The graying of America’s baby boomers and that generation’s love for all things home and hearth has dramatically transformed the E.W. Scripps Co.
The Cincinnati-based media giant has found surging revenues and ever-rising profits in its Scripps Networks arm, which includes some of the nation’s most popular Web addresses and cable channels. The division is expected to become a stand-alone company in July as Scripps Networks Interactive.
“Baby boomers who are affluent, that’s who we target,” said Cindy McConkey, senior vice president of communications at Scripps Networks. “For them, HGTV is the No. 1 network.”
Thanks in large measure to millions of American baby boomers, Scripps cable channels HGTV, the Food Network, DIY and affiliated Web sites have made Scripps a Wall Street gem – generating decades of profit from advertising and affiliate fees.
The appeal for affluent and aging Americans – as well as their parents and children – is programming free of sex, murder, crime and calamity.
Advertisers get an audience slavishly devoted to home and food preparation – a core group unlikely to channel-surf their way to other cable channels.
And while other media companies are scratching through an ad slump and an economic downturn, this division found rising profits even during a 2008 first quarter that usually staggers through a post-Christmas advertising hangover.
No revenue plateau is in sight, as viewership continues to grow:
Food Network, 70 percent owned by Scripps, had a 13 percent increase in prime-time viewing in the first quarter of 2008 when compared with 2007 – an average of 874,000 total viewers, according to Nielsen Media Research.
In the first quarter of 2008, HGTV just missed being in the top 20 cable networks but averaged 1.1 million prime-time viewers – a 3 percent increase over the same period last year, Nielsen found.
Scripps stirred investors earlier this month with first-quarter 2008 revenue from the cable division at $311 million.
Thanks to popular shows such as “Deserving Design,” “Diners, Drive-Ins and Dives” and “Ace Of Cakes,” the company has entered 2008 with momentum that could last for years to come, experts said.
“When people get around retirement age, cooking good food becomes a popular hobby,” said Daniel J. Howard, professor and chairman of the marketing department at the Cox School of Business at Southern Methodist University in Dallas.
“And this cohort is very attached to their castle, too. As people near retirement age, they are more likely to become homebodies.”
All the comforts of home
While the family room TV grabs viewers for Scripps, the household computer snags Web surfers who wandered onto company Web sites such as HGTV.com and Foodnetwork.com.
It’s in the online food and home categories where Scripps Networks soars.
The foodnetwork.com continues to be the Internet’s top food and cooking site. It and sister site Recipezaar receive 25 percent of the total traffic in the food category on the Web, the company told Wall Street last month.
For advertisers, it’s a trend to relish: all those affluent homeowners and food fans who can be reached through an advertising buy at just one company.
Those ads reach consumers such as Betsy Zelek, a Kenwood marketing consultant, who regularly watches Food Network.
“On most weekends I leave it on, maybe three or four hours,” Zelek said. What is the appeal of these shows? Zelek said the best shows offer elegance, simplicity and style. “They inspire me,” she said.
Statistics from the Focalyst, a New York City-based research group, suggest that few generations are as connected to their homes as retirees or people about to retire. A study of 17,000 retirees found that it’s a sweet-spot demographic for advertisers:
“92 percent of boomers plan to buy a major household item, like furniture, home decor, appliances and outdoor and gardening items, in the next 12 months. The average cost is $2,200.
“Three of four boomers will spend $6,000 within the next year on a major home improvement project.
“Also, consumers ages 45 and older accounted for 55 percent of total consumer expenditures in 2006 – about $3 trillion.