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Discovery searches for software partner

Discovery Channel Multimedia is looking to form strategic partnerships with other software companies to assist with its kids and reference lines....
April 1, 1997

Discovery Channel Multimedia is looking to form strategic partnerships with other software companies to assist with its kids and reference lines.

While the nature of the relationship would depend on the partner or partners, options that Discovery is considering include teaming up with another company or allowing a partner to use the Discovery brand, says Kathy Frazier, Discovery Channel Multimedia’s media relations manager.

The move is an effort to grow the business and to strengthen its impact at retail, says Tom Hanson, vice president of North American sales and distribution for Discovery Enterprises Worldwide, which oversees Discovery Channel Multimedia under its banner.

Sales of its 25 games, kids and reference titles have been at ‘the low end of where we had hoped,’ admits Hanson, although he will not disclose actual numbers. ‘For virtually all publishers, the holiday quarter did not come in as strong as everyone would have liked.’

With kids products, Discovery’s ‘high brand-name recognition typically has not translated into the children’s market,’ adds Hanson. But he believes that upcoming kid-targeted initiatives from the various Discovery Communications, Inc. units should help to raise awareness in this arena. As for its reference titles, ‘the reference category is a very tough category at retail.’ (Discovery plans to develop its games line on its own.)

A partner would support Discovery by filling in areas that the offshoot of the cable television company is lacking, such as its own distribution facility, a substantial internal structure for finance and accounting to deal with the retail environment, and an in-house development group.

Discovery wants to bolster its position in the U.S. retail market in particular, says Frazier. ‘In the international arena, we’re having great success,’ because distributors handle their own territories.

The search for a partner is in the early stages, but the company hopes to make an announcement within a few months.

Retail sales in the U.S. account for more than 40 percent of the company’s distribution, with international sales next in line. Other forms of distribution include direct-marketing efforts such as mailouts, on-air advertising on its cable channels and on-line ordering via its Web site, and bundling products with computers.

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