Ad revenues, affiliate fees boost travel and food net
So far media companies have been posting mostly healthy results for the third quarter, but Scripps Networks Interactive may just be the envy of them all.
Helped by HGTV, Food Network and the Travel Channel, Scripps reported Thursday that revenues grew by 40% in the third quarter to $509 million. Excluding Travel, which the company acquired last December, revenues still grew 22% to $445 million.
Net profits soared 56% to $101 million.
“The third quarter was outstanding, just outstanding by just about every measure,” CEO Ken Lowe told analysts during a conference call.
Advertising revenue grew by 34% to $319 million, led by food, retail and big gains from auto on the quarter. Affiliate fee revenue skyrocketed by 72% to $140 million, based on the strength of new carriage deals negotiated last year, executives said.
Even comparison shopping website Shopzilla, which had been a drag on the company, helped Scripps’ interactive unit grow its revenues by 7.2% in the quarter, to $42 million. “We’ve turned the corner at Shopzilla, where we’ve been working diligently to improve our position in the market with both consumers and advertisers to set the stage for renewed growth,” Lowe said. “We view Shopzilla’s positive results for the quarter as the inflection point in our efforts to restage this business and enhance its competitive position as one of the most influential players in online retail.”
And the Travel Channel deal clearly looks like a winner for Scripps.
“At the Travel Channel, we’ve significantly expanded our growing list of national advertisers while simultaneously increasing the size of our audience,” Lowe said. “We’re successfully leveraging the popularity of Travel’s stellar talent, including Adam Richman, Anthony Bourdain and Andrew Zimmern, and are deep into developing new programming concepts which you’ll be seeing in the months ahead.”
Executives said they have seen no cannibalization between its Food Network and the new Cooking Channel (formerly the Fine Living Network), suggesting that people have an appetite for watching even more food-related programming.
“The newly rebranded Cooking Channel is delivering positive results with audiences steadily increasing each month since the network’s debut. Compared with Fine Living’s footprint last September, total-day audiences have increased 43% and primetime has improved 15%,” Lowe said.
Cooking Channel recently launched two new shows, one of which, “Week in a Day With Rachael Ray,” boasts the network’s highest-rated series premiere yet.
Other highlights from the quarter:
— Programming expenses at its Lifestyle business, including Food, HGTV, and Travel, increased 24% to $99 million. Excluding Travel, expenses rose 6%.
— Lifestyle segment profit was up 55% to $232 million compared with $150 million in the year-ago period.
— Revenue at HGTV was $174 million, up 14%. HGTV now reaches 100 million U.S. households, up more than 800,000 from the end of third quarter in 2009.
— Revenue at Food Network was $160 million, up 35%. Food Network reaches 100 million U.S. households, up from 99 million at the end of the third quarter 2009.
— Revenue at Travel Channel increased 14% to $62.3 million, on a pro-forma basis. Travel Channel reaches 96 million U.S. households, up from 95 million at the end of the third quarter 2009.
— Revenue at DIY Network was up 29% to $22.8 million. DIY can be seen in 54 million U.S. households, up 1.9 million households from a year ago.
— Revenue at Cooking Channel was $12.2 million, up 9.3%. The company completed its rebranding of Fine Living Network to the Cooking Channel on May 31. Cooking Channel reaches 58 million U.S. households vs. 56 million that Fine Living reached during the same timeframe last year.
— Revenue at Great American Country (GAC) increased 18% to $7.6 million. GAC can be seen in 60 million U.S. households compared with 57 million homes at the end of the third quarter 2009.