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Scripps Says Boosting Travel Channel a Priority

Scripps Networks Interactive is mapping out a big
investment in Travel Channel, with hopes that its destination will be higher ad
revenues and fat affiliate fees.

While reporting its fourth-quarter earnings on Thursday,Scripps said it planned to increase spending 13% to 15% and that Travel Channel
would be the biggest recipient of those new funds. The company is also planning
an increase in marketing to help viewers find the new shows.

"Travel Channel does remain our single biggest growth
opportunity, and with the combination of successful returning series and new
programming planned for 2012, we're very optimistic about developing Travel
Channel into a leading multi-platform lifestyle brand like HGTV and Food
Network," Scripps CEO Ken Lowe told analysts during the company's earnings
conference call.

Scripps acquired a 65% stake in Travel Channel in 2009 in
a deal that valued the network at $975 million.

After Scripps took over, ratings at first went up.

But last year, viewership among adults 25 to 54 slid 5%.
In the fourth quarter, viewership in the demo dropped 12%, and ratings fell
another 15% during January 2012.

The ratings decline has meant lower ad sales. Scripps
reported that during the fourth quarter, Travel's revenue was down 1.4% to
$67.2 million.

This is a critical year for Travel Channel because almost
half of its affiliate agreements with distributors are up for renewal by the
end of 2012, with most of the rest ending in 2013. The network receives about
11 cents per subscriber now from cable operators, satellite providers and telcos.
Without higher viewership, Scripps will have little leverage to ratchet fees

"The payoff for improved ratings on Travel is
significant," John Lansing, president of Scripps Networks, said during the
conference call, explaining why the channel was a priority.

Lowe said that when Scripps took over Travel, it relied
heavily on just one or two shows to attract viewers.

One show, Man v.
, starring Adam Richman, represented 42% of all of the network's
primetime impressions, Lowe said. Scripps tried to refresh the series, but, it
wasn't salvageable.  "Unfortunately, Man v. Food as a format just was not
sustainable beyond the 3-year arc," Lowe said. "But we still are working with
Adam Richman to develop new formats that you'll see coming out this year."

Two other Travel Channel stars continue to be successful,
Anthony Bourdain and Andrew Zimmern, plus the networks Ghost Adventures franchise. But other new shows failed.

"We took some shots at some other series that did not do
so well, unfortunately, and that's just the way it works when you're trying to
build up," Lowe said. "The first year, the first 1 1/2 years, first 2 years,
you're going to try some things in order to center in and find the voice of the
network, if you will, and we're beginning to find that voice now based on the
successes that we've had coming out of 2011, but we learned from the ones that
did not work as well."

One show that worked was Bourdain's new series, The Layover, which launched last year.
Lowe called it "a breakout success" and said it's been renewed for 2012.

Lowe said Travel also will be leveraging successful
formats from Scripps' other networks' franchise shows. That means Travel
Channel will air shows like Vacation
, Vacation Crashers and Hotel
. "We've also put our unique spin on popular programming formats
with a new series called Baggage Battle
that follows 3 very savvy auction specialists who travel the world snatching up
unclaimed and lost personal property in an attempt to turn huge profits. We
think the series promises to be great fun," he said.

 "Mostly, what
we're doing today is building out some new formats...that help us create the
brand, if you will, around Travel," Lowe said.

The goal is to strengthen the channel's incumbent series
and launch two, three or four new solid shows. That would mean "we can be
sitting here at the third, fourth quarter and looking ahead and have as many as
6 to 8 series driving the brand, versus 2 to 3 that are driving it today," he