The series of live shows ran over a weekend in late October, hosted by actress Jane Seymour and TV interviewer/pitchman Gordon Elliott and featuring other celebrities and hosts who appear regularly on other Scripps networks - Home & Garden Television, Food Network, DIY: Do It Yourself, and Fine Living.
But one key element of home shopping is notably absent in the first few minutes of the opener. There's nary a mention of product, no relentless drive to sell. It's 15 minutes before the familiar product data and price returns to the screen, still longer before the hosts get into the rhythm of sales that is so familiar to the genre.
Welcome to television retailing, Scripps Networks-style.
Ever since buying 70 percent of the underperforming Shop at Home a little over a year ago, Scripps has been focusing on shoring it up and learning how to move product in a medium that's far removed from the world of the 30-second spots that pay for Scripps' well-known networks. While not a monumental task, the turnaround is still pretty considerable. The multi-billion-dollar TV retailing industry is dominated by two major players, QVC and HSN. Shop At Home comes in fourth behind ShopNBC, which is owned by ValueVision and NBC.
Last December, Scripps struck a deal to merge with Shop at Home's minority owner, Summit America Television. When the deal closes in June, Scripps will own all of Shop At Home as well as five stations that represent about 5.2 million potential viewers over air or by cable and satellite carriage.
The deal accelerates what has been Scripps' plan all along: to create a commerce platform that complements its lifestyle networks, both the widely distributed HGTV and Food and its emerging channels, DIY and Fine Living. In the past three years, Scripps' attention has focused on TV retailing as a way to accomplish that. The High Point weekend was among the first tests of this strategy. While it may not have reached QVC levels of sales, High Point helped encourage Scripps that it might be on to something.
Are we seeing the future of brands on television? It's too early to know. But one thing is for sure. Scripps has made a multimillion-dollar bet on the future that might have just as much to do with the future of its existing cable networks than with turning around the fortunes of a shopping channel standing in the shadows of QVC and HSN.
Not So Wild a Dream
Scripps chief executive Kenneth W. Lowe came up with the idea of Home & Garden Television in the early 1990s, when few people thought a targeted lifestyle channel could survive, let alone thrive. E.W. Scripps had been a newspaper company for more than 100 years. It had a respectable stable of local TV stations but nothing in cable. But in the early 1990s, Scripps faced the same crossroads as other newspaper-heavy media companies trying to plan for the future. Lowe suspected that as technology improved, there would be more of a drive toward interactivity and accountability. To play in that world, Scripps would have to think differently. It zeroed in on the viewers who would be interested in home improvement and interior decoration, knowing that it could line up advertisers who wanted to reach them but didn't have ways to do so outside of print. HGTV was born.
Even then, commerce was key to the vision. Early plans called for 25 minutes of programming and five minutes of a host pointing to where the products seen in the show could be found. Interactive television had its place in HGTV too.
"We thought very soon that you would be able to see, say, a sofa on HGTV and through your remote, click on it and pull up some information on that sofa, get the phone number of a retailer, get the phone number of a manufacturer, and pick up that consumer information right off the screen," says Richard A. Boehne, executive vice president of Scripps Networks. "As it turned out, that concept was too early and the way TV was structured, it really couldn't accommodate that."
But HGTV did create an 800 number where a consumer could find out more about the products featured on a given show; that information is also available on the Web now. With a shopping channel, HGTV and Food Network can strengthen the connection between products and sales.
"This is the next logical step in the execution of Scripps' TV strategy," said Lowe during a conference call with Wall Street analysts announcing the merger last December.
A Work in Progress
Scripps' ambitious plans for Shop At Home are still in the early stages. In the first months of this year, work moved forward on several fronts. Judy Girard, credited with turning Food Network into the brand that it is today, was tapped in late January to run Shop At Home. The channel is in the field right now with a study that Girard says will give more information on its audience and, more importantly, the consumer base that Scripps hopes to turn into home shoppers. Scripps' ad sales force has been selling. And the transformation of the channel continues as content becomes more aligned with the Scripps lifestyle brands.
