MEDIACOM Marketing Digest 2 November 2004

MEDIACOM Marketing Digest 2 November 2004

Paul Holmes Joins Prime

At the beginning of October, US satellite radio provider Sirius announced the signing of shock jock Howard Stern, a move hailed as the catalyst to legitimise satellite radio in the US.

Similarly, the arrival of Paul Holmes will catapult Prime into the big leagues - not just because Paul has built a substantial following over the years but also because - for better or for worse - he is both news-breaker and newsmaker. And his daily NewstalkZB radio show won't hurt as a promotional vehicle for the new TV show, either.

The new Holmes show will undoubtedly slot into the 7pm zone, carefully left blank in yesterday's unveiling of the Prime schedule for 2005. Lest there be any doubt that Prime is taking direct aim at TV One , a quick glance at a couple of the cornerstone components of the new programming lineup - a drama slot at 8.30 on Sundays, and the good old 8.30 Doco slot on Tuesdays - should put those concerns to rest.

Of course, audiences watch programmes, not channels, and those two timeslots in particular will rise or fall depending on the strength of the content in any given week. Prime have pre-announced some tasty docos which will lure audiences, including:

* The Ice Man & The Psychiatrist - chilling confessions of a real-life hitman * Death In Gaza - living under the shadow of the guns * The Truth About Killer Dinosaurs (two episodes), a BBC production featuring CGI animation by the wizards behind the Harry Potter films * Nile (three episodes) - the BBC/Discovery Channel co-production which tells the fascinating story behind the longest river in the world.

And substantial British dramas that include

* The Long Firm - a four-part BBC drama on the dark underbelly of Sixties London, featuring Sir Derek Jacobi in a supporting role. * Murder Room - Martin Shaw returns as Commander Adam Dalgliesh, in this PD James tale of a museum where dastardly death has occurred. * England Expects - another BBC drama, about a man whose life spirals out of control, drawing him back to his far right past.

New Prime programming supremo Andrew Shaw has opted for a 2005 schedule which is familiar almost to the point of being predictable, with the HBO Western Deadwood the token cult offering in an otherwise mainstream lineup.

As for Deadwood, it describes itself as "a new drama series that focuses on the birth of an American frontier town and the ruthless power struggle that exists in its lawless boundaries - with unflinching realism, adult themes and wickedly inventive storylines". It ain't for the fainthearted, but did manage 11 Emmy Award nominations (and two actual gongs) in its first season.

Prime already attracts a substantial cumulative audience - 61% of all people 25-54 tuned into the channel at some time during October - but currently has a low average peaktime audience (just 2% of the same demographic). The addition of Holmes, combined with 2005's other new programming initiatives , will see more of that 61% lingering on the channel for longer, improving the average audience and helping fuel Prime's future growth.

It's easy to forget that Prime began just six years ago with a schedule groaning with ancient British reruns. The Prime of today is a worthy destination for viewers, with programming that rivals the other free-to-air networks and a corporate mission that might have seemed presumptuous (if not preposterous) but which is starting to deliver audiences and profits.

Fortuitously, Prime's growth spurt has coincided with an extremely bullish advertising market, allowing the channel to attract more dollars than would normally be allocated by risk-averse television buyers. Bold steps such as the acquisition of Mr Holmes are precisely what Prime needs to remain a player as the market tightens.

Digital Takes Off In The Home Country Digital television in the UK is for the first time being watched by more people than either BBC One or ITV1, according to the British media regulator Ofcom.

The regulator reports that, over the second quarter of 2004, viewing figures for digital exceeded that of the two main terrestrial broadcasters, although it concedes that ITV1 and BBC One still dominate in peak-time viewing.

According to Ofcom, which published its quarterly report into the UK communications market last week, BBC Two has been hardest hit by the growth of digital, with more than half of multichannel homes in the UK spending just 15 minutes a week watching BBC Two in June this year.

