Meet the Programmer: Shop At Home

Cable World, Jan 24, 2005

By Shirley Brady

One year ago, Judy Girard was asked to leave New York and switch hats by her bosses at Scripps Networks. Her challenge: to duplicate the success she had as president of the company's Food Network, which she transformed into a powerhouse brand. This time, she's been working her magic on Scripps' money- losing home shopping network, Shop At Home.

Susan Packard, Scripps Networks president of affiliate sales and international development, had spent 2003 sharpening and expanding the network's distribution. She wanted to transform Shop At Home from a second-tier home shopping network--trailing QVC and HSN--into an integrated, interactive commerce business focusing on the home category. First she canceled 5 million subscribers that were not Shop At Home buyers. "It's not about viewing, it's not about the number of households you're in; it's about how active are those households as buyers," Girard says. Packard also renegotiated several of the network's distribution deals.

Shop At Home entered 2004 with 47 million subscribers and ended the year with just more than 54 million subscribers. The network gained carriage under Packard's "contract nip-and-tucking" in key home shopping markets, including Dallas, Houston, New Orleans and New York City, where the network is carried on both Time Warner Cable and Cablevision.

Its business model is unique: Scripps pays its affiliates and does not extract a fee. "We're on a model that is a guaranteed payment model, it's not a percentage of revenue--that's HSN's and QVC's model," says Packard. "Our affiliates have a comfort that they will be getting the proceeds of some payment from us to them, and they can book it and know what it is every month."

That model is the financial underpinning of Scripps' vision of Shop At Home as a differentiated electronic retailer that leverages its affiliates' and viewers' confidence in its other network brands (Food, DIY, HGTV, Fine Living and eventually its recently acquired Great American Country). Scripps hopes for Shop At Home will drive its overall commerce strategy and expand its number of active buyers.

That's where Girard's team, including former Food Net marketing head Adam Rockmore, now SVP of marketing and interactive commerce for Shop At Home, come in.

They spent their first year addressing infrastructure issues, fixing technical systems and building a new warehouse; tweaking the on-air look; and signing HGTV personality Carol Duvall to a multi-year merchandising and product development deal (similar deals with other Scripps Networks talent are in the works). They've already seen an on-air sales spike for scrapbooking and--this past Christmas--robotic cars, both fuelled by DIY Network. It's all about selling "the merchandise, the merchandise, the merchandise, the merchandise," Girard says.

The goals for 2005 include incorporating online "stores" related to the Scripps Networks brands on Shop At Home's website. Food's online boutique within the Shop At Home department store is up-and-running. DIY's will be ready Feb. 1.

Another, more urgent, goal: Getting the network into the black. "We need to get it out of the loss so we can operate with a freer hand," says Girard. "We want to upgrade everything we do--the merchandise, the hosts, the production."

Rockmore's goal is to lure the 9 to 10 million unique monthly visitors to Scripps Networks' website to Shop At Home. "Within the year, Shop At Home will become the engine and foundation for commerce for all our network brands," he says. "It will be one shopping cart and one experience, just different entry points."

Shop At Home at a Glance

Location: Nashville, Tenn.

Founded: June 1986

Subscribers: 54 million

Service level: 24/7; no charge to affiliates, with guaranteed commission to systems.

Management team: Frank Woods, chairman; Judy Girard, president; Stephen Hanon, CFO; Mike Lubka, EVP and chief merchandising officer; Doug Hearst, SVP, affiliate marketing; Adam Rockmore, SVP, marketing and interactive commerce.

Ownership: Scripps Networks paid $49.5 million for a 70% interest in Shop At Home founder Summit America Television Inc. in 2002. It acquired the rest of Summit America in a deal that closed June 2004.

Competition: Of the roughly dozen home shopping networks, QVC and HSN are the biggest, with Shop At Home in the second tier (No. 4 overall) just behind ShopNBC.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]