The vision for Shop At Home is as a targeted commerce platform that meshes with Scripps lifestyle networks, particularly HGTV and Food. It will continue programming with a commerce element, like the High Point show and a feature on HGTV's Dream Home Contest. The other Scripps networks might do shows that refer viewers to Shop At Home for the harder sell. Shop At Home offers sponsorships for advertisers and marketers that either complement the spots they run elsewhere or give them something that they can't get on the lifestyle networks: product placement and demonstrations. One thing is for sure: They're moving away from the model that works so well for QVC and HSN, where the channel buys the products and then sells them on the air.
"We're building a boutique instead of a big store... And we'll do it in a television way and not be so shackled by the way that it's been done for 20 years," says Girard.
That will be quite a switch for Shop At Home, which until only recently was known for its sales of coins and sports memorabilia plus TV retailing staples such as jewelry, health and beauty products, and electronics. Shop At Home's products will fall into categories closely aligned with its sister networks and will be presented differently than today.
"We'd be doing more television. We'd do more story. I'm a plain television person," Girard says. "I think that we have a great story to tell about a product. That's what makes great television. Products that have great stories are where we're headed on all those categories in all of those brands." Shop At Home would showcase products and the hosts of other Scripps networks, under what will soon be a definitive brand that travels across both the shopping channel and the other networks.
"The first question is, how do we use the name and the brand of these networks on Shop At Home, and vice versa? How does Shop At Home come to the brands, if at all?" Girard says. "I would think we would want to start Food Network shows or commerce shows on Shop at Home, but not brand the entire food category over there. We have to be careful how we use the brand, and then cross-promote to that."
One of the early crossovers is scrapbooking, a staple of programming at DIY. A scrapbooking marathon six months ago on DIY featured two-minute spots that directed viewers to Shop At Home, where they could get the machine, glue, and paper that are the raw materials for the hobby. DIY's scrapbooking hosts appeared on Shop At Home, where the emphasis was not only on selling but also demonstration. Sales $500,000 a day.
"That category is now one of the most successful categories on Shop At Home, and it's never been done by a home shopping network before," Girard says. "It is the beginning of actually executing the vision."
That strategy would chart a course for Shop At Home that has either been discounted by the other TV retailers or, in the case of ShopNBC, tried with mixed success. QVC and HSN don't sell time, preferring to take the inventory risk on products and selling quickly. They are the leaders in TV retailing, with a core audience of dedicated shoppers and no reason to mess with success.
"QVC airtime cannot be bought. It can only be earned, with compelling products and differentiated brands," says Doug Rose, QVC's vice president of merchandising brand development. "QVC customers determine what appears on QVC, and how often. They vote with their phone calls and mouse clicks, and we watch the election results every minute."
Jennifer Aniston's Sweater? Not Yet
When NBC made its investment in ValueVision in the late 1990s, ValueVision became the poster child for the modern shopping channel, one that could take advantage of the connection to a network to create a new transactional model. To borrow the cliché of the time, if you liked Jennifer Aniston's sweater on "Friends," you could buy it with either a click or a call. ValueVision was rebranded ShopNBC and the networks set about trying to make it work. There were some celebrated successes. Katie Couric's "Today" show plug for ShopNBC's sale of Olympic berets led to tens of thousands of sales in 2000. However, there were few other winners. Eventually, ShopNBC became less about cross-promotion and more about straight selling.
"I think a lot of people, as soon as they saw the NBC involvement in ValueVision, assumed that the future was that 'I love that sweater that Jennifer Aniston's wearing' and next thing you know, you're able to buy it," says Will Lansing, president of ShopNBC. "I don't think that's our future. I think we have to have an independent network identity that says we're all about retailing... I don't think this is an outlet for buying what you see on other networks." That's exactly what Scripps wants to do, however. And several observers think it's not unreasonable to assume Scripps could do well.
