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00:00OF POWER. YESTERDAY, I SAT DOWN WITH THE CEO OF DISCOVERY AND HOW HIS COMPANY FITS INTO THE MEDIA WORLD THAT CHANGES EVERY DAY. > > WE ARE TRYING TO PLAY IN A SPACE THAT OTHERS ARE NOT PLAYING. SO WHEN WE PULLED SCRIPPS INTO DISCOVERY, WE BECAME THE SECOND-BIGGEST TV COMPANY IN AMERICA IN TERMS OF OUR REACH ACROSS TELEVISION AND AUDIENCE. WE HAVE GREAT BRANDS THE PEOPLE OF. WE HAD IT AT DISCOVERY. SCRIPPS HAD IT. WHEN YOU PUT IT TOGETHER, WE HAVE THREE OF THE TOP CHANNELS IN AMERICA FOR WOMEN, FOOD, HG, ID. WE ARE THE -- WE HAVE THE TOP CHANNEL FOR AFRICAN-AMERICAN WOMEN, THE NUMBER ONE CHANNEL FOR MEN. PEOPLE THAT WATCH HDTV OR FOOD OR ID, THEY WATCH IT IN A WAY THAT PEOPLE WHO LIKE FOX NEWS MIGHT WATCH IT. SO IT BECOMES A HOME FOR THEM. IN THE QUALITY, NONFICTION AREA IN THE U.S., WE HAVE GREAT BRANDS. WE ARE FIGHTING TO MAKE THEM BETTER. WE ARE COMPETING, IF YOU WANT TO CALL IT THAT, BECAUSE WE ARE IN A TRADITIONAL SENSE, WITH ENTERTAINMENT COMPANIES. WE CREATE AN ECOSYSTEM ON THE TV SET. BUT WE ARE VERY DIFFERENT WHEN IT COMES TO DIRECT THE CONSUMER. WHETHER IT BE HBO OR SHOWTIME ON NETFLIX OR WHAT BOB IGER IS LOOKING TO DO WITH THIS GREAT DEAL HE DID WITH FOX, AGGREGATING A GREAT AMOUNT OF I.T., ALL OF THAT SITE IS SCRIPTED MOVIES AND SERVICE. THERE IS LOTS OF CONSUMERS, DOMESTICALLY AND AROUND THE WORLD, THAT HAVE A CHOICE OF FOUR OR FIVE OR SIX PLACES TO GO FOR BETWEEN $10 AND $15 TO GET SCRIPTED MOVIES AND SERVICE. AND A LOT OF MOVIES ARE APPEARING ON THOSE PLATFORMS. IF YOU WANT SOMETHING ELSE, THAT ' S US. WE ARE A GLOBAL IP COMPANY. SIZE, DISCOVERY, FOOD, HOME, CRIME WITH THIS DEAL THAT WE DID WITH GOLF, OUTSIDE OF THE U.S., WE OWN THE PGA TOUR WITH JAY MONAHAN. WE ARE IN BUSINESS TOGETHER EVERYWHERE IN THE WORLD OUTSIDE THE U.S. TODAY, WE ANNOUNCED WE DID A DEAL WITH THE EUROPEAN TOUR, WHICH INCLUDES THE RYDER CUP. TWO WEEKS AGO, WE ANNOUNCED TIGER WOODS. DAVID: I SAW YOU ON SOCIAL MEDIA. > > I GOT THE MOST LIKES. THE STRATEGY IS ALL THE SAME. HOW DO WE DO THE BUSINESS WE ARE DOING, WHICH IS STILL A GROWTH BUSINESS FOR US, WHERE WE HAVE ALL THESE CHANNELS AND CABLE AROUND THE WORLD? HOW DO WE TAKE ALL THE IP WE OWN AND GET ABOVE THE GLOBE? DAVID: YOU ' VE GOT A LOT OF RAGE, A LOT OF CONTENT. I THINK THERE IS A WIDE PERCEPTION YOU ARE ON A MELTING ICEBERG. YOU CAME FROM BASIC CABLE. BASIC CABLE IS NO LONGER AN OVERALL INCREASING BUSINESS. THERE ' S CORD