knowledge to his friends. To a child growing up in the mountains of West Virginia, cars represented adventure and exploration.

Like countless other boys across America, I devoted much of my childhood to model car building—and relished the successful completion of every Chevy, Ford, and Chrysler. In school, I perked up when the teacher told us where rubber came from, how friction stopped a car, or how a battery stored energy. Science, nature, history, and geography just seemed to sink in more when there was a car involved.

It wasn’t until we were several years into broadcasting this new generation of reality shows that it suddenly hit me that, without noticing it, Discovery had quietly broken through the cultural barrier that had always defined the company. As you’ll remember, that principle with which I had founded the company was that 25 percent of the population would be interested in “educational,” as opposed to “entertainment,” television. But, with these shows we had found a new formula: we were creating nonfiction television that could be both educational and entertaining. Are these shows as information-rich as our science documentaries? No, but they are bringing an almost unprecedented amount of information to audiences that normally would never watch educational television. Having fulfilled, after three decades, our promise to the 25 percent, we were now heading out into open territory to provide the same service to the other 75 percent. Needless to say, this didn’t come without controversy. Some of our traditional viewers, as well as some critics, suggested that we were drifting away from our original charter and pandering to the mass audience and ratings. Well, it may have seemed that way to purists, but to me and my team at Discovery we were in fact continuing the quest that always had been at the heart of our network—bringing knowledge TV to everyone. Even if the subject was, most controversially, a little six-year-old Atlanta beauty pageant phenomenon named Honey Boo Boo. That ...

The difference was that this time we were talking to an enlightened leader who actually listened. The digital age wonders that we all now enjoy owe their origin to the liberating effects of the resulting Telecommunications Act of 1996.

I was fortunate that day to get a firsthand view into the way government should work to incentivize spending and free up competition. Smart government policy, I realized, could grow the economy and, at the same time, accomplish an important national objective: the improvement of education. Among other accomplishments, the new legislation broke down the regulatory barriers that had kept phone companies from providing cable service, and cable companies from providing phone service.

. . . this revolution [in telecommunications] has been held back by outdated laws, designed for a time when there was one phone company, three TV networks, no such thing as a personal computer. Today, with the stroke of a pen, our laws will catch up with our future. We will help to create an open marketplace where competition and innovation can move as quick as light.

President Clinton concluded by describing the important role of government not just in developing regulations that protect consumers from abuse by monopolies, but also in shifting the burden of infrastructure investments to the private sector:

It was perhaps this combination that led President Kennedy to recognize and advocate this “paradoxical truth”: shift funds out of government to grow the future revenues of government. The history of Discovery Communications proves President Kennedy’s “paradoxical truth” that investment funds left in the private sector ultimately lead to more tax collections by government. In 1985 and 1986, thirty individuals and seven companies used a portion of their after-tax earnings to make a risk investment in the start-up of the Discovery Channel. This $25 million private sector investment fully funded the creation of not only a new business enterprise that created more than 4,000 new jobs in the world, but also a company that, to date, has paid more than $900 million in taxes to the federal government. And Discovery’s annual tax payments to support U.S., state, and foreign governments are increasing. In 2011, Discovery paid $253 million in U.S. federal taxes, $38 million in state and local taxes, and $109 million in foreign taxes. Remarkably, this total of $400 million in taxes is only part of the tax benefits enjoyed by government through Discovery’s operations. Our 4,000 employees also pay tens of millions of dollars in personal income taxes, as do the many suppliers and vendors that share Discovery’s annual cost expenditures—which, in 2011, had climbed to more than $2.4 billion. Thus Discovery Communications is a vibrant contributor of billions of dollars to government and to the...

“Education is learning what you didn’t even know you didn’t know.”

“The greatest obstacle to discovery is not ignorance—it is the illusion of knowledge.”

Education fosters intellectual humility, and this humility contributes to an attitude of tolerance that is impervious to notions about superiority and inferiority in race, religion, and politics. It stands to reason, then, that global education will contribute to the ultimate goal of human civilization: a world at peace. Until that goal is reached, however, we will continue to witness the destructive power of ignorance.

And in recent years, just such a daydream has begun to fill my idle thoughts. It has two parts, but both revolve around a single theme—and that is to expand the original Discovery vision from impacting millions to billions. By that, I mean: 1. How do we—using both the massive archives we’ve already created plus the latest technology tools and platforms—address the enormous challenge of improving the education of all humans regardless of where they live on the planet? I will look at a potential solution to that challenge in this chapter. 2. How do we—using technology, original content, and new teaching techniques—expand that audience for curiosity-based television from that endemic 25 percent to include the rest of the population? I will use the concluding pages of this book to look at one possible solution, one that combines the digital world of television with the “analog” world of nature.

The vision with which I began this story, the one that defined my life and career, was of the 25 percent of adults who remain endlessly curious. But with children, that figure is 100 percent. Something is lost on the passage to adulthood, as the world of work and responsibility severs our connection with the natural world. That hasn’t always been true. And, in a few weeks after writing this book, I’ll be in Tanzania spending time with the Hadza people, the last true hunter-gatherer tribe in Africa. Now numbering only about 1,200 individuals, the Hadza owe their remarkable survival over eons of time to their intense primal curiosity about every aspect of their natural habitat. They chronicle their past in stories told in a language few understand and they share with one another in a way the world has forgotten. There in the hills to the west of Yaida Valley, sitting at a campfire and staring up at the stars; at home watching Riley discover her own version of the four o’clock flowers; and wherever else my curiosity leads me, I intend to find my way through to the three-quarters of mankind that haven’t been part of my daydreams until now. And I plan to spend the rest of my life in that search.