PAY TV channels are fast emerging as distinct brands in their own right in Australia, both through increased stand-alone marketing and through complex cross platform deals.
These ramp up their piggyback or cooperative marketing through platform branding, but solus activity by channels is meanwhile positioning them as stand alone “destinations” for a greater number of subscribers.
At the same time, viewers are increasingly identifying with channels and being driven by content rather than platform brand. In some ways, it comes down to subscriber recruitment versus subscriber retention, and channels and platforms have differing roles to play in these.
Platform marketing now seems to concentrate on recruiting new subscribers to a package of telco and entertainment services—bundled telephony, broadband and mobile as well as pay services—and on offering flexible, low entry cost deals.
But while channels are waving their own flags, are platforms themselves receding in both visibility and customer loyalty specific to pay TV? What does that mean for advertisers and what will it mean in the long run for brand loyalty to platforms among consumers?
Joint effort
Pay TV executives seem to concur that for the consumer it comes down to content, which means channels.
Austar’s marketing director Nikki King sees channel brands as powerful tools and says marketing activity for individual channels has definitely increased, to ensure loyalty and engage customers.
“Channel brands are particularly powerful when consumers can interact with them in their local community—for example Nickelodeon’s ‘Nick Takes Over Your Park’ school holiday promotions. These types of events create huge connection and brand loyalty.
While a big believer in channel branding, King says the platform brand is vital to overall levels of customer service and satisfaction, and to innovation. She says identification and visibility of platforms will only get stronger with the launch of new capabilities such as iTV and T-mail, (email through television).
“Our role there is to work with channels to maximise opportunities and develop advertising effectiveness models.”
An example of channels and platforms working in tandem at present include the launch by Austar of a customer relationship management system, which manages the balance between customers, channel and platforms.
Another way to think about the split, according to King, is that channels are less about attracting new customers to pay and more about making their offering relevant enough to keep existing customers.
Multi Channel Network research and strategy account director Camilla Israel sees the greater availability of channels across varying platforms as a plus for everyone—consumers, advertisers and platform operators.
“A channel always wants to reach as many people as possible. However it must be a cost-effective decision and it is also important that the channel adds something to the platform package,” Israel says.
“For advertisers, they receive greater cost effectiveness into target markets.”
In terms of marketing implications, she stresses that while channels have their own objectives and strategies independent of platforms, maximum marketing impact depends on these working in tandem with platform strategies.
Israel points out there are two types of channels—those that drive subscriptions and those that retain subscribers month after month.
At Optus, media and public affairs manager Melissa Favero says the policy is an “open content regime, allowing benefits of scale to channel providers and choice to consumers. Clearly channels can provide better content if they aggregate viewers across multiple platforms and offer improved value to advertisers.
Favero says each of its programming partners has its own marketing strategy, which is supported by cross promotions on Optus and through the Optus TV magazine. Optus has a number of exclusive channels including Channel V, NRL and MTV, which of course provide special channel promotion ammunition.
“The more they can provide interest in their content, the better off everyone is.”
She says Optus as a platform has not receded in prominence despite increased visibility by channels and has grown its subscriber base more than other pay television providers in the past 12 months, through the addition of channels such as National Geographic, BBC World and Adventure One.
Favero prefers to think about the relationship between channels and platforms as a “push pull” strategy for acquiring and retaining viewers.
“It’s been a winning formula. Research shows that attributes held by the platform providers are just as important as those offered by the channels.”
Foxtel general manager–commercial operations, Nick Nichles says nothing has changed in terms of strategy between platform and channel marketing.
“Foxtel is the premier pay TV service and we market ourselves as such,” Nichles says. “We don’t need to use our product as a loss leader for any other product. We market and sell ourselves on the strength of the Foxtel brand, our existing product offering and the promise of things to come.”
As for channel versus platform marketing, Nichles says that it all comes down to the “totality of the offering and how it’s packaged up”.
“The platforms don’t survive without the product, which is the channels, and the channels don’t survive without the platform to provide the subscribers. It’s a symbiotic relationship.”
Jeff Brown, sales manager for Sportsworld Media Group (Pay Television Sales Australia), says as more channels extend their distribution across multi-platforms, “the issue of genre, followed by channel selection, becomes more important”.
According to Brown, the generalisation of splitting a pay TV budget has to be broken down by genre, and then the channels within that genre.