CUTTING. HOW DO YOU MAKE THE JUMP FROM THAT MELTING ICEBERG AND WHERE DO YOU JUMP TO? > > NOT THE WAY I WOULD LIKE TO REFER TO IT, BUT BROADCAST HAS BEEN A MELTING ICEBERG SINCE 1992 AND BROADCAST IS STILL DOING PRETTY WELL. DIRECTIONALLY, I THINK YOU ' RE CORRECT. THERE IS SOME SECULAR DECLINE, PARTICULARLY IN THE U.S. WHERE CABLE IS DECLINING 3%. OUTSIDE THE U.S., CABLE IS STILL GROWING 2%. PART OF THAT HAS TO DO WITH THE FACT THAT CABLE IS SO EXPENSIVE HERE, BECAUSE ALL OF THE SPORTS IS IN THE ENTRY-LEVEL. BUT DIRECTIONALLY, YOU ARE CORRECT. PEOPLE ARE CONSUMING MORE CONTENT BUT WATCHING THIS ON TV. THE WAY WE ARE DOING IT IS PROBABLY MORE AGGRESSIVELY THAN ANYONE ELSE AND WE HAVE A BIGGER BET THAN ANYONE ELSE. ALL THE CONTENT THAT WE OWN, WHETHER IT IS FOOD, HOME, TRAVEL, NATURAL HISTORY WITH DISCOVERY, OPRAH CONTENT, CAR CONTENT -- WE OWN ALL THAT CONTENT, THAT IP, EVERYWHERE IN THE WORLD. IF WE SET DOWN WITH APPLE TOMORROW OR GOOGLE AND SAID LET ' S DO A NATURAL HISTORY OFFERING LOCALLY, WEEK -- GLOBALLY, WE COULD START NEXT TUESDAY. THE DEAL THAT WE DID WITH THE PGA, WE ON THE PGA OF AMERICA, THE TOP TOUR, TOGETHER WITH THE ASIAN PGA AND LATIN AMERICA PGA AND NOW THE EUROPEAN TOUR. WE OWN THAT ABOVE THE GLOBE. SO WE DO SEE OURSELVES AS A GLOBAL IP COMPANY. THERE IS A BIG DIFFERENCE BETWEEN WE ICR COMPANY IN TERMS OF SUSTAINABLE -- I SEE OUR COMPANY IN TERMS OF SUSTAINABLE FUTURE. THE WHOLE INDUSTRY IS DOWN 30% TO 40% BECAUSE OF TERMINAL VALUE. WE VIEW OURSELVES AS A GLOBAL IP COMPANY. THAT IS WHAT WE ARE DOING WITH SPORTS IN EUROPE, GLOBALLY WITH THE PGA. YOU WILL SEE US START TO TAKE OUR CONTENT OUT, EITHER WITH REGIONAL PLAYERS ARE GLOBAL PLAYERS, BECAUSE WE CAN. DAVID: YOU SAID IT. DIRECT TO CONSUMER IS WHAT EVERYONE IS TRACKED TO GET TO. CAN YOU DO THAT, LICENSING TO OTHER PEOPLE WHO ARE DOING DISTRIBUTION, OR DO YOU NEED TO DO YOUR OWN DISSOLUTION, THE WAY BOB WENT OUT AND BOUGHT ONE? > > THERE ARE DIFFERENT WAYS TO DO IT. WE ARE DOING IT WITH CARS. WE HAVE MOTOR TREND ON-DEMAND PRODUCT. WE HAVE A EUROSPORT PLAYER. WE BUILT OF THOSE PLATFORMS OURSELVES AND THEY ARE SCALING UP. IN THE END, YOU NEED BOTH. IF WE DID NATURAL HISTORY GLOBALLY, WE CAN OFFER NATURAL HISTORY OFFERING OUR FOOD OFFERING GLOBALLY AND DO PRETTY WELL. BUT IF WE GOT VERIZON AND AT & T, BOTH OF WHOM HAVE OVER 100 MILLION PHONES, TO DRIVE THAT TO THEIR CUSTOMERS OR, IF WE GOT A FAANG COMPANY TO DRIVE IT FOR US OR CABLE COMPANIES AROUND THE WORLD -THE