Paula Zahn was in a strange place when her phone rang in 2008. After decades reporting for ABC, CBS, and CNN, the realities of life as a TV personality had seemingly caught up with the 56-year-old Emmy winner: Rather than breaking hard news, she was working on a PBS documentary and performing as a concert cellist. So of course she took the call from Discovery Communications execs who wanted to discuss a network they were relaunching. Doesn't mean she thought much of it. Says Zahn, "Here they wanted to develop a full investigative series--something I'd never done--on a network I'd never heard of."
Discovery, a $20 billion media company with more than 144 networks worldwide, was rebooting its culture-themed cable channel, which was then called Discovery Times and drawing a scant 80,000 daily viewers. It would be the network's third identity in 12 years (see sidebar). If the pedigree was suspect, the timing was outright bad. "The economy was in shambles, and no one was putting any money into production," Zahn says. "I thought, The odds of this happening are not good."
No amount of gumshoeing could have predicted that the new iteration, Investigation Discovery, would be an instant hit. For two years, it has billed itself--with gusto--as "America's fastest-growing network," and the numbers bear it out. When the channel debuted in 2008, ID ranked No. 55 in cable ratings for women ages 25 to 54; in total, it was in fewer than 60 million homes. Through February 2012, it has jumped to third in that demo and added more than 30 million new subscriptions. While Discovery Times drew 80,000 daily viewers, ID gets more than 470,000. Leading the charge has been its marquee newsmagazine, On the Case With Paula Zahn.
The architect of this salvage job is Henry Schleiff, the former CEO of Court TV who transformed that property, worth $300 million in 1998, into a powerhouse that sold to Time Warner for $1.5 billion in 2006. Among those who took note of his success was David Zaslav, the CEO of Discovery. Zaslav had already decided to move Discovery's woebegone network toward investigation: Based on the success of 1990s shows such as Discovery Channel's The New Detectives--the inspiration for the CSI franchise--and TLC's Medical Detectives, he knew there was a market for crime and mystery fare. He just needed someone who could turn a genre into a network. Schleiff fit the bill. He joined in mid-2009 and quickly made two decisions that steered the network on its current course.
Though ID launched in 2008 with reruns of The New Detectives and the like, the intent was to rapidly fill its programming blocks with original content. Realizing that ID could get heaps of it by updating episodes of established properties, Schleiff worked with former colleagues to license the top three newsmagazine shows--CBS's 48 Hours, NBC's Dateline, and ABC's 20/20--which debuted alongside On the Case in the fall of 2009. The trio of blue-chippers aired on ID with new intros and fresh takes on the subject matter. All were branded "on ID," as in Dateline on ID, with nary a mention of their provenances. The licensing moves helped build ID's identity and gave viewers familiar titles and faces to get them hooked.
Additionally, Schleiff eschewed the prevailing idea that the way to build a network was with appointment viewing. Instead, he focused on making ID an all-day destination. "If someone tunes to CBS every week to watch CSI, they're keeping a scheduled appointment. It occurs only once a week," he says. "If that same person tunes into ID at any time, she'll see an original show that likely appeals to her."
What enables ID to fill its schedule with unique content is the inexpensive nature of its programming. ID shows capitalize on their viewers' affinities for reality TV and crime dramas, and most contain a mix of low-cost reenactments; unpaid interviews with crime victims, their families, and incarcerated prisoners; and commentary from experts who aren't as pricey as, say, David Caruso. The shows range from investigative and newsy with On the Case and the hate-crime-focused Injustice Files to the melodramatic, campy, and even cheesy with Who the (Bleep) Did I Marry? and Deadly Women.
Across the board, viewers are eating it up. "The viewership jump is pretty huge," says Derek Baine, an entertainment analyst at SNL Kagan, who notes that demand has forced cable companies to move ID to their basic packages. "As its current deals expire [over the next two years], Discovery will be able to raise licensing fees with providers, based on ID alone." At present, ID costs cable providers $0.08 per subscriber each month. If the $0.18 fee of a comparably rated network such as TLC is any indication, that could lead to an extra $95 million annually for Discovery.
Advertising revenue has followed a similar trajectory, quadrupling from approximately $40 million in its first year to around $160 million in 2011--far below industry leaders TBS and USA in dollars, but above them in growth. "We've broken every trend in TV," says Sharon O'Sullivan, ID's senior VP of ad sales. "This year, for women in our key area, cable ratings are down 6% and network is down 3%. We're up 39%."
That success is allowing Zaslav and Schleiff to become more ambitious. ID debuted 15 franchises in 2011 and will raise the number to 25 this year--including On Death Row, which features Academy Award-nominated documentarian Werner Herzog interviewing condemned inmates before their executions. Also on the radar are ID-branded films and documentaries. "ID has emerged a major driver for Discovery domestically," says Zaslav. "And since we own all of our content, we can air it internationally. I see a lot of potential for growth abroad."
Great as that may be, Schleiff is still focused on the home front. In his first job interview with Zaslav, he said he could make ID a top-five cable channel. Nothing has happened since to make him think otherwise. "We've done very well," he says, "but there are still networks ahead of us I think we can surpass. I sincerely believe we will get to 100 million subscribers; we will be ahead of TNT, TBS, USA, and Lifetime within our target audience." The goal is ambitious, but it's not off target. "Based on their ratings growth over the past four years, they can be a major player," says Baine. Good for the network, bad for Zahn's cello career.