In recent weeks there has been a great deal of discussion about broadcast business models. The following story from Television Week should be a wake-up call for TV broadcasters in the U.S.
You don't have to ride NTSC to the Digital Cliff... Regards Craig http://www.tvweek.com/news.cms?newsId=11463 January 30, 2007 Scripps Cable Networks, Political Ads Boost Profit By Jon LafayetteThe E.W. Scripps Co. said fourth quarter income from continuing operations jumped 30 percent because of strong results at its cable television networks and a groundswell of political advertising at its TV stations.
The company said that net income for the quarter was $134 million, compared with a net loss of $603,000 a year ago that was caused by a writedown of goodwill at the Shop At Home network, which was sold.
Profit from Scripps Networks-which includes HGTV, Food Network, DIY, Fine Living and GAC-was up 19 percent to $144 million, Revenue rose 13 percent to $280 million and ad revenue was up 11 percent to $224 million.
Ken Lowe, president and CEO of E.W. Scripps, during the company's earnings call with analysts, said revenues from the networks' Web site was about $21 million, up 90 percent from a year ago. Full year Web revenue increased to $61 million, up from $36 million.
John Lansing, president of Scripps Networks, said that pricing in the scatter advertising market, where spots are purchased closer to air time, was up 20 percent from the broadcast season upfront. This year's scatter sales have risen in the low single digits from last year's scatter market.
Ad prices for DIY, which began subscribing to Nielsen Media Research ratings in the fourth quarter, fell slightly, Mr. Lansing said, noting the network had set its ad rates high.
"Better than going in to the market with weak pricing," he said, noting that it is difficult to get big increases in cost-per-thousand (CPM) rates from advertisers once prices are established.
Since getting ratings, DIY has been "meeting all of its advertisers guarantees, and then some."
Mr. Lansing said he expected Scripps' broadband networks to be profitable by the end of the year. CPMs for Internet ads with video were about twice those for static Internet ads, he said.
The company's television station group's profits rose 64 percent to $49.1 million. Political advertising during the fourth quarter was $28.9 million, compared to $2.5 million in 2005. Mr. Lowe said that ad spending in the off-year election was $44 million, up from the presidential year of 2004.
Mr. Lowe reiterated that the company had no plans to sell its newspaper division.
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