Tough economic times can make consumers hunker down and even cut back on the essentials of life.
Like buying fine jewelry.
A September survey of affluent households released last week, by American Express Publishing and the Harrison Group, found only 4% planned to increase spending this year on jewelry, while 27% planned to cut back (by an average of 59%), Nationaljewelernetwork.com reported.
This is bad news for Jewelry Television, the home-shopping channel in 71 million U.S. homes. Sales last year (of which a cut goes to TV distributors) were about $500 million, and spokeswoman Kelly Fletcher said the network hopes to hit that number again. “We don’t expect we’re going to grow this year,” she said.
In hopes of spurring growth, the privately held channel is launching a high-definition version on Oct. 15, emanating from a new 5,000-square-foot studio, and cleaning up its on-air graphics.
It’s also adding new financing options, including the “Bill Me Later” deferred-payment program, a preferred-customer credit card and a buyer-protection plan.
The channel’s also adding home-jewelry-making kits and DVDs to the mix and is getting into collectible holiday ornaments with gemstones. “In this economy and this marketplace, we’ve had to look for things that do apply, because that’s what we do and know, but are a little bit different,” Fletcher said of the 15-year-old programmer, which this past spring laid off about 200 of 2,100 employees at its Tennessee operations to cut costs.
Andy Caldwell, vice president of affiliate marketing, said no distribution deals have been signed yet for the HD outlet. For one thing, Jewelry is trying to figure out the right model for the HD version, which should create “new revenue opportunities” for affiliates.
“We have a couple commitments we don’t really want to talk about yet,” he said. “But probably by first quarter, we should have quite a few different commitments” for HD launches. Jewelry, like other home shopping outlets, provides a revenue split but also guarantees affiliates a given per-subscriber fee, he said.
Fletcher and Caldwell said the glitzy new look for its jewels and gems should help in a tough environment. “Because sales across the board for electronic retailers are down, we’re looking for new revenue streams, new ways to reach customers, to reach a younger demographic. We believe HD is going to do that,” Fletcher said.
If nothing else, Caldwell said, an HD version of Jewelry Television could bring more women viewers to HD tiers currently packed with male-dominated sports channels. “We think that’s a good way to get launches with cable operators.”