Certain companies almost seem destined for success. While there can be many reasons for this, one of the easiest advantages for investors to spot is a lack of direct competition, which is also known as a business moat.

The media industry includes many content creators. However, few media companies offer the type of niche content that Scripps Networks Interactive (NYSE:SNI) does, and perhaps none specializes in capturing affluent viewers better.

Alongside competitor Discovery Communications (NASDAQ:DISCA), Scripps remains a leader in nonfiction documentary broadcasting, and it is one of the best long-term growth investments in the industry.


Source: Company Facebook Page

Specialized content
In much the same way that Discovery Communications has a lock on the nonfiction docudrama category with hit shows like Deadliest Catch and Gold Rush, Scripps Networks has a lock on the how-to lifestyle category. With popular networks like HGTV, Food Network and Travel Channel, the company has crafted and fine-tuned its lifestyle-oriented content over the years to remain unique in an industry that so often is willing to carbon copy successful programming formats.

Chairman, Chief Executive Officer, and President of Scripps Networks Kenneth Lowe explained it best in the company's most recent earnings release:

The engaging brands that we bring to life everyday really stand apart from the pack, if you will. Our networks are truly different. They're delivering quality in lifestyle programming that we think outshines the competition on television and the expanding array of mobile video platforms. So, no matter what screen they choose, media consumers recognize the distinctive nature of our programming and they seek it out. 

Scripps receives two benefits by having such distinct television brands. First, the company really does have very few direct competitors. In fact, the company's largest competition is probably Discovery Communications itself. Scripps Networks' Travel Channel competes with some of the programming present on Discovery Communications' namesake network, Discovery Channel. This is a major reason why Discovery Communications was reportedly mulling a bid to buy Scripps Networks earlier in the year. All talks have since ended.

The second major benefit is that due to the nature of the company's content, the management at Scripps has become increasingly efficient at capturing live audiences and affluent viewers, both of which entice advertisers.

Last year, CEO Lowe explained:

According to Nielsen, 94% of our viewing is live, and that's a staggering number. And it's important to advertisers because our viewers pay attention, they watch the commercials and then they act on what they see. They represent the highest discretionary spending in all of cable. And for the 8th year in a row, I'm delighted to say that HGTV was the #1 cable network for upscale women. 

Solid growth
Although Scripps Networks' growth has not been as robust as that of Discovery Communications, the company fares well in comparison with larger competitors like The Walt Disney Company (NYSE:DIS) and Time Warner (NYSE:TWX). The following table breaks down all four companies' projected growth in 2014: 

CompanyRevenue Growth 2014EPS Growth 2014
Discovery Communications 16.9% 24.6%
Scripps Networks 7.3% 13.4%
Time Warner -6.6% 4.2%
Walt Disney 6.6% 19.2% 

*Walt Disney's fiscal year ends in September

Aside from Discovery Communications, Scripps Networks is projected to lead all of its larger competitors in terms of revenue growth. However, Scripps' solid EPS growth of 13.4% is projected to lag behind those of all listed competitors except for Time Warner.

Wrapping up
Scripps Networks is one of the few leaders in the nonfiction television segment. With an attentive and affluent viewer base, the company should be able to continue to drive demand for its popular networks and increase its overall viewership numbers.

As long as the need for new and compelling programming remains robust, companies that specialize in the creation of unique content should remain lucrative long-term investments.


Can traditional media companies like Scripps Networks survive TV's next evolution?

Philip Saglimbeni owns shares of Walt Disney. The Motley Fool recommends Scripps Networks Interactive and Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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