Scripps Sets April Kickoff to Upfront

Travel plans, Food spinoff and network hosts to headline main event and road show
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Scripps Networks Interactive is preparing to roll out its fresh-baked
programming at an upfront event penciled for April 20 in New
York, before heading out on a road trip to see buyers and clients
in Chicago, Detroit,
Los Angeles, Atlanta,
Dallas and Boston.

The lifestyle player will hit the upfronts with a roster of star power
including Food Network star Giada De Laurentiis, HGTV's Candice Olson and
Travel Channel's Anthony Bourdain. Last year, Scripps gave many upfront
participants their first taste of country crossover star Taylor Swift, who was
featured on the company's Great American Country service.

Scripps will have lots of news to share, with two channels to unveil. The
company is launching Food Network spinoff The Cooking Channel on May 31, and is
expected to further define the differences between the two services. Scripps
will also be showing off its new addition Travel Channel, which has its own
element of food-related programming. The company says it will officially take
over Travel's ad sales from Discovery Communications, which is handling
operations for the second quarter of 2010. Greg Regis is the new senior VP of
ad sales for the channel.

Despite the recession, Scripps channels have been faring well.
Fourth-quarter ad revenues at the cable TV unit rose 7% to $281 million. By
contrast, the two biggest cable content players, Time Warner and Viacom, each
reported a 4% dip in ad sales for the fourth quarter. Total TV ad dollars for
Scripps cable channels amounted to $1 billion in 2009; while that figure was
flat, it's better than the cable TV average, estimated to be a decline of 1%-2%
for the full year.

Jon Steinlauf, senior VP of ad sales for Scripps Networks, says Scripps'
auto business is already up 40% year-over-year, with Hyundai, Ford and BMW
on-air. The sector is bouncing back as Toyota's
rivals see an opportunity to take share by getting their messages on-air,
Steinlauf says: "Automotive and retail are gaining momentum."

A new ad mix

In the first half of 2009, Scripps bore the brunt of the recession as people
stopped spending on housing products while automotive, financial-services and
home-goods retailers cut back on ad spending. In the second half of the year,
the lifestyle player saw a change in its ad category mix. Consumer packaged
goods (CPGs) is now Scripps' No. 1 category of advertiser. "We have a new
relationship with CPGs," Steinlauf says. "They've been able to get on [air] in
a big way, and we're likely to see that continue."

With ad dollars up, Scripps suggests it is taking money away from broadcast
and cable outlets, such as Lifetime, that cast wide nets, as advertisers seek
more targeted networks. "We're seeing procurement officers questioning the CPMs
of broadcast when NBC is doing a 1.5 rating and USA might be doing a 1.2 or a 1.3
rating," Steinlauf says.

While some of NBC's programs such as The Jay Leno Show have
recorded ratings of that level, the network's average season-to-date rating in
18-49-year-olds is 2.6 through Feb. 6, according to NBC.

Scatter rates on the Scripps flagship channels are running at about 20%
higher than upfront CPM rates. Cable networks were forced to roll back pricing
during the 2008-09 upfront from 3%-7%. Steinlauf says his networks fell
somewhere in the middle of that range.

While Scripps' battle with Cablevision over carriage renewal fees saw Food
Network and HGTV yanked from 3 million cable homes, the spat only worked to
reinforce just how passionate the company's audience really is. Steinlauf jokes
that he heard from many media buyers who were complaining on behalf of their
families first, and clients second. The absence of those all-important New York viewers failed
to dent the ratings. According to Nielsen numbers for January, Food Network
ratings rose 28% to an average of 1.3 million viewers.

Travel and Track

Scripps Networks ad sales chief Jon Steinlauf says
accountability is the main concern of his advertiser clients. To that end,
Scripps would like to see efforts towards addressable advertising, including
the initiative from cable consortium Canoe Ventures, move forward. "A lot
of people would like to see Project Canoe be a success, and they'd like to see
addressability," says Steinlauf.

Still, when it comes to putting long-form programming online, the company has
been cautious about what to make available. Scripps channels are available on
Comcast's Fancast Xfinity service, but it has no agreement for anything beyond
a trial. The company also provides a number of short clips to Hulu.com.

But Scripps wants to see measurement in place first, says Steinlauf, so that
its viewers can be counted wherever they are watching. Nielsen's plans to
incorporate PC users into its TV panel will be complete in August. TV networks
hope the enhancement measurement will garner them additional C3 ratings credits
for online views, but it could be some months before any new data becomes
usable

Speaking to analysts earlier this month, Scripps Networks CEO Ken Lowe touched
on why measurement across platforms was crucial to his company. "Our
brands are actually, I think, in for great runs," Lowe said. "And
that's why we were thrilled to pick up one more category, the travel category
in addition to the home category and the food category. Our brands really
transcend television. But we've never been about just cable networks. We've
been about categories."

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