Scripps Says Boosting Travel Channel a Priority

Network looks to boost ratings before negotiating carriage renewals

By Jon Lafayette -- Broadcasting & Cable, 2/9/2012 6:32:36 PM

Scripps Networks Interactive is mapping out a big investment in Travel Channel, with hopes that its destination will be higher ad revenues and fat affiliate fees.

While reporting its fourth-quarter earnings on Thursday, Scripps said it planned to increase spending 13% to 15% and that Travel Channel would be the biggest recipient of those new funds. The company is also planning an increase in marketing to help viewers find the new shows.

"Travel Channel does remain our single biggest growth opportunity, and with the combination of successful returning series and new programming planned for 2012, we're very optimistic about developing Travel Channel into a leading multi-platform lifestyle brand like HGTV and Food Network," Scripps CEO Ken Lowe told analysts during the company's earnings conference call.

Scripps acquired a 65% stake in Travel Channel in 2009 in a deal that valued the network at $975 million.

After Scripps took over, ratings at first went up.

But last year, viewership among adults 25 to 54 slid 5%. In the fourth quarter, viewership in the demo dropped 12%, and ratings fell another 15% during January 2012.

The ratings decline has meant lower ad sales. Scripps reported that during the fourth quarter, Travel's revenue was down 1.4% to $67.2 million.

This is a critical year for Travel Channel because almost half of its affiliate agreements with distributors are up for renewal by the end of 2012, with most of the rest ending in 2013. The network receives about 11 cents per subscriber now from cable operators, satellite providers and telcos. Without higher viewership, Scripps will have little leverage to ratchet fees higher.

"The payoff for improved ratings on Travel is significant," John Lansing, president of Scripps Networks, said during the conference call, explaining why the channel was a priority.

Lowe said that when Scripps took over Travel, it relied heavily on just one or two shows to attract viewers.

One show, Man v. Food, starring Adam Richman, represented 42% of all of the network's primetime impressions, Lowe said. Scripps tried to refresh the series, but, it wasn't salvageable.  "Unfortunately, Man v. Food as a format just was not sustainable beyond the 3-year arc," Lowe said. "But we still are working with Adam Richman to develop new formats that you'll see coming out this year."

Two other Travel Channel stars continue to be successful, Anthony Bourdain and Andrew Zimmern, plus the networks Ghost Adventures franchise. But other new shows failed.

"We took some shots at some other series that did not do so well, unfortunately, and that's just the way it works when you're trying to build up," Lowe said. "The first year, the first 1 1/2 years, first 2 years, you're going to try some things in order to center in and find the voice of the network, if you will, and we're beginning to find that voice now based on the successes that we've had coming out of 2011, but we learned from the ones that did not work as well."

One show that worked was Bourdain's new series, The Layover, which launched last year. Lowe called it "a breakout success" and said it's been renewed for 2012.

Lowe said Travel also will be leveraging successful formats from Scripps' other networks' franchise shows. That means Travel Channel will air shows like Vacation Hunters, Vacation Crashers and Hotel Impossible. "We've also put our unique spin on popular programming formats with a new series called Baggage Battle that follows 3 very savvy auction specialists who travel the world snatching up unclaimed and lost personal property in an attempt to turn huge profits. We think the series promises to be great fun," he said.

 "Mostly, what we're doing today is building out some new formats...that help us create the brand, if you will, around Travel," Lowe said.

The goal is to strengthen the channel's incumbent series and launch two, three or four new solid shows. That would mean "we can be sitting here at the third, fourth quarter and looking ahead and have as many as 6 to 8 series driving the brand, versus 2 to 3 that are driving it today," he said.