12 March 2015

Forbes.com

There are certainly a lot of ominous signs hanging around the traditional multichannel video (aka “television”) business. For example, DISH Network recently launched its new Sling TV service, offering consumers the ability to get online and on mobile a cheaper, “lite” version of the traditional package of cable networks, something that programming networks and distributors seemingly have tried to avoid providing for years.


And look at the news from just this week. HBO announced that its HBO Now service will be available exclusively to start on Apple  TV, without any cable subscription. To add insult to injury for “old fashioned” cable and satellite (which helped build HBO), Time Warner CEO Jeff Bewkes said Apple would “elevate” the HBO brand. TiVO released a study reporting that 38.1 million cable subscribers are unhappy with their service and that 1.5 million plan to “cut the cord.”  Verizon dropped the Weather Channel from FiOS. And the Cable Advertising Bureau (the biggest pro-cable rooters there are) isapparently blaming over-the-top (OTT) services like  for the very significant declines in television ratings.


Wow, the only sign missing seems to be the one that hangs on the gates of hell in Dante’s Inferno: “Abandon all hope ye who enter here!”


And yet….it’s not like there no silver linings among the clouds. An interesting story to me is the resilience of what was once one of the “new kids” on the cable block that is now one of its most venerable – Scripps Networks Interactive. Two of the linchpins of Scripps Networks today are Food Network, launched in 1993 (by The Providence Journal), and HGTV, launched by Scripps in 1994. Unlike broad-based entertainment networks from Turner Broadcasting (TBS, TNT), USA and A&E among others, the Scripps formula was always based on programming to a smaller but enthusiastic audience interested in its specific content.

In our what have you done for me lately financial world, Scripps’s stock market performance has frankly been on a downward slide over the last year. I do think the bigger picture there is far more interesting, and this was  reinforced for me in a recent conversation with Kathleen Finch, president of the company’s Home Category. Perhaps even more importantly, the lessons from the success of networks like HGTV are worth learning for a broad range of media content providers and brands.


At least for Scripps, there is still some growth in the old TV “war horse” (my term, not Finch’s). The HGTV brand itself remains a powerful one, recently listed as #1 on the social media “Love List” beating out Starbucks (fueled in part by an enormously successful Twitter promotion during the New Year’s Day Rose Parade). In February, HGTV recorded the highest ratings in its history. And in an era when “viewability” of ads in digital media is a significant issue, HGTV enjoys unusually high live levels of viewing of its commercials. Finch credits the close link between the content of the programming and the advertising (as an example, commercials for brands of passionate interest to someone watching a home improvement show). While “branded content” is all the rage today, in many ways Scripps has been playing that game from its inception.


Finch also points out that personalities are “so so so” important to Scripps and its networks – it isn’t simply generic non-fiction content at work here. The network has done extraordinarily well with its relationship with Ellen Degeneres and Ellen’s Design Challenge, and you can’t get a much higher compliment in the pop culture world than being satirized on Saturday Night Live, as the Property Brothers recently were on the 40th anniversary show. Scripps is proud of hiring an array of talented non-fiction producers (Finch herself is a former longtime “newsie” from CBS News) to help tell its “stories.” And unlike the Kardashians, Scripps’s personalities actually know something (sorry….that was an easy shot)!


Scripps has enthusiastically embraced digital media as well. As Finch points out, Scripps sells its “unusual value proposition” to online users – the combination of “entertainment, utility and expertise” that it sees as the key attributes to digital success.  Scripps says you can’t just “flip a switch” and “do digital” – it should be “additive” to what you are doing on television. And, given the continuing growth in at least HGTV’s ratings, the digital and “traditional” world appear to be working as complementary and not as cannibalistic.


Scripps’s future success isn’t guaranteed any more than its past has been, and it has long been rumored to be a ripe target for acquisition by one or other media giants out there. But its appetizing recipe (I know, I know) is one that more than a few others in the video business would be wise to follow.

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