Kenneth Lowe, president-CEO of the new Scripps Networks Interactive group, spent 35 minutes of the company's hour-long presentation at the UBS Global Media and Communications Conference talking up the strength of the Scripps cable brands, which include Food Network and HGTV, while Rich Boehne, exec VP-chief operating officer, devoted about 10 minutes to the local businesses, home to the troubled newspaper sector.
'The most challenging time'
"These are clearly interesting times to be in the local media business, especially in the newspaper publishing industry. It's been the most challenging time in my 25 years in this business," Mr. Boehne said. "But we have in the durability of the local media marketplace and the uniquely local news and entertainment content they can provide."
On the interactive front, Mr. Lowe chatted up the recent ratings strength of Food Network, which scored two hits this fall with the third season of "America's Next Food Network Star" (which averaged 2 million viewers in prime time) and "The Next Iron Chef of America" (1.7 million viewers), but will lose one of its flagship series, "Emeril Live," at the end of the year. "We'll be seeing plenty of Emeril [Lagasse] in specials, new episodes of 'Essence of Emeril' and of course in reruns of 'Emeril Live,'" Mr. Lowe said reassuringly.
Digitally, Foodnetwork.com is the No. 1 most-trafficked food website, garnering 8.5 million visits in October 2007 vs. the 7.9 people who visited Kraft's website that same month. The network's recent acquisition of Recipezaar.com, the No. 10 most-trafficked food site in October, has helped to expand its online reach.
HGTV.com also fares well in the online home category, where it ranked fourth behind sites from retailers like Lowe's in October. Coming later this month is real-estate search engine Frontdoor.com, the first site to be spun out of the Scripps Networks Interactive group not directly related to a TV brand or an acquisition.
Speaking of acquired sites, Scripps' biggest online moneymaker, Shopzilla.com, faced heavy competition from the big-box retailers, who outbid the company in key shopping search terms in fourth-quarter of 2006. Mr. Lowe said the site has seen net revenue grow to double digits since September, and should continue to be profitable in the near future. USwitch.com, the group's other main e-commerce site, has faced similar market challenges due to the changes in natural gas prices. Mr. Lowe said the site should return to profitability in the new year.
On the local side, there's still hope for local news media. Mr. Boehne sees significant revenue growth for Scripps' newspapers and TV stations in next year's presidential campaigns. The 2006 congressional campaigns alone earned the company a record $44 million in ad spending, preceded by $42 million from the 2004 presidential elections. Mr. Boehne expects the 2008 total to exceed the company's record.