John Hendricks: still curious

John Hendricks tells Stewart Clarke about CuriosityStream and how it will harness the ‘third evolution of TV’, to do for streaming what Discovery did for pay TV.

Netflix’s disruptive effect on the global content industry has made streaming and SVOD big news in the pages of industry magazines such as TBI and also the mainstream press. That is a relatively new phenomenom. Discovery Communications founder John Hendricks has, meanwhile, had on-demand on his mind for over two decades.

“I started thinking about it in 1992 or 1993, I could see the benefit of digital and knew it would allow us to deliver more content, and then we started thinking about VOD,” he says.

Having launched Discovery in 1985 – the channels group that now comprises 48 channels across 220 territories and commands revenues of over US$6.3 billion – Hendricks helped shape the cable TV business in the US and internationally. Now launching a new streaming service, he identifies parallels between the burgeoning SVOD world and the early days of cable, and is placing a big bet on filling a documentary niche in the same way that Discovery did in pay TV.

“Streaming is the next evolution of TV and could last the next thirty years… I’m determined that in the streaming world CuriosityStream will capture that [audience]”

“We’re witnessing the third big evolution of TV,” Hendricks says. “First there was broadcasting where viewers got what they were given on live channels. Second was the one I participated in for most of its duration [multichannel TV], which started had a simple concept, different categories of content via cable and satellite systems.

“The key back then was sports and movies, and then the ‘best of’ TV and re-runs on USA Network. I saw that my favourite thing, factual, had not been claimed as a category.

“Now we have streaming, which is the next evolution and could last the next thirty years.”

Within the SVOD world no-one has yet taken ownership of the factual genre. This is why, having stepped down as Discovery chairman last May, he is rolling out CuriosityStream. Launching on March 18, it claims to be the ‘world’s first on-demand, ad-free content streaming service delivering premium factual content in the areas of science, technology, civilisation and the human spirit’.

Hendricks’ contention is that there is an unfulfilled demand for a factual SVOD service, despite the dominance of Netflix in streaming, and its major moves into original and acquired docs.

“First there was Netflix with movies, and then Hulu with series and re-runs and third, here I am. Factual is the third big category”

“First there was Netflix with movies, and then Hulu with series and re-runs and third, here I am,” he says. “Factual is the third big category and I’m determined that in the streaming world CuriosityStream will capture that and deliver it on-demand. It is very much in parallel with the second evolution of TV.

“If you focus on a particular category then you end up doing it better. When I launched Discovery, HBO had docs and [HBO factual president] Sheila Nevins did a great job for them, but typically different services can co-exist.”

Hendricks’ claim to have been thinking about on-demand for decades is borne out by the fact that back in 1992, and backed by John Malone (“a friend and investor”) he launched a time-shifted service, Your Choice. Fast-forward 22 years and his new service launches as an ad-free proposition.

The lack of commercials, which, in a world where the ‘factual’ category now encompasses fact-ent, big-character ob-docs and reality programming, will allow CuriosityStream the luxury of staying true to its classic factual proposition. As the factual cable channels move more into entertainment, it also heightens the need for a pure factual play.

“When I launched Discovery in 1985 it was clear multichannel TV would sweep the planet and I see the same thing with CuriosityStream and streaming”

“An important decision I have made is to make the content commercial and ad-free,” says Hendricks. “75% of the entire audience is interested in amusement and entertainment, and if a service is ad-supported, over time, ratings need to increase and the need for ad revenues drives you to amusement and entertainment content.

“The ad-play is a great model – it lessens the cost of TV and, in cable, makes it more affordable on a per-channel basis. The downside is it is hard to keep a pure factual channel going. In the world of streaming and SVOD there are no ads; it is not driven by ratings that will make us change the focus.”

CuriosityStream launches with 700-800 hours of content. A scan of the titles available reveals Age of Robots (pictured) from Australia’s Flame Distribution, Annihilation from France’s Zed, Cosmic Front from Japan’s NHK and Earth: Power of the Planet from BBC Worldwide.

Docs are being sourced from all over the world, underlining the international nature of the factual business. Having made an early land grab with Discovery’s channels around the world, international is also part of Hendricks’ CuriosityStream plans. “When I launched Discovery in 1985 it was clear multichannel TV would sweep the planet and I see the same thing with CuriosityStream and streaming,”

“My intention is to be worldwide as soon as possible”

Hendricks says. “That’s why we went into originals straight away, it gives us worldwide rights. And when we acquire we try to secure worldwide rights. It will be accessible anywhere in the world, but if you are in Paris, for example, you might find there is not a lot of French content yet, but my intention is to be worldwide as soon as possible.”

CuriosityStream has announced a pair of originals: history doc Deep Time History and computers and internet history series Digits. CuriosityStream will hold exclusive streaming rights ahead of TV, inverting the TV-to-streaming windowing system. The CuriosityStream founder says: “Originals will premiere on CuriosityStream for streaming and then maybe in a year or so we can open a secondary window for a selected cable run. It would flip the model and help with cost recovery.”

The streaming newbie will also look at bringing on copro partners for its originals, introducing another player to the doc production world. “When budgets can be US$700,000 to US$2 million dollars an hour, the likes of the Discovery-BBC copro partnership was perfect,” Hendricks says. “If we can divide a US$750,000 per hour series across Europe, Asia and North America – US$250,000 three ways – and each has the first window, that would work. We will coproduce as long as we have exclusive streaming rights.”

Originals also provide a point of difference he adds. “We will have a menu distinct from Netflix because we will have originals. People who love factual programming will have both [services].”

The ‘S’ part of the new SVOD service will be based on streaming quality: US$2.99 a month for standard def, US$3.99 for 720HD, US$5.99 for 1080HD and US$9.99 a month for 4K. There will be an iPad app to reach the to 44-to-55-year-olds who are typically consuming content on the Apple tablet.

Ultra HD is the new frontier in high definition and having been at the forefront of HD with Discovery provides CuriosityStream with a clear opportunity, according to Hendricks. “I learned a big lesson when we were first out with HD. People said we were crazy, but we and ESPN did it. People who are the first out to get 4k are a target for CuriosityStream. The challenge is streaming 4K: it may work by giving you the heads-up that we have something you are interested in, in 4K, and then we drip download it overnight.”

“CuriosityStream would have been hard if I was still [chairman of] Discovery, but I’m not encumbered by any legacy concerns”

What won’t happen with CuriosityStream, its founder says, is a partnership with Discovery. “I’m still a proud and bullish Discovery shareholder, but there is nothing in place and I don’t anticipate anything. It would be very difficult to launch with a new platform if you have a legacy business in another platform. CuriosityStream would have been hard if I was still [chairman of] Discovery, but I’m not encumbered by any legacy concerns and all of the existing relationships there.”

The parallels between the launch of Discovery and CuriosityStream are clearly plain to Hendricks. If he can harness the documentary category with anything like the success of the company he launched in 1985 then CuriosityStream will become the ‘documentary Netflix’. Will it happen? The industry is curious to find out.