Food Network and HGTV Bank on Trust

Road to the Upfront: Scripps Networks

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The Player: Scripps Networks: Food Network, HGTV, DIY, Fine Living and Great American Country
The Date: April 21, 2009
The Venue: Cipriani 42nd, New York
Key Execs: Ken Lowe, president-CEO; Steve Gigliotti, exec VP-ad sales and emerging media; Jon Steinlauf, senior VP-ad sales; Donna Stephens, senior VP-ad sales, HGTV, DIY and GAC; Karen Grinthal, senior VP-ad sales, Food Network and Fine Living; Deanna Brown, president-Scripps Networks Interactive; Jeff Meyer, senior VP-interactive sales
The Food: A Food Network-worthy assortment of fresh, fruit-themed snacks, from yogurt with granola and berries to banana-and-Nutella wafers to melon-and-citrus skewers.
The Swag: A copy of the June/July issue of Food Network magazine, a new Hearst joint venture that has grown its rate base to 900,000 in just three issues; a branded jump drive; and a chocolate-coconut-cashew bar, made fresh in the Food Network's Chelsea Market kitchens

HGTV's Dream Home Giveaway received more than 40 million entries.
HGTV's Dream Home Giveaway received more than 40 million entries. Credit: HGTV
Last Year's Take: Food Network saw measured ad spending increase nearly 10% to $525.1 million in 2008; HGTV remained flat with $557.5 million; DIY boosted ad revenue 59% to $34.9 million; and Great American Country was up 60% to $12.75 million, according to TNS Media Intelligence.

The Ratings Game: 2008 was another record ratings year for Food Network, which saw its median age in prime time dip to an all-time low of 43, from 48 in 2003, and is already up 19% among adults 18 to 49 in the first quarter of 2009. HGTV achieved similar highs in 2008 and was up 1% in prime time among adults 18 to 49 in the first quarter. Younger networks Fine Living, GAC and DIY are newly Nielsen-rated and still finding their prime-time footing.

Buyer's Verdict: Robert Balancia, managing partner-interactive, at G2 Direct and Digital, said Food Network's advantage, like that of its Scripps siblings, has been its ability to serve as both a niche and broad-reach vehicle for advertisers looking to associate their brands with food as a lifestyle category on-air and online. "They've been very accommodating in creating customized opportunities and sponsorships that really go above and beyond a bunch of other companies in their category," he said. "Having that integration allows us to go outside a simple function and create a true experience for someone that does utilize both the broadcast and the web side. You can check out the recipe or see what else that person has on the website, which is not the usual case with many other networks."

The Pitch: As broadcast networks struggle to maintain their hold on mass prime-time audiences, it's a good time to be for Scripps Interactive's Food Network and HGTV to be chasing niche audiences, as both cablers enter the 2009 upfront with all-time revenue and ratings highs. As a result of their continued growth in the food and home sectors, Scripps is positioning its five-network portfolio under the tagline "Brands (for life)," based on the newfound value of trust.

"Consumers have lost a lot more than equity in their home and money in their stock portfolio. They've lost of a critical amount of trust," Mr. Gigliotti said. "We have trusted brands with quality, relevance, stability and trust."

It's relevance that's anchoring HGTV's current health, with an aggressive lineup of new programming that reflects the often-volatile realities of the current housing market. "The Unsellables, "Real Estate Intervention," "Property Virgins" and "My First Place" are among the new titles designed to offer unfiltered advice to viewers on how to find and maintain a valuable house.

But a collapsed market for new housing would also explain why HGTV's sweepstakes and giveaways have never been more popular. HGTV's Dream Home Giveaway received more than 40 million entries, giving an awareness boost to sponsors such asLumber Liquidators along the way. Up next is the "HGTV $250,000 Challenge," where homeowners compete for a cash prize to remodel their homes, and "Urban Oasis," with a grand prize of a fully furnished deluxe apartment in a major metropolitan area.

Co-promotions are also driving Food Network's success beyond TV, as a tie-in with Red Lobster for "America's Next Food Network Star" recently proved. The seafood restaurant sponsored a challenge for the cooking competition in which the winning recipe would be included on all Red Lobster menus nationwide. Jon Steinlauf, Scripps Interactive's senior VP-ad sales, said the promotion generated 50,000 orders for the show's macadamia-encrusted tilapia in one week.

Having a younger prime-time audience has also helped Food Network attract more movie, wireless and fast-food marketers, helping it expand its business to more mass-market advertisers vs. the endemic food and family-style restaurant brands that have always bought time on the network. "It's shifting sands, but the category is still very important to us," said Karen Grinthal, Food's senior VP-ad sales.

Scripps continues to invest in more original programming for networks DIY and GAC, which each grew ad revenue more than 50% in 2008, according to TNS Media Intelligence. Fine Living is also poised to become a bigger player in 2009 with recent acquisitions of "The Martha Stewart Show," "Emeril Live" and "Queer Eye for the Straight Guy," as well as the new, buzzy Martha Stewart clip show "Whatever Martha."

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