ADVANTAGE OF HAVING SO MANY DRIVE IT FOR YOU IS- APPLE HAS 600 MILLION CREDIT CARDS ALREADY. LIBERTY GLOVER -- LIBERTY GLOBAL IN EUROPE IS BILLING. THE REAL SCALABILITY WE THINK IS GREAT I.T., BUT THEN PIGGYBACK ON REGIONAL PLAYERS ARE GLOBAL PLAYERS. THEN YOU CAN REALLY ACCELERATE YOUR OVERALL GROWTH. DAVID: AT THE END, IT IS CREATED CAN ' T -- CREATIVE CONTENT. YOU DESCRIBE THIS NEW WORLD. YOU REPORTED THAT YOU ARE HAVING ISSUES WITH DISCOVERY CHANNEL, THE MAIN MOTHERSHIP. HOW DO YOU ADJUST ACCRETIVE ASPECT IN THIS NEW WORLD WHERE IT CAN ' T JUST BE ONE PROGRAM YOUR PROGRAMMING. > > FIGURING OUT HOW TO CREATE GREAT CONTENT WITH STORIES PEOPLE CARE ABOUT AND CHARACTERS THEY LOVE IS WHAT WE DO AT DISCOVERY. WHEN WE CLOSED ON SCRIPTS, FOOD WAS DOWN 15%. TODAY, DISCOVERY IS DOWN. LAST QUARTER, DISCOVERY WAS UP. THAT ' S NOT MY CONCERN. WE HAVE ONE OF THE BEST CREATIVE TEAMS IN THE BUSINESS. WE ORGANIZE THEM BY NICHE, SO WE HAVE 18 THAT REALLY UNDERSTANDS FOOD AND HOW TO PRAY GREAT CONTENT AROUND FOOD, AND NATURAL HISTORY. WE HAVE 18 CHANNELS. SO WE WILL HAVE A CHILD THAT IS UP OR DOWN. WE ARE IP LONG. WE OWN ALL THE CONTENT. THE REASON WE DID SCRIPPS IS WE VIEW THAT AS A MASSIVE IP ACQUISITION. WE OWN ALL THE TRAVEL CONTENT, THE FOOD CONTENT, THE HOME CONTENT. MOST COMPANIES ON THE STUFF FOR THE U.S. AND IN THEY SELL IT OFF. THE FACT THAT WE OWN IT ALL, IF WE ARE GOING TO BE SUCCESSFUL, WE HAVE TO GET THE PHONE COMPANIES TO PUT OUR CONTENT ON THEIR MOBILE SPACE -- MOBILE SCREENS. AND WE WILL HAVE TO GET PEOPLE TO START PAYING US FOR THINGS I GOLF TV OR OR CYCLING. IF I COME BACK HERE NEXT YEAR WE HAVE 5 MILLION SUBSCRIBERS, THAT COULD BE WORTH A MASSIVE AMOUNT OF MONEY BECAUSE THERE IS NO TERMINAL VALUE ISSUE THERE. YOU HAVE CREDIT CARDS. YOU HAVE PEOPLE WHO ARE NOT SUPER FANS OF THE -- NOT JUST SUPER FANS OF THE CABLE CHANNEL. THEY ARE IN BUSINESS WITH YOU FOR THE LONG-TERM. DAVID: IT SOUNDS LIKE JOHN MALONE TREATING THE CABLE SYSTEM. > > HE AFFECTED THAT STRATEGY WITH STARS. JOHN BOUGHT ALL THE RIGHTS TO THE PREMIUM MOVIES. AT THE TIME, HE SAID TO ME, SOME DAY, THOSE RIGHTS WILL BE WORTH MORE THAN STARZ. FOR US, WE LOOK IN EACH OF OUR BASKETS. WE SPEND MORE MONEY TO OWN ALL OF THE CONTENT. BUT THE WAY THE FAANG COMPANIES ARE NEEDING MORE CONTENT, WITH A MOBILE PLAYERS ARE NEEDING MORE CONTENT, IN THE LONG-TERM, WE THINK WE CAN BE THE BIG WINNERS BECAUSE WE HAVE A GLOBAL IP.

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