"They know lifestyle media brands really well, especially the ones they play in," said Tim Hanlon, vice president of emerging contacts at Starcom MediaVest Group in Chicago. "I think it's clear they can take some of that programming savvy-ness and depth of relationship to consumers in terms of aspirational programming, and I think they have a really good shot at leveraging that somehow into a commerce play."
This content-commerce marriage hasn't worked yet with other players but that Scripps is taking a different spin, noted David Card, an analyst with Jupiter Research. "They're betting on the idea that they wouldn't be selling just to the QVC audience, who has sort of been trained to tune in to a network and shop, but that they would be taking advantage of the richer content to sell it, the idea that it's perfectly natural," Card says.
A few years ago, Ivana Trump tried to create a home shopping channel that was based primarily on higher-priced items that far overshot the TV retailing fare of the time. It didn't get off the ground. Pam Danziger, who owns Unity Marketing and has written a book called Why People Buy Things They Don't Need that deals a lot with TV retailing, thinks Scripps might be onto something with Shop At Home.
"I think the time is right now for it to move in that direction, toward a more upscale and affluent marketplace," she says. But Shop At Home would still have to be judged, in large part, in the way all TV retailers are measured: whether products move and how fast.
"The traditional wisdom in this space is that transactions are transactions, shopping is shopping, and it's not the same as entertainment," ShopNBC's Lansing says. "I'd like to believe that a big part of what we do is entertaining our viewers, but it's very much a transactional experience. It's very much about selling product."
A test of Shop At Home's prospects will be its ability to attract viewers in what is a different direction than traditional TV retailing, says Barbara Tulipane, president of the Electronic Retailing Association in Washington, D.C.
"It will be interesting to see what Shop At Home does," Tulipane says. "The bottom line is you're trying to attract viewers, and I think, good for them, they're reaching out and doing cross-promotion. I guess time will tell."
Scripps' approach might succeed where others have failed as long as it fills a consumer's need, says Patti Freeman Evans, a retail analyst at Jupiter Research. "There are a lot of product affinities out there that would make sense [on HGTV]," Evans says. "It may be a more natural tie than has been tried in the past."
It's the natural tie-ins that make Howard Horowitz, president of market researcher Horowitz Associates, think that Scripps will be more successful with Shop At Home than it would if it just kept selling the staples of TV retailing. There are actually useful functions for everything that Scripps offers on its networks, compared to a novelty item that could be sold via interactive TV and a commerce play between a network and a shopping channel.
"That's simply a tchotchke for sale that you've advertised a lot and now you want to get some people to buy it," Horowitz says. "But painting your bedroom, and [buying] kitchen appliances and bathroom fixtures, all of these things are life's necessity. It's not Jennifer Aniston's sweater, it's not zirconium jewelry. It plays into the core of why these shows are so popular."
Reaching out to advertisers has expanded Shop At Home's offerings. The sewing machine brand Singer recently went on Shop At Home for a three-hour product demonstration. Singer paid Shop At Home for the marketing time and visibility along with a percentage of sales. Singer sold $55,000 to $60,000 - $20,000 an hour, compared to an average $2,000 to $3,000 an hour through other venues.
"We are selling a combination of marketing and transaction," says Steve Gigliotti, executive vice president of ad sales and emerging media at Scripps Networks. "When we talk to our clients about their marketing challenges, we try to look at all the assets Scripps Networks can offer to create a customized solution. We believe Shop At Home gives us another, very valuable tool."
Scripps will be the first to acknowledge it doesn't have everything mapped out. It's not proclaiming that it's getting into a new business ahead of the demise of the 30-second spot or even that it knows how things will turn out. But Scripps is confident it has the skills to make not only a successful channel but also a winning tie-in to the other television lifestyle brands it has forged in the past decade.
