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Scripps Sees Higher Upfront Cancellations in 2nd Quarter

Feb 5, 2009  •  Post A Comment

Scripps Networks Interactive said that cancellations of upfront advertising buys are running “in the low teens,” compared with rates in the previous quarter of 2% to 5%.
Scripps Networks President John Lansing, speaking on the company’s first-quarter earnings call Thursday, said many of the advertisers canceling their second-quarter buys are jumping back into the scatter market in hopes of buying ads at lower prices.
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But Mr. Lansing said Scripps plans to be disciplined in maintaining its price structure.
“We really like our chances of being able to succeed in the scatter marketplace,” he said.
In the first quarter, upfront cancellations were 6%, Mr. Lansing said.
In the scatter market, prices for ads on Food Network are up 11% from their upfront levels, while prices of ads on HGTV are flat compared to the upfront, Mr. Lansing said.
Compared with last year, when the scatter market for cable got a boost from the Writers Guild of America strike, Food Network’s scatter pricing is down 8% and HGTV’s is down 12%.
Also, volume is lower than a year ago.
Scripps said its biggest advertising categories were showing mixed results. At its food-oriented properties, spending by marketers in the food category is up, consumer products are flat to down 5%, retail is down 8% to 10% and automotive—driven by imports—is up a bit. The financial category is down 25%.
At HGTV, home improvement spending is flat, with Home Depot, Lowe’s and Sears maintaining their spending so far, Mr. Lansing said. Consumer products are down 5%, entertainment is flat and retail is down between 20% and 30%.
Mr. Lansing said that so far, it appears first-quarter ad revenues will be down slightly from a year ago; he remains hopeful that the company will be able to maintain that pace. But he added that scatter buys are coming in to the network less than two weeks before the commercials run, limiting his visibility on how the quarter will turn out.
Looking further ahead, Mr. Lansing said it was “a little early” to be looking at the upfront, “but we are still optimistic the upfront can be a major contributor and help our fourth quarter.”

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