Online Extra: TV's Oddest Couple

Surprise! Rupert Murdoch and National Geographic are getting along famously as they challenge Discovery Network

The National Geographic Society and brash media mogul Rupert Murdoch would hardly seem a natural match. But with its National Geographic cable channel, the tweedy foundation is helping Murdoch -- whose programming taste runs to such schlock as World's Scariest Police Chases and the sex-filled Temptation Island -- take on Discovery Network, one of cable's strongest players

Murdoch has a ways to go before he can claim victory. NatGeo, which is 67%-owned by his News Corp. (NWS ) and 33% by the society, has grown rapidly since it launched in late 2001, but the channel is still seen in only 48 million satellite or cable-TV homes. Discovery Channel is in almost twice as many -- 86.7 million. Indeed, NatGeo is less widespread than many of Discovery's spin-off channels, which include Animal Planet and The Learning Channel, both of which are also in more than 80 million homes.

Still, NatGeo shows the muscle that Murdoch can flex when he wants to put something on the air -- even something with the brand name National Geographic. Murdoch's folks sold NatGeo as a competitor to Discovery, say cable operators, as a check against Discovery charging outrageous increases in the future. But Murdoch's News Corp also took advantage of Federal Communications Commission rules that allow major media companies to accept the airing of new channels in place of cash when they negotiate carriage for their TV stations or other hot properties.


  And Murdoch has made heady use of that provision: Cash-strapped Adelphia put on NatGeo as part of its payment to carry Fox TV stations. And in early December, Fox got Cox Communications (COX ) -- with 6.3 million subscribers -- to show NatGeo on some of its systems as part of Cox's deal to extend coverage of Murdoch's Fox Sports channels. (The FCC, in approving Murdoch's DirecTV acquisition, says the media mogul must now put disputes over such quid pro quo power plays before an arbitrator.)

Of course, getting on the air is only half the battle. Restricted by National Geographic's aversion to shock and schlock, NatGeo is tame compared to traditional Murdoch fare on Fox and FX. For instance, a staple of NatGeo's prime-time schedule is National Geographic on Assignment, a round-the-world news program that features segments about toy trains and private companies' efforts to do business in space.

Fox has a chance at a demographic it rarely serves

And NatGeo's idea of what passes for a reality show show is the highly entertaining -- but decidedly tame -- Worlds Apart. One episode  featured a fresh-faced family from Alabama that lived for a week in a primitive West African village. Hardly Fox's The Simple Life, featuring the antics of air-headed sexpot Paris Hilton.

So what has gotten into Fox? For Murdoch's gang, NatGeo represents a market it has rarely served -- upscale, wealthy folks. NatGeo says it attracts an audience with an average age of 45 and income north of $70,000. Plus, Fox definitely sees an opportunity to take on Discovery Channel. The 19-year-old cable stalwart has spawned 13 other channels and has distanced itself from its documentary roots with shows like Monster Garage and American Chopper, which feature men building overwrought cars and motorcycles. "There's a market for well-made documentaries, and Discovery isn't filling it right now," says Tony Vinciquerra, president of Fox Networks Group, which oversees the Fox's stable of cable channels.


  A better question might be what made National Geographic sidle up to Murdoch? The society's idea of a suitable partner runs more to Robert Peary, the North Pole explorer whose trip it financed in 1909. Murdoch's history of putting scantily clad women in his tabloids and airing shows with profanity-spewing cartoon characters undoubtedly rubs some National Geographic fans the wrong way. The link-up is even more surprising given that for years, National Geographic had resisted putting a channel on the air, worried that doing so would cheapen its well-regarded, if somewhat yellowed, name.

"We were concerned about any partner in the media business," says National Geographic President John Fahey. Indeed, the society has insisted on control over content and veto power over anything that it believes would diminish the brand. But in the end, the need to expand won out. "We want to reach as many people as possible," says Fahey. "We were intrigued by the aggressiveness of Fox, and we have a real appreciation of their ability to get an audience to tune in." 

Is the combo of a killer brand name and a top-notch programming machine enough? Despite a 23% rise in viewership this season, NatGeo still attracts viewers in only 53,000 households a day, according to the latest numbers by Nielsen Media Research -- one-tenth the number that tunes in daily to Discovery Channel. And its parent, Discovery Network, which is 50%-owned by John Malone's Liberty Media (L ), is no lightweight. This year, Discovery will likely generate nearly $2 billion in revenues and operating cash flow approaching $400 million, according to forecasts that Liberty Media made public in November.


  Discovery's 14 U.S. channels include 2 of the top 10 cable channels: Discovery and The Learning Channel. The latter's Trading Spaces is a huge hit with the 25- to 54-year-old demographic that both NatGeo and Discovery are targeting. And Discovery is ramping up its defenses against NatGeo and other comers: Last year, it said it would spend $3 billion to create new programming for its channels -- a staggering sum in the cable world, which is replete with reruns and other low-cost fare.

Moreover, Discovery doesn't seem to be overly concerned about the NatGeo challenge. "I'm more worried about [Fox's reality show] Joe Millionaire," says William M. Campbell III, president of Discovery Communications.

While the folks at Discovery may not be quaking in their hiking boots, no one should count out the potential force of the National Geographic brand and Fox's aggression. "The gene pool takes the best from both," says NatGeo Channel President Laureen Ong of the partnership. Anyone who thinks Murdoch doesn't stand a chance to unseat a leader with NatGeo should think about CNN. Last year, the venerable cable news network watched helplessly as the seven-year old Fox News catapulted past it in the ratings. Go back even further, to the '80s, when people laughed at Murdoch's vision of Fox as a fourth network.  

Now, if Murdoch's troops could only create a documentary version of Temptation Island...

By Ronald Grover in Los Angeles and Catherine Yang in Washington, D.C.

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