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Discovery explores Internet subscription service

By Liana B. Baker

(Reuters) - Discovery Communications is at work on an Internet streaming service that could charge cable subscribers a small fee to gain access to hours of documentaries and reality shows, executive chairman and founder John Hendricks said on Tuesday.

Hendricks said in an interview with Reuters that there is money to be made from TV shows on Discovery's networks that are between three and 18 months old. Shows in this time-frame are not easily accessed on cable on-demand services or on Netflix, which offers Discovery content older than 18 months, he added.

Discovery Communications owns networks such as TLC, the Discovery Channel and Animal Planet, which are home to some of biggest hits on cable TV. Discovery, like other media companies, is trying to find ways to cash in on digital content as viewers shift their TV viewing online.

"There will be a little older content, from three months ago let's say, that is available directly through Discovery if you're a cable subscriber," Hendricks said.

Discovery would charge "a very small subscription fee" which the most enthusiastic fans of a network such as the Science channel would be willing to pay for.

Hendricks had briefly outlined what the Internet service could look like and what it could cost in his memoir published this week called "A Curious Discovery: An Entrepreneur's Story".

He wrote in the book: "Imagine a premium Discovery on Demand streaming video service, with easy to navigate menus, delivered through cable and available only to Discovery's basic cable subscribers ... Wouldn't Discovery fans eagerly spend $6 to $8 for that service?"

Hendricks said Discovery is in the early stages developing the infrastructure for this service, which could be ready in the next two to five years. He added it would not be a standalone service but would resemble the model of HBO GO, which provides existing HBO subscribers with an easy to use streaming library.

"Our version of over the top would be working with our current distributors. If you were a subscriber to Cox or Comcast and you get the Science channel, you'd be eligible as a Science channel subscriber to be able to get more of our content per month," said Hendricks, who was Discovery's CEO until 2004 and is still involved with the executive team on strategy.

Discovery signed a two-year deal with Netflix in 2011 that gave the streaming service access to prior seasons of TV shows on Discovery's cable networks, such as "Man vs. Wild" and "River Monsters". It has indicated it intends to extend the Netflix deal, and also has a streaming deal with Amazon.

Hendricks, who ran a higher education consulting firm before he founded Discovery in 1985, is on a book tour promoting his memoir. It recounts the growth of Discovery from a tiny cable channel with $5 million in funding that played BBC documentaries to one of the leading cable programmers, owning 162 cable networks in more than 200 countries.

(Reporting By Liana B. Baker; Editing by Bernard Orr)

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