Scripps Networks Interactive broke the billion-dollar barrier during its 2012 upfront, president and CEO Ken Lowe said on the company's earnings call this morning.
That's "billion." With a "b."
For reference, the entire cable upfront market last year came to about $9.45 billion, with this year's haul anticipated at about $10 billion, which gives SNI about one-tenth of the marketplace.
"We're really proud of these guys," said John F. Lansing, president of Scripps Networks and evp of Scripps Networks Interactive. Incomes attributed to SNI were up 19 percent this year—ad revenues hit $417 million for the quarter alone, up 12 percent. Major growth categories for Scripps included endemics like food and CPG, as well as retail, auto and financial. Scatter pricing is down at the moment because of the Olympics, reflecting the fortunes of every non-NBCU network, and Lansing said the company had seen "healthy high single-digit gains in CPMs and pricing," with volume gains in the low teens.
Lansing suggested that the reason SNI had seen such significant gains had much to do with its policy on over-the-top content, which is conservative. "We were purposely not early movers in the over-the-top deals because of the value of a ratings point against the value of a onetime revenue increase for us," he said. "It just seemed like it would be better in a wait-and-see mode." Lansing was cautious: "I don't want to draw a straight line between over-the-top content and ratings declines at our competitors."
The company isn't averse to any SVOD offerings—but don't expect it to jump at anything that's not authenticated. "We will start with TV Everywhere," Lansing said. "We are strong believers in TV Everywhere and in our existing distributor relationships." Indeed, the company's 10-K seems to indicate that its affiliate fees are reasonable. Scripps made a net $166.1 million from affiliate fees this quarter—less than half its net advertising revenue.
The trick, according to Lansing, is to make sure everything is measured effectively before signing on. "Nielsen will be prepared to measure in the first quarter of 2013," said Lansing, "and by that time we should have some other significant authenticated deals done."