The report says that digital television now reaches 55% of homes in the UK, with 400,000 people taking up the Freeview service in the second quarter of the year.

Digital television in New Zealand remains the province of Sky Television, although TVNZ have reportedly been acquiring satellite space which would enable them to offer a free-to-air digital service. Sky's digital penetration is closing on half a million subscribers, and (according to Sky's own analysis of New Zealanders 5+) the combined Sky channels now attract more viewers than TV3, although One and TV2 remain out in front.

Sky's viewing figures are, of course, a combination of their UHF (analogue) and satellite (digital) services; but the UHF component is shrinking with each passing month, as subscribers discover the joy of digital. We suspect that the analogue UHF transmitters will be switched off sometime in the next three or four years, and the frequencies repurposed for digital - unless some other, cooler technology comes along ....

Open House for WSJ.com If you've ever followed a news link to WSJ.com, only to discover that you need to be a subscriber to read the linked story, you'll love this announcement: the Wall Street Journal Online has announced that it will make its website available for free for five days in an attempt to drive subscriptions.

The promotion starts on November 8 (US time: your mileage may vary) and runs until November 12. During this time, you can access all of the site's content, with no subscription nor registration necessary.

Wisely, WSJ.com has signed up a number of companies as sponsors of what it is dubbing its online "open house", so it's not exactly going to be poverty-stricken as a result of inviting over all these non-paying house-guests.

The company first ran a similar promotion back in 1997, when it crossed the 100,000-subscriber mark. WSJ.com now has 701,000 paid subscribers worldwide.

How Not To Blog A blog containing links to a series of online ads for Mazda's new M3 was recently pulled, on the heels of accusations of foul marketing tactics. Mazda USA declined to comment on whether it was responsible for the blog, but many bloggers not affiliated with the company are convinced the controversial blog was, in fact, a promotion for the new car.

The blog, "HalloweenM3," was posted on Google's blog-hosting service, Blogger.com, in mid-October. It was supposedly written by a 22-year-old photo assistant who calls himself Kid Halloween and whose personal profile contained a list of favourite movies that included lengthy car chase scenes. The blog's only two entries both linked to video featuring Mazda M3's commercials.

Following some 500 page views, and widespread criticism, the Kid Halloween blog was removed after about a week.

Kids, don't try this at home.

DVD and Conquer Sky's foray into the "all you can eat DVD" space gathered momentum last week, with announcements of two alliances that see Sky effectively stitching up the NZ Pay Per View market. The first announcement, a liaison with Blockbuster for the supply of DVDs, sees Sky:

* take out its largest potential competitor * tap into Blockbuster's buying power in a chunk of the market Sky don't currently dominate * warn off Video Ezy and United ("the enemy of my friend is my enemy") * potentially tap into a source of even cheaper back-catalogue DVDs * potentially provide a physical drop-off option for the return of DVDs via local Blockbuster stores

Sky's second announcement reveals a linkup with Telecom whereby Xtra helps promote Sky's DVD Unlimited offering, paving the way for a future Sky/Telecom partnership offering downloadable Pay Per View Video once fast broadband is sufficiently pervasive.

Why are Sky doing this? Is the DVD-rental arena a valid line extension of their core business, or simply a distraction?

Actually, it's vitally important to Sky's long-term future. As broadband becomes universal, all types of television product - not just movies - will be delivered via download. If Sky can develop its direct customer database now, and migrate with them to broadband delivery, the company will be ideally placed to supply other programming to those customers as it becomes available.

A pipedream? It's happening now, although without the blessing of the broadcasters. If you're a scifi fan with a geek streak, you can download fresh new episodes of Battlestar Galactica from England, Stargate Atlantis from Canada or Star Trek Enterprise from the USA. No need to wait for your local broadcaster to screen them.

The way around this broadcasters' nightmare? Legal, paid downloads. Music now (see below). Video, five minutes into the future.

