NCtrend: Showroom spotlight
On the set of Space Off, two teams of interior designers devise a plan to decorate a bedroom for a client’s anniversary. High-end furniture and accessories fill the rooms. The lights are bright, and there are cameras in just about every direction. The duo with the best design will move on to the next stage of the style competition. This show airs on The Design Network, a home and garden style channel with offices in all the right places: New York City, Los Angeles and Jamestown, a town of 3,600 people sandwiched between High Point and Greensboro.
That’s right, Jamestown, where something disruptive is going on in the basement of Furnitureland South, the self-proclaimed world’s largest furniture store with more than 1 million square feet of showroom space. Space Off and other shows on The Design Network aren’t made for television; its series are tailored for an online audience.
Network founder and CEO Jason Harris grew up in furniture, the youngest son of the late Darrell and Stella Harris, who opened their store in 1969. His older brother, Jeff, is now president. After leading the company’s marketing and sales for 18 years, Jason now focuses on connecting with an online audience that wants a constant stream of guidance on how to spruce up their homes.
Harris conceived the network after attending a discussion at High Point University about challenges in the industry. There was a lot of talk about supply-chain issues and manufacturing, but something was missing. “Nobody was talking about connecting these brands with the consumer.”
Harris’ goal is to take advantage of the rapid shift from cable and satellite TV subscriptions to less-expensive, on-demand video services such as Netflix and Hulu — a trend popularly known as “cord-cutting.” When seeking startup partners in 2012, Harris was ahead of his time. Forty percent of U.S. households subscribe to video-on-demand services, according to a report by Nielsen NV, which measures TV viewership. Those households spend about 75 minutes longer each day watching video, compared with people who have Internet connections but no video-on-demand service.
“We’ve seen so many changes to entire industries, like music and phone books, with the Internet, but it really hadn’t changed television yet when I started this. So there’s an opportunity to create a new type of network that’s designed for all screens,” he says.
The approach is multifaceted. The network produces streaming content for its website. It partners with sponsors, including Atlanta-based The Home Depot, to syndicate the videos on other sites. And there’s retail: While the videos play, viewers see links to items that appear in the show. Love that weathered-oak dining table? Buy it here.
Harris’ business plan was simple: Pay design and style bloggers and YouTube stars, who are already drawing online followers, to make a series of five- to seven-minute videos with higher production value. Because Furnitureland South already had video equipment, most of the startup costs involved creating the website and generating content. Sponsors pledged monthly support, and the company made an undisclosed investment. While Harris won’t release revenue totals, he says the network has been profitable from its inception, in part because it shares accounting and other resources with Furnitureland South. The Design Network has about 10 full-time employees working on graphic design, marketing, programming, videography and social media.
But nothing has been as simple as he expected. He approached about 50 companies seeking initial partnerships. Only five signed on: Atlanta-based Serta Simmons Bedding LLC; Austin, Texas-based Four Hands LLC; McConnellsville, N.Y.-based Harden Furniture Inc.; Chicago-based Baker Furniture; and Thomasville Furniture. Thomasville fell off when its parent company, St. Louis-based Furniture Brands International, filed for bankruptcy protection in 2013. It sold most of its assets to Heritage Home Group, now based in High Point, in November 2013.
The retail aspect of the website hasn’t generated significant sales. Harris expected that once the content was up and running, large numbers of viewers would tune in. “It doesn’t really work that way. It takes time to have the audience at a giant scale.” Software issues plagued the website, prompting a step back. TheDesignNetwork.com relaunched in April on a new platform with a rush of new content. The site now has about 50,000 unique visitors each month, and videos on Facebook get about 500,000 views, Harris says.
It would have been easier, he says, if he’d raised millions in venture capital, but that’s not the model for the business his parents developed. They started small and continuously expanded. Born and raised in High Point, Harris earned a degree in industrial relations at UNC Chapel Hill in 1994 and then joined his family at Furnitureland. Both Darrell and Stella Harris died within the last year, leaving Jeff and Jason as co-owners.
The network now has about 15 sponsors, up from the original five. It’s small and, therefore, nimble. HGTV, the primary player in home and garden entertainment that is owned by Scripps Networks Interactive, can’t take as much risk in its content as The Design Network, Harris says. “People thought I was crazy. A lot of them still think I am. People aren’t there yet. I see where this can be. But most people think in terms of just today.” He also knows advertising is rapidly shifting. “What I saw two years ago, they’re all over it right now. Some of these companies are going from like a 2% digital spend to like a 90% digital spend.”
Lauren Clement, one of the network’s stars, runs the design firm Lauren Nicole Inc. and a retail shop, Lauren Nicole Home, in Charlotte. Clement had a following on her blog when The Design Network approached her. She and her mother, Linda Riddiough, a 30-year veteran of interior design, star in Design 101, which ran four episodes in its first season in May.
“The design business is such a touchy-feely industry that bringing it to life on camera is right where we need to be.” With people always on the go and watching less live TV, she says, the shorter format of The Design Network is right on track.