How HGTV beat CNN in 2016
Nikki Justice doesn’t seem like she’d be a big fan of HGTV’s show “Property Brothers.” A first-year astronomy and physics major at Ohio State University, she’s never owned a home, let alone flipped one. But her parents watched regularly, and now Justice tunes in several hours a week to watch one home transformation after another.
“A lot of the news these days is really stressful,” she said. “HGTV is not something that’s going to hurt me. I watch it and dream of what I want for my future house.”
So does Washington Redskins quarterback Kirk Cousins, who recently said that he prefers HGTV to ESPN. Taylor Swift shared on Instagram her affection for HGTV’s “Fixer Upper.” And Hillary Clinton said she likes “Love It or List It” and “Beachfront Bargain Hunt,” calling them “relaxing, entertaining and informative.”
The escapist appeal of looking at other people’s beautiful homes turned Home & Garden Television into the third most-watched cable network in 2016, ahead of CNN and behind only Fox News and ESPN. Riding HGTV’s reality shows, parent company Scripps Networks Interactive Inc. has seen its shares rise more than 30 percent this year, outperforming bigger rivals like Walt Disney Co., 21st Century Fox Inc. and Viacom Inc.
HGTV’s formula is relentlessly consistent: a shabby house gets a makeover, and a happy couple moves in. A variation on the theme — house-flipping for fun and profit — works too. The network has aired 23 different flipping shows over the past few years. Today “Flip or Flop” and “Masters of Flip” run in prime time.
In the cable industry, though, success is relative. Like other networks, HGTV has lost nearly 4 million subscribers in the past two years, though ESPN lost about 6 million in that time. In a note last month titled “As Good As It Gets?” Michael Nathanson, an analyst at MoffettNathanson LLC, predicted viewership at HGTV has peaked and advised clients to sell Scripps shares. “I just worry that ratings at cable networks are volatile,” he said in an interview.
Since the mid-1990s, HGTV has made its home in a low-slung building about 15 minutes outside of downtown Knoxville, Tennessee. Like HGTV itself, the offices feature some homespun touches. The walls of Scripps Chief Executive Officer Ken Lowe’s office feature framed press clippings from the local newspaper, the Knoxville News Sentinel. Nearby, a 96-square-foot tiny house — a feature of several HGTV shows — has been decorated to look like a gingerbread house.
The last year has been vindicating for Lowe. When he started HGTV in 1994, few people thought anyone would watch his network “about grass growing and paint drying,” he says. For a while, Time Warner Cable wouldn’t even carry the channel in New York City, because, he was told, the metropolitan audience wasn’t interested.
Lowe shrugged it off. Walking the aisles of Home Depot Inc. and Lowe’s Cos. stores around the country, he had identified an audience that was passionate about their houses.
“If you watch a lot of our competitors, it’s about bling-y expensive real estate in New York or crazy flipping in L.A.,” said Scripps chief programming officer Kathleen Finch. “For the most part, our viewers live in suburban houses with yards. We embrace the real America.”
So do advertisers. The average HGTV viewer is a college-educated, suburban woman with household income of $83,600 a year and an interest in home improvement — catnip to advertisers like Home Depot and Lowe’s. Wayfair Inc., an e-commerce company that sells housewares, is one of the channel’s biggest advertisers, with product integration, commercial time and on-air graphics that urge viewers to “shop this look” on the company’s website.
HGTV’s ad rates are about twice what other cable networks command, said Nancy Go, Wayfair’s vice president of brand marketing. But she says it’s worth it: Wayfair’s web traffic doubles when it airs commercials on the network.
Meanwhile, HGTV is expanding internationally, with new versions in Singapore, New Zealand, Canada, the Middle East, North Africa and, coming in January, Poland. The network is also aiming for millennials, producing short-form videos for Snapchat and Facebook. As 20-somethings start buying their first homes, the network’s reach among young people is growing.
The key, Scripps executives agree, is a refusal to upset HGTV’s audience. There’s no profanity, and on-air conflicts are confined to paint colors or tile choices. Instead of making the network feel trivial, its fans say, the relentlessly pleasant programming is a comfort, especially in hard times.
That’s surprised even Lowe. He pulled the channel off the air after the Sept. 11 attacks because he felt it wasn’t appropriate to show lighthearted fare after so many people died. He replaced the signal a few days later after fans emailed and wrote to say they wanted to watch — they needed something to help them forget.