With the coldest cable upfront market in recent memory playing out, Discovery finds itself having to explain serious ratings shortfalls to media buyers. TLC and Discovery's ratings fell 35% and 14%, respectively, over the past season.
"It's never a good year to have a ratings fall," said Rino Scanzoni, chief investment officer at Media-edge:cia. "But when it happens in a year where there's more pressure on revenue because the overall marketplace hasn't grown a lot organically, it's almost like the perfect storm."
TLC and Discovery have in the past commanded premium pricing with cost per thousand price increases 15% to 20% higher than most general-entertainment cable networks. Last year the cable giant nabbed 9% to 11% cost-per-thousand increases.
"There's nothing wrong with Discovery," said Billy Campbell, president, Discovery U.S. "We feel fantastic about our positioning and we're going to write a great upfront."
Mr. Campbell has publicly accepted blame for TLC's over-reliance on the home-makeover genre and one-time boon "Trading Spaces," relatively inexpensive to make and ripe for product integration.
But now he vows, "I will fix TLC."
"It was like the heroin problem," said a cable programming veteran, of "Trading Spaces" and its spinoffs. "They got addicted to it."
Marketers such as Procter & Gamble Co., Lowe's and Home Depot bought in, substantially increasing ad dollars with the network by 45% to 110% in 2003 and 2004, according to TNS Media Intelligence. When the bottom fell out this season, make-good issues cost the network millions of dollars of inventory.
STILL `IN DEMAND'
To be sure, "Trading Spaces" is still "an in-demand show," said one major buyer. "Advertisers still want to be in it." But the show's white-hot days are over and TLC is now charged with rebuilding a brand defined by home makeovers. It's new focus will be on "life, life experiences, life unscripted," Mr. Campbell said, pointing to "The Adam Carolla Project," which features the comedian-also a registered contractor-as he revamps a dilapidated house. "It's so character-driven, so different from that [home-makeover] genre, you really wouldn't identify with that," he said.
Several other shows, such as "Small Mediums at Large," about little clairvoyants changing lives, have not yet been given the greenlight.