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QVC, Discovery Air Segment

QVC Inc. and Discovery Communications Inc. unveiled their first joint electronic retailing program with a two-hour shopping segment on Nov. 2.

The effort marked the first time that QVC paired with a cable network to sell products. It also demonstrated again how advertising-supported cable networks, such as Discovery Channel, are developing ways to leverage their brands into retail activities with the expectation that transactional revenues will grow as television becomes more interactive.

The segment was broadcast live from the recently opened Discovery Channel Store: Destination Washington, DC. The flagship store combines retail space with museum exhibits, drawing on Discovery's staple of documentary and educational programming.

Both companies said there were several advantages to jointly producing a shopping segment. QVC said the program was a way to entertain its audience of shoppers and test the appeal of Discovery-brand goods, while Discovery said it was an opportunity to promote the store among a wider audience.

“When I saw their flagship store in Washington,” said Robb Cadigan, executive vice president of programming and broadcasting at QVC, “it just became obvious that it was something we could do for our viewers. We wanted to take that store to our customers.”

Just as film studios Warner Brothers and Disney sell goods on QVC and expand their retail chains, Discovery Channel has ambitious plans to populate the country with its own chain of museum-themed stores. It bought the Nature Company Stores two years ago and is gradually converting its 85 locations into Discovery Channel Stores, which now total 40. Discovery's second Destination flagship store will open in San Francisco next year.

“It was intriguing to think that there was an organization like QVC that could reach people out of the range of one of our 125 stores,” said Greg Moyer, president and chief editorial and creative director of Discovery. “The thought of taking some of our storytelling and combining it with QVC's expertise in electronic retailing also was really intriguing to us.”

The best-selling product from the two-hour segment was a set of books, with total sales of 1,600 units. QVC also sold 1,250 units of Discovery Channel amber jewelry, 1,200 units of kinetic gadgets and 400 videos about septuagenarian astronaut John Glenn's recent return to space.

While the sales were not record-breaking for QVC, the channel was “very pleased” with the results of the first program.

“Really, the name of the game for us right now simply is to form the alliance and get it going,” Cadigan said. “We're very optimistic about the first show, but this is about a long-term relationship with more than one show. Besides, that's the fun thing about live television — it's all a pilot.”

The segment, hosted by QVC's Steve Bryant, toured the 30,000 square-foot half-store, half-museum and also featured goods ranging from a “frog song clock” that announces each hour with a unique frog sound to a documentary video about the ill-fated voyage of the Titanic.

The channels planned to schedule their next joint segment early next year, preferably when a science-related story is grabbing media attention. With the heightened interest in the Titanic following the release of the blockbuster film, Discovery staged a highly rated live show from miniature submersibles exploring its sunken hull. The U.S. space program is also getting a lift from Glenn's return to space and HBO's award-winning series about the Apollo moon landings.

“We haven't scheduled the next program yet, but we're definitely talking about it,” Cadigan said. “It may involve going live from one of Discovery's other stores or being involved in some sort of historic event that we both may be interested in. It's interesting how much is going on right now, first with Discovery's fantastic live broadcast from the Titanic and now with John Glenn.”

[headline] Not Direct Competitors

While the media environment has grown more competitive with a greater number of specialized channels dividing the viewing audience into smaller slivers, QVC and Discovery do not see each other as direct competitors.

“QVC is not in the advertising sales market, so in that very fundamental sense, they're not competing for the same dollars we are to sponsor their air,” Moyer said. “I think it's a very complementary relationship in the sense that QVC has a loyal audience, as does Discovery. I'm sure some Discovery viewers will go over to QVC because they appreciate our brand and would want to acquire product with our name, but I think we will be introducing ourselves to a large segment of television viewers who may not be regular Discovery viewers. In that sense, I think it will be a wonderful brand extension for us.”

He said the channel has no plans to air its own shopping segments, although it does air DRTV spot offers and maintains an online store with transactional capability for viewers who also shop online.

Meanwhile, QVC is seeing increased interest from other cable networks in producing cross-branded shopping segments, Cadigan said, even though only a handful of networks have their own stores.

“If a cable service doesn't have a retail operation, that doesn't preclude them from being involved with us, but it has to be a real natural fit,” Cadigan said. “It's sort of the hot topic right now. Everyone wants to get into the e-commerce and electronic retailing, but when you peel back the onion and realize how hard it is to actually do and that you need a lot of products and a lot of expertise, more and more people are coming to us now.”

Bucknell Alumni Connections

The idea for the Discovery segment was hatched last summer, when Moyer and Cadigan contacted each other through the alumni association of their alma mater, Bucknell University.

“We didn't attend college at the same time, but I had read about Greg through our alumni paper,” Cadigan said. He arranged to meet Moyer in June at the Promotion Marketing Executive Conference, where Moyer was scheduled to speak.

“We met in June and realized how much we had to talk about,” Moyer said. “It took a couple months after that to get our schedules in synch and then acquire product sufficient to support the televised offers.”

While the QVC segment was Discovery's first shopping channel segment, the company is no stranger to DRTV offers. It began selling its own brand of book and video properties six years ago, and recently enjoyed strong video sales of its Titanic exploration.

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