By John Eckberg
The Cincinnati Enquirer
The E. W. Scripps Co. is poised to embrace the cyber-commerce future in 2003 by merging its growing lifestyle cable networks of Food Network and HGTV with its Shop at Home Network, shareholders learned at the company's annual meeting Tuesday.
An artist's rendering shows WCPO-TV's new building on Gilbert Avenue in Mount Adams next to Interstate 71.|
(Courtesy E. W. Scripps)
| ZOOM |
Kenneth W. Lowe, president and chief executive of the Cincinnati-based company, said at the annual meeting at the Queen City Club downtown that the shopping network, which it bought in October 2002, reached about 42 million households last year with net revenues averaging about $5 a household.
TV retailing cost Scripps about $16 million last year on revenues of $213 million.
But those losses are an investment, Lowe said, that will lead to more viewers spending more money in the months and years to come.
Other shopping networks get more than $45 a viewer a year.
Owning a shopping network brings new opportunities to Scripps, which also owns 21 newspapers, 10 television stations, four national and popular lifestyle television networks plus a licensing and syndication division.
Products sold on the shopping network might migrate onto programming on the Scripps Network division, for instance, he said.
"You might see some unique marketing arrangements with large advertisers now that we have a national platform dedicated to commerce and products," Lowe said.
Other priorities in the year ahead will be the continued expansion of the Scripps Network division, which generated profits of $125 million in 2002, an increase of 65 percent from 2001 results of $76 million.
Scripps Networks - HGTV, DIY, the Food Network and the upscale Fine Living - generated revenues of $415 million in 2002, a 23 percent increase from $337 million in 2001.
Converging shopping with entertainment is an untapped vein, and Scripps stands alone among national and international media companies doing it, said John Janedis, analyst at Banc of America Securities, based in New York City.
"I'm very positive," he said. "This is an opportunity that very few media companies have in front of them. No one has ever done this before. No one has had that synergy between properties.
"There is a lot of upside but it's longer term upside - say, three to five years."
In the short term and on the local front, Scripps is relocating its Cincinnati television station WCPO-TV to a site on Gilbert Avenue in Mount Adams next to Interstate 71.
It will open by June 2004 and cost an estimated $28 million, Lowe said.
Lowe also said the company would take a wait-and-see approach to any media ownership revisions under consideration by the Federal Communications Commission.
New rules are expected in early June, he said.
Fiorini auditors stumped, going for deal
Broadwing name returns to roots
Game Day makes gains handing off to UC team
PEALE: What's the Buzz?
Scripps plans to cultivate shoppers
Dial settles sex harassment case for $10M
Industry notes: Banking