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12/24/2012

A rosier picture for HGTV

The Wall Street Journal

A Rosier Picture for HGTV
As Housing Market Improves, Shows on Home & Garden TV Reflect Upswing

By SHALINI RAMACHANDRAN
 
If any further evidence is needed that the housing market is on the mend, check out Home & Garden Television.
 
After shifting its focus away from lavish homes and big real-estate purchases after the 2008 housing crash, in favor of more-subdued shows on renovation and remodeling, the lifestyle cable channel is filling its schedule with programs that, if not quite boom-mentality, are decidedly more upbeat.
Last week, for instance, HGTV announced the greenlighting of "Power Broker," about a top real-estate agent who helps couples buy affordable houses for renovation into their dream homes.
 
It is the latest in a series of new shows about house-buying that the network, owned by Scripps Networks Interactive Inc., has added in the past year. These include "Property Brothers," "Love it or List it" and "Buying and Selling." Also planned for next year is "Fixer Upper," about a Texas couple who help young, first-time home buyers purchase drab, cheap houses and remodel them.
 
Highlighting the shift in focus: Six months ago HGTV canceled "The Unsellables," a program about owners who couldn't sell their properties, after seeing a drop in its ratings.

HGTV's viewership has more recently trended up. After being down 4% in prime time among all viewers between last September and this August, audience levels rose 16% in the first few weeks of the fall season compared with the year-earlier period, according to Nielsen. An even bigger improvement was seen in the 18-to-49-year-old demographic, most sought after by advertisers.
 
While HGTV's growth has slowed since October, its audience was still up 1% through Dec. 16 from the end of September compared with a year earlier. In comparison, HGTV's sibling channel Food Network has seen a 16% drop in ratings in the same period.
 
Scripps Chief Executive Ken Lowe told investors recently that the company has seen a correlation between housing market conditions and HGTV's ratings. "As the housing slump hit, we experienced a little bit of downturn with the ratings on HGTV," he told a conference sponsored by UBS .
 
Given that "people weren't feeling so positive about their homes," he said, watching HGTV programs "was certainly not as much fun." As HGTV General Manager Kathleen Finch said in an interview, several of the channel's shows had been pushing the message that any investment in the home would increase home values, which was "not 100% accurate any longer…and not the message the market was wanting to hear."
 
In the past year, various economic indicators suggested that the housing market has begun to recover. On Thursday, for instance, the National Association of Realtors said that sales of previously owned homes in the U.S. grew last month to its highest level in two years.
 
Scripps has noticed the same trend. Mr. Lowe told the UBS conference, "we've started to not only see the turnaround [at HGTV], but I think our own internal research says that people are feeling better about their homes."
 
Ms. Finch said one signal the channel got that the market was picking up came about a year ago, when the channel started running into an unusual production problem: The homeowners whom crews were following for certain reality shows were getting outbid for potential homes by other buyers unaffiliated with the show. "There were bidding wars going on," Ms. Finch said.
 
That, alongside improved housing data, led the channel this year to proceed with some new shows focused on buying houses. HGTV has an informal network of a few hundred Realtors who help cast homeowners who appear in its shows. Research from that group led the channel to set the first season of its new show "Buying and Selling" in Austin, Texas, a market that Ms. Finch says had shown more signs of recovery than elsewhere.
HGTV isn't alone in changing gears. Discovery Communications Inc.'s TLC network plans to relaunch the show "My First Home" beginning with new, back-to-back episodes in April, following a near three-year hiatus.
 
TLC says it isn't pegging the new home-buyer content directly to the market upswing, but Amy Winter, the network's executive vice president and general manager, says it is a help.
 
"Life circumstances and the economy absolutely help the appeal of some of these programs," she said.
 
The experience of the downturn still has its echoes in HGTV's lineup. HGTV plans a show for next year called "Flip or Flop," which will follow a couple in California making a living out of remodeling foreclosed homes and selling them.
—William Launder contributed to this article.
 
Write to Shalini Ramachandran at shalini.ramachandran@wsj.com
A version of this article appeared December 24, 2012, on page B4 in the U.S. edition of The Wall Street Journal, with the headline: A Rosier Picture for HGTV.