“Looking at the movie genre, the Movie Network offers the strongest commercial prospect for advertisers. When looking at sport, the options are Fox Sports, C7 and ESPN. All these channels have multi-platform distribution.
At present, Brown says advertisers can gain some strategic and effective partnerships with channels; for example with the Movie Network, packages include thematic sponsorships, promotion via premiere blockbuster movies, solus impressions in an ad break, program ownership and integrated advertising.
Possible static
The worst scenario of channels becoming king at the expense of platforms could be that pay TV platforms become like cable TV providers in the US—notorious for their indifference to customer service and brand loyalty. In the US, content is king, so for cable operators, brand is irrelevant.
Rob Hunt, CEO of home shopping channel TVSN, doubts we will ever reach that state of affairs in Australia.
“I guess you have to look to more mature markets on this issue. In the US pay TV platforms are despised by consumers. Cable companies don’t care about brand and customer service because channel branding is so strong. I don’t think it will happen here.”
One of the reasons is the ability to offer bundled services. In Hunt’s view, channels in the future will completely own the concept of content and platforms will pull back to being service providers. However, if you get this right, as Hunt points out, it is a powerful marketing plus.
“The economic relationship is unique for home shopping compared with other content. The platforms get 5% of sales and don’t pay for content. They are incented to lift sales as much as we are. Relationships are very close and complementary, so we don’t have brand clashes like there was with Foxtel and Austar.
“For platforms the key to good marketing now is to offer the best deal and the best flexibility across the channels. Austar has done well to grow subscribers by offering low level entry cost with additional content available for extra. Foxtel has also done an excellent job by not discounting service even when competitors such as Optus are just around the same corner.
“Optus branding across all businesses is also very good and they spend a lot of money on it. It’s a very trusted and warm brand.”
Movers and shakers
Angelo Frangopolous, managing director for Sky News, says Sky has definitely ramped up its solo activity in the past 12 to 18 months to position itself as Australia’s news channel.
“As more and more channels enter the market, establishing your niche and making that clear to audience and advertisers is the name of the game,” he says. He doesn’t see any necessity or even problem in platforms receding in prominence—he says the channels are the main focus, regardless of platform.
As for cross-platform channel deals, Frangopolous says it’s good news all around.
“The bottom line is that without the channel there’s no platform and without the platform there’s no channel.”
Over at TV1, marketing manager Catherine Field says her channel is very active in major quarterly promotions in conjunction with Foxtel and Austar.
She believes platforms are still the first and most important point of contact, however.
“Foxtel is seen as the generic pay TV brand in the metro market and Austar is the same in regional centres. TV1 is therefore the product of a larger universe. It is important for channels to grow and develop but our primary focus is to provide entertainment.”
Field says that as penetration for pay has grown in the past six years to one in four households nationally, TV1’s brand awareness has increased too. Current marketing activity includes extending on air promotion of the TV1 brand into subscriber magazines and other media.
“We are investing significantly in external activity including radio, outdoor, cinema and new media such as avant cards and signage on Vespa scooters.”
Field admits that channels may well be superseding platforms in terms of visibility to existing subscribers, if only because once in the pay environment, viewers are more exposed to channel programming, promotions and branding than the overall Foxtel message.
Global push
National Geographic has embarked on a major global programming and marketing strategy in the past year, says Kim McKay, senior vice-president, marketing and communications, National Geographic Channels International (based in the US).
NGCI now airs in more than 130 countries, reaching up to 100 million homes. McKay says strategy is structured around three or four major events which leverage the assets of the associated National Geographic Society. But while global in concept, it is local in execution. So called “tent pole” programs—those which have associated promotions and spin off marketing—such as Pearl Harbour: Legacy of Attack and Quest for Noah’s Flood recorded the highest ratings for the channel since its launch in Australia four years ago. They have also attracted strong advertiser interest across NGCI’s integrated magazine, dot com and TV packages.
NG is also active in developing on-air talent. In Australia, it is promoting Hayden Turner, an Australian zoo keeper and eco-adventurer who appears globally on NG’s EarthPulse series.
McKay says it is of great benefit for viewers and advertisers to have the channel available on multiple platforms, because of wider audience penetration and reach.
“Platforms are critical to reaching the subscriber directly. We work proactively with our affiliate partners. They are intrinsic to local market success. And because we have so much programming and promotional activity to share around, platforms don’t need to use the channel in a competitive way. We are a driver channel so the more people know about us, the better for everyone.”
