Marketing Services: Satellite TV

By Syedain, Hashi; Miles, Louella | Marketing, August 26, 1993 | Go to article overview

Marketing Services: Satellite TV


Syedain, Hashi, Miles, Louella, Marketing


Satellite TV is working hard to shrug off a downmarket image. As more new stations launch, the industry wants to persuade advertisers that quantity will not diminish quality.

The gap between perception and reality -- a question which has occupied poets and philosophers throughout the centuries--is now vexing the minds of the satellite television industry.

The problem is this: advertisers (and many potential viewers) see satellite television as a downmarket product. The reality, claims the industry, is that the audience profile is more upmarket than that of ITV, and satellite can offer a choice and quality unmatched by terrestrial.

This is the theme that the satellite industry is now peddling to advertisers as it enters the next phase of its development. Dish penetration and audience figures, while still tremendously important, are no longer the be-all and end-all of satellite sales.

To a certain extent that argument has been won, even though there may be a host of different estimates around about exactly how many dishes there are and the likely impact of Sky's new multi-channel subscription package both on current ownership and on future dish sales.

As of September 1, Sky One, and a variety of other stations which have hitherto been free, will only be available as part of a package costing 6.99 [pounds] a month (or 3.99 [pounds] on special offer).

Sky claims an excellent take-up among existing dish owners although, typically, it refuses to quantify the response. Media buyers, meanwhile, broadly concede that the long-term effect will be minimal.

"Some people may drop out of the market. Perhaps it might have been better if Sky had waited until after the recession," says Phil Gullen, head of research at TMD Carat, "but it's better to do it now than it would have been to do it a year ago."

Current estimates put satellite penetration at somewhere between 2.3 million and 2.8 million homes. More significantly, even the most pessimistic estimates put the availability of satellite at over 40% by the end of the decade, a level of penetration that is impossible to ignore.

So with the argument on numbers reduced to when critical mass sets in, rather than whether, the industry's focus is now switching to quality and niche targeting of audiences.

New stations are launching. At the end of last year UK Gold came on air, exploiting the extensive libraries of classic programming from two of its shareholders, Thames Television and the BBC.

The Discovery Channel, devoted entirely to documentaries and factual programming, has moved from cable to satellite, as has Bravo, a US-based Gold format, showing classic American movies and shows.

Then, in just under a week, a further tranche of stations comes on air to coincide with the launch of Sky's multichannel package. These include the much trumpeted children's channel Nickelodeon (see panel) and another US import, the Family Channel. On top of that, CNN parent Turner is bringing The Cartoon Network to the UK, again aimed at children. More launches from a host of different operators have been announced for later this year.

From a situation where satellite television was synonymous with Sky, there will son be a plethora of stations, belonging to different multinationals, all vying for viewer attention.

Critics of satellite have always argued that increased quantity will only come at the expense of quality. But the satellite operators are fighting back.

Most belong to multinational groups with interests in several world markets, and are thus in a position to devote increasingly large resources to both new production and buying up existing programming.

Alan Bryson, an ITV defector, now UK sales director of The Family Channel, points to his station's poaching of The Wonder Years from Channel 4. The programme is made by an independent producer and has been enormously successful.

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