Tomorrow's television will not look like today's. Sky gets it.

Finally, it's legal Yesterday, New Zealand finally joined the rest of the world in allowing legal music downloads, with the launch of digiRAMA (www.digirama.co.nz ), the New Zealand-made music site. For the first time, New Zealand music fans can legally download tracks from their favourite artists from major as well as independent labels.

We gave a heads-up on this new arrival back in August. Now it's here. DigiRAMA already has an online catalogue of more than 30,000 songs, priced from $1.99 to $2.49, from the likes of Warner Music, FMR, Global Routes and WildSide Records (with other major labels in the melting pot).

DigiRAMA is a great Kiwi success story. Brothers Shaun and Garth Davis, both of whom work in the computer industry, set up DigiRAMA out of pure frustration. They were looking to buy some music on iTunes, but discovered New Zealand users are blocked from the service.

They started looking at what it would take to create a music site specifically for New Zealanders, talked with a lot of people in the music industry, and painstakingly overcame all the stumbling blocks that had kept legal music downloads in the "too hard" bin.

A quick admission: since we came across the concept, we've been helping to promote the digiRAMA message. So a brief commercial message: legal music downloads make a great gift, especially for those elusive younger demographics. If you're interested in tapping into the power of legal music for your brand, give us a call at 09 914 4939 or by email to newsletter@mediacom.co.nz and let's talk.

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Product Placement Ethics We've mentioned the growing trend towards Product Placement, especially in the USA, as technology threatens to render pure TV advertising irrelevant.

Now the Feds are getting into the act. The Federal Trade Commission (FTC) is wrapping up its review of product placement in the next few weeks, and the Federal Communications Commission is also planning to report soon.

Both US government agencies have the potential to radically alter the mushrooming product placement business. TV networks could be forced to disclose that they or their producers have been paid to integrate commercial interests into programming. The FTC has already showed some muscle in its enforcement of advertising disclosure rules. In 2002, the FTC forced search engines to distinguish between advertising and content results. The FTC has also enforced the labelling of infomercials and advertorials in magazines.

The issue first arose in October 2003, when consumer protection group Commercial Alert lodged a complaint about product placement, demanding that TV networks identify paid placements in their programming with onscreen disclaimers. At the time both the FTC and FCC said they would look into the matter.

The most likely outcome, in our humble opinion: a whole bunch of weasel words added to the credits at the end of an offending programme, identifying (in nearly illegible small print, like medical warnings) the advertisers or products who paid to be included in the programme. Or perhaps just a list of names of those gullible enough to believe the products were included without some sort of payment?

Magazine publishers are also amongst those who struggle with the ethical dilemma of whether to flag the inclusion of products as paid or unpaid promotion. An anonymous correspondent to Marketing Digest questioned the responsibility we have to ensure that the general public does not mistake paid-for advertising with editorial.

Our correspondent noted: "as publishers and broadcasters scramble to address falling audience and readership results, they are increasingly willing to blur the distinction of paid-for mention from editorial. In a lot of cases, the product placement is obvious and acceptable to consumers, who are typically savvier than we give them credit for. Most could probably identify that a major car company has paid to have their car featured as a prize for a reality show contestant, but what about the pseudo-editorial endorsement format of mini-programmes like Zoot Review, Family Health Diary or Brand Power? Or what about sections such as the Special K Triathlon Training supplement that came packaged with She magazine? Are those product placements as obvious, given that they're presented in such a similar format to She's regular editorial features?"

These are valid questions, which will become even more valid in times to come, as advertisers urgently increase their efforts to overcome being tuned out by ad-avoiding consumers. We don't think there are any easy answers, however. What strikes some as irresponsible is likely to be lauded as stealth marketing by others.

Is this a question of absolute right or wrong? Or are we talking relative ethics: How would your child, wife, husband or major shareholders react to the revelation that you were behind Example X?

Your feedback welcome.

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