Scripps: Boosting Travel Channel a Priority
Network Looks to Boost Ratings before Negotiating Carriage Renewals
Jon Lafayette (Broadcasting & Cable) -- Multichannel News, 2/9/2012 8:36:00 PM
Scripps Networks Interactive is mapping out a big investment in Travel Channel, with hopes that its destination will be higher ad revenues and fat affiliate fees.
While reporting its fourth-quarter earnings on Thursday, Scripps said it planned to increase spending 13% to 15% and that Travel Channel would be the biggest recipient of those new funds. The company is also planning an increase in marketing to help viewers find the new shows.
"Travel Channel does remain our single biggest growth opportunity, and with the combination of successful returning series and new programming planned for 2012, we're very optimistic about developing Travel Channel into a leading multi-platform lifestyle brand like HGTV and Food Network," Scripps CEO Ken Lowe told analysts during the company's earnings conference call.
Scripps acquired a 65% stake in Travel Channel in 2009 in a deal that valued the network at $975 million.
After Scripps took over, ratings at first went up. But last year, viewership among adults 25 to 54 slid 5%. In the fourth quarter, viewership in the demo dropped 12%, and ratings fell another 15% during January 2012.
The ratings decline has meant lower ad sales. Scripps reported that during the fourth quarter, Travel's revenue was down 1.4% to $67.2 million.
This is a critical year for Travel Channel because almost half of its affiliate agreements with distributors are up for renewal by the end of 2012, with most of the rest ending in 2013. The network receives about 11 cents per subscriber now from cable operators, satellite providers and telcos. Without higher viewership, Scripps will have little leverage to ratchet fees higher.
"The payoff for improved ratings on Travel is significant," John Lansing, president of Scripps Networks, said during the conference call, explaining why the channel was a priority.
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