Scripps Networks Interactive on Thursday reported that cancellations of its second-quarter upfront buys are running “in the low teens,” a significant increase versus Q1 pullbacks, which came in at around 6 percent.
Speaking on the media company’s first-quarter earnings call, SNI president John Lansing said that while options were accelerating in Q2, the Scripps nets have been seeing “a fair number of those advertisers coming back into the scatter marketplace looking to negotiate on price.”
Lansing added that scatter pricing across the five networks––HGTV, Food Network, DIY, Fine Living and GAC––is down 10 percent versus the year-ago period, although he added that pricing is being looked at in relation to last year’s inflated scatter market.
“We’re trying our best to maintain our pricing at or above our broadcast upfront pricing,” Lansing said, adding that Food Network scatter pricing is up 11 percent over its upfront levels. That said, pricing at the second flagship net, HGTV, is flat versus the 2008-’09 upfront. “We really like our chance to succeed in this scatter marketplace because of the quality of our audience and our engagement.”
Scatter-to-scatter, Food is down 8 percent on pricing, while HGTV is down 12 percent.
Among its top categories, Scripps is contending with a mixed bag. At Food Net, spending in the endemic food category is “up slightly,” while consumer products are “flat to down 5 percent.” Thanks to foreign auto spend, the car category is “up a bit,” while retail is “down 8 percent to 10 percent.” Financial services is taking the biggest hit among the Food flagship, falling 25 percent.
Meanwhile, HGTV is encouraged by home improvement, which is flat versus a year ago, as Home Depot, Lowe’s and Sears are maintaining their spending. At the shelter net, consumer products are down 5 percent, entertainment is flat and retail is experiencing the most severe downturn, as spending has fallen “between 20 percent and 30 percent.”
Lansing said that 20 percent of Scripps Nets’ ad dollars come from direct-response marketers.
SNI a fourth-quarter net loss of $153.5 million, or 94 cents per share, compared to a loss of $299 million, or $1.83 per share in the year-ago quarter. The loss included a $244 million non-cash charge against earnings to write-down its investment in Shopzilla. Excluding that charge, net income came in at 55 cents a share, versus 50 cents a share a year ago.
Revenues rose 3.5 percent to $412 million. The Lifestyle Media segment, which includes the five SNI cable nets, boosted its revenue 7 percent during the fourth quarter to $340.3 million, compared with $318 million in the year-ago period.
Lifestyle Media saw ad revenue grow 3.3 percent in the quarter, to $263.1 million. Affiliate fee revenue was $70.4 million, up 20.7 percent.
While any growth is welcome in this moribund economic climate, the 3.3 percent lift is further proof that even the strongest businesses are slowing down. In the third quarter of 2008, SNI reported ad sales growth of 5.4 percent to $236 million, following an 11 percent boost in ad sales dollars in Q1 ‘08 ($271 million).