Scripps’ Script: Synergy Sells

Last year, when E.W. Scripps Co.’s Food Network was about to launch Iron Chef America, the company put together all of its marketing pieces. Instead of giving the show a promo nudge, Scripps decided to give it a great big push.

Ten of Scripps’ broadcast stations aired spots promoting the show and ran sneak peeks and contests during morning shows. Scripps’ cable networks ran up to 18 spots a day for the show and teased it in their online newsletters, reaching some 3 million subscribers apiece. Scripps’ newspapers featured the show on the covers of their TV-book inserts.

The premiere was a smash, with more than 2.3 million viewers. It quickly became Food’s highest-rated regularly scheduled program. It also earned a 1.0 rating with males 18-49, a demo Food Network wants. That success helped lower Food’s median male viewing age to 43.5 during second quarter 2004, down from 45.4 last year.

Scripps Networks President John Lansing, a veteran broadcaster and news director relatively new to the cable game, says successfully managing Scripps Networks—the name for the company’s cable properties—comes down to two things: “Long-term planning and being nimble.”

To succeed, Scripps relies on using all of its weapons and is one place where synergy isn’t just a consultant’s buzzword. Says Lansing, “A media company with a variety of assets really needs to know how those assets can work together to create incremental value overall.” And Scripps tends to get the full value of its promotional dollar to push its six cable networks: Home and Garden Television; Food Network; DIY (Do-It-Yourself); Fine Living; Shop At Home, which it bought in 2003; and Great American Country, which it acquired last November. (Scripps also runs five Shop At Home broadcast outlets.)

The parent company is riding high on those cable properties. Last week, when E.W. Scripps Co. announced strong second-quarter results, the cable division was the star of the show. Ad revenues of $202 million were up 28% from the same time last year; revenue from affiliates gained 18% to $39.6 million.

Credit synergy and savvy marketing. Scripps began producing local half-hour versions of DIY for its TV stations and now syndicates the network nationwide. KNXV Phoenix and WPTV West Palm Beach, Fla., are also taste-testing Food Network fare for syndication. The Scripps stations are taking old library shows from their corporate cousin and running them as a weekday strip, Calling All Cooks. If this clicks, “it could reduce our need for syndicated programming,” says Bill Peterson, VP of Scripps’ television stations. Food and HGTV own the rights to most of their shows, meaning they can cut and re-cut library content at little cost.

The audience for Food Network, which has 87.5 million subscribers, is 21% higher in cities where Scripps owns a TV station. HGTV does 23% better in Scripps markets than it does nationwide, where it averages a 0.81 Nielsen household rating. In Tampa-St. Petersburg, Fla., for example, where Scripps owns WFTS, HGTV delivers a 1.46.

Scripps is careful with its cross-promotion, particularly when station news operations are involved. Most Scripps cable content that airs on the stations’ newscasts flows through WCPO Cincinnati News Director Bob Morford. He produces those packages and feeds them to the other nine stations. Morford says a news element is required: “It has to be produced to newsroom standards. I don’t want anything to come off as a commercial for HGTV.”

Scripps’ script wasn’t scribbled on a napkin. Last August, it launched an internal strategic-planning committee to prioritize assets across all its properties—newspapers, broadcast stations, Internet and news services—and figure out how to best leverage them through cross-promotion. Marketing group Promax lauded Scripps with a Brand Builder award last month.

“It’s not just that you have assets; it’s what’s the smartest way to use them,” says the strategic group’s head, VP, Promotions Strategy, Jeffrey Kissinger, a veteran of cross-promoting from his days of marketing CNN through Ted Turner’s other networks.

Most of Scripps’ networks harmonize with each other. HGTV, Food Network, DIY and Fine Living all center on lifestyle programming; they air about 570 hours of design/decorating, gardening, food and travel, and other content in the genre each week. Its newest networks, Shop At Home, with 55 million subscribers, and Great American Country (GAC), fit into the plan, too. GAC seems like an odd duck, but even there, country-music stars hawk goods. But it is HGTV and the Food Network that can really capitalize on Shop At Home.

Case in point: Reporting second-quarter earnings, E. W. Scripps Co. CEO Ken Lowe raved about celebrity chef and Food Network host Emeril Lagasse. When Lagasse appeared on Shop At Home on July 16 to hawk kitchen goods, the five-hour live special helped sell almost 6,000 units, with 73% of weekend sales in the category coming from new customers. A full 45% of Shop At Home sales that day came from Lagasse’s segment.

The wildly popular chef will contribute to two more Shop At Home specials, airing in September and November. A twice-weekly show featuring goods he selected started last Wednesday.

Now Scripps is implementing the strategy to promote such shows as HGTV’s series Redesign on other networks and to streamline the consumer-products sales on its Web sites, eventually migrating items from all the networks onto the single Shop At Home site.

Cross-promotion will come into play when Scripps launches two hi-def networks, slated for 2006, and introduces highly targeted broadband channels, the first two of which will focus on kitchen and DIY-related content.

There’s a mess of tinkering yet to do. GAC, with 37 million subscribers, is focusing on rebranding, freshening its look without alienating the network’s core fan base. It is also moving from Denver to country-music mecca Nashville, Tenn.

DIY, the Scripps network with the largest Web following (some 2 million unique visitors each month, a big number for a network in just 33 million homes), is pushing its how-to TV into new categories, such as crafts, hobbies and pets. (It plans a show called Barkitecture, about dog-house design.)

And Shop At Home, after focusing on tweaking production values, will continue migrating from traditional shopping-channel categories like jewelry and coins to the lifestyle categories featured on its other networks.

Scripps’ cable success may be an example of necessity as the mother of invention. Like other old-line publishing companies, last decade, Scripps recognized that newspapers’ days of growth were long gone and that TV stations weren’t growing much either. New cable retransmission rules gave broadcasters the power to demand compensation from cable operators who refused to pay cash but were willing to offer carriage of any new cable networks a broadcaster might start. In 1994, Scripps started HGTV and later invested with other broadcasters (including Tribune and Providence Journal Co.) in Food Network.

The cable networks have been so successful they are now driving the company. Morgan Stanley analyst Doug Arthur estimates that cable networks will generate 53% of Scripps’ $2.4 billion in revenues this year and 54% of its $692 million in operating cash flow.

Despite a dip in HGTV’s ratings, cable revenues should jump 25% and cash flow around 23% this year. Lowe says a recent $500 million deal to buy Internet price-search engine Shopzilla similarly fits in with the other Scripps properties.

On a recent conference call with investors, Lowe said, “If you look at the history with this company, especially in the past 20 years, it has been an evolving strategic decision to move on to other platforms.”