"The multiple platform is Shop At Home the linear network, but it's also direct response spots on Home & Garden, it's infomercial and infomercial time on all four of our networks, it's the website, it's broadband, it's VOD, and who knows what comes down the pike," Shop At Home's Girard says. "How much we can make television on that network, I think, is what we're R&D'ing. The linear network itself could stay hard-sell if it needed to. It moves products. But all of those platforms are places to connect the viewer to commerce, whether it's our own commerce or an advertiser's commerce."
Boehne, another Scripps executive, says the company doesn't look at its task as trying to take share away from the big players in TV retailing. There's enough growth for everyone, he says.
"We're starting out small. We're just trying to pick up a few nickels and dimes here, compared to their big dollars," Boehne said. "I don't think anybody at QVC is thinking, oh my gosh, those Shop At Home guys are going to take money out of our pockets. It's such a growing, robust marketplace."
Shop At Home's success will depend on its positioning as a high-end opportunity, says Roberta Haber, senior vice president and media director of Boston agency Hill, Holliday. "HGTV, Food Network, those are good, solid nets," she says. "There's nothing schlocky about them. What they would need to do is bring Shop At Home to that level. If they can position this as a way to bring foodies over to Shop At Home and buy the high-end Emeril products, I don't think it hurts the brands at all."
Starcom's Hanlon says Scripps has built Home & Garden and Food into powerhouse brands within the audiences they're trying to reach and the commerce play is a strong one. Hanlon thinks it's a good move, no matter what the future brings. "It's not a bad piece to have in the arsenal, even if you don't know exactly what to do in the short term. Having a commerce engine that is television-based is a very smart move because you'll be able to do something with it," Hanlon says. "I wouldn't bet against Scripps in terms of figuring it out."
Direct Selling On TV... It's Been Tried Before - By Joe Mandese
Ever since the emergence of Home Shopping Network and QVC, the major television networks have struggled to find a way to incorporate electronic retailing into their base business model. For the most part, the biggest ones have failed. And that, says history, is as much a testament to broadcast TV's greatest attribute - broad reach - as it is to their inability to develop a practical direct-to-consumer commerce model.
Where television home shopping may work as a dedicated channel model, such as HSN or QVC, or even as part of an integrated niche programming model like the Scripps Networks, it has proven to be a nonstarter for networks that focus on maximizing audience reach. Why? Because home shopping, even in its most integrated forms, generally appeals to only a fraction of the TV audience, and any blatant attempts to integrate retail pitches into programming have generally proven to detract from the kind of audience-building or retention flow that broadcasters work so hard to generate.
That was the case with "Nightcap," ABC's ambitious but ultimately failed attempt to break into the home shopping business. The show, a late-night program that aired after ABC's vaunted news program "Nightline," was a mix of talk and celebrity chatter that mixed product demos and sales pitches in a nightclub-like setting hosted by Robin Leach, the syndicated TV star best known for "Lifestyles of the Rich and Famous."
The show was a short-lived experiment that lasted only weeks before being pulled. The reason: It failed to hold a significant audience share from the relatively low-rated late-night lead-in.
ABC was not the only one to explore or experiment with home shopping. During the early 1990s, CBS and NBC also had teams devoted to developing an electronic retail component, but for the mostly failed.
NBC was perhaps the most aggressive, trying a wide variety of options, including attempts to pitch products directly in its highest-rated prime time programming. The Peacock Network ran special promo spots, dubbed NBC Direct, which offered viewers the opportunity to instantly purchase products by calling a special telephone number. In a way, the tests worked too well. Just one of the prime time promos generated enough traffic to overload the call centers, dooming the effort. NBC also tried a daytime home shopping show based in Minneapolis's famed Mall of America. That too was short-lived.
Unlike the other major networks, NBC and its management team at parent General Electric never lost their lust for home shopping and ultimately recognized the inherent problem of trying to integrate it into a broadcast TV model. Instead, they went out and acquired a stake in a second-tier home shopping channel, ValueVision, and then rebranded it into ShopNBC.