Food Network, HGTV Drive Scripps Networks' Upside Surprise

It's been a busy two days for Scripps Networks Interactive, between buying a 65 percent stake in Travel Channel and reporting better-than-expected earnings growth.

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Net income grew 14 percent, with earnings per share of 39 cents beating Wall Street expectations. Its Food Network and HGTV channels continued to drive remarkable growth, with higher affiliate fee revenue boosting the numbers.

And while other media companies show advertising declines moderating, Scripps actually managed a 0.5 percent growth in ad revenue.

I had an exclusive interview with Scripps Networks Interactive CEO Ken Lowe about earnings and the Travel Channel deal. (See Video below.) Despite the fact that the deal's valuation of the channel at $975 million seems rich, he said it's totally worth it for Scripps, as a tidy fit with its other "lifestyle" networks.

He also said that Travel will be key in the company's ongoing growth. Last month it announced it's launching the Food Network in Europe, Africa, and the Middle East, and just this week it announced it's launching the Food Network HD in Southeast Asia.

When it comes to maintaining that affiliate fee revenue growth, he said that building a bigger arsenal of high-rated shows, now with a new channel, will help maintain that growth.

Don't confuse SNI with SSP, the E.W. Scripps company, which focuses on newspaper publishing. Scripps Networks Interactive — the fast-growing cable and Internet properties — spun off from the newspaper division on July 1 2008.

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