Home Video, Audio Equipment Offers New Marketing Channel

By Willax, Paul A. | American Banker, March 5, 1986 | Go to article overview

Home Video, Audio Equipment Offers New Marketing Channel


Willax, Paul A., American Banker


Home Video, Audio Equipment Offers New Marketing Channel A COUPLE OF YEARS AGO, A top executive of the J. Walter Thompson Co. observed that "marketing has been one of the last disciplines to be affected by the new technologies." Unfortunately, evidence is mounting in the living rooms of America that substantiates this sweeping assertion.

By and large, marketing directors have been slow to capitalize on the benefits of a major new marketing channel that has "turned on" the nation's marketplaces during the past 10 years. While many self-proclaimed high-tech "pioneers" were pondering the probable impacts of cable television and personal computers on American life, the Japanese were busy (as usual) manufacturing, shipping, and selling little electronic boxes that promise to surpass by far the power of MTV and Apple II in influencing the fundamental ways in which our society is entertained and educated -- and in which it is sold goods and services.

In a recent cover story, Newsweek proclaimed this "The Age of Video" and convincingly made the point that "the taped medium is the message" because "video has become our teacher, seller, and storyteller."

The magazine, like most present-day social commentators, attributes the dawning of this new era to the "video cassette recorder," the "little electronic box."

Today, almost one-third of U.S. households own one of these contraptions and use them for everything: "time-shifting" their favorite television programs, watching prerecorded tapes on a wide spectrum of programming ranging from Disney to Dr. Ruth, replaying home-recorded tapes of traditional family festivals such as weddings, bar mitzvahs, and throwing the ball to Spot.

Many other viewers use the VCR simply to watch regular TV programming fare but rely on the fast-forward button and playback gadgetry to eliminate commercial intrusions. (Experts estimate that one-fifth to one-quarter of all viewers today are confirmed commercial "zappers.")

Despite the fact that the marketing pros in the electronics industry have used high-powered sales techniques in introducing and expanding the presence of this incredible machine, the marketing professionals in other industries have been noticeably negligent in the exploitation of the new sales channel that this equipment represents.

While a rapidly growing number of firms are using this technology to inform and train their employees, very few enterprises have harnessed the power of this communications link to sell goods and services to their target consumers.

98% of Homes to Have VCRs by 1990

Certainly, they cannot be waiting for proof that these little busy boxes are here to stay. Over 12 million of them were sold in 1985, and even the most conservative prognosticators agree that they will achieve a 98% household penetration by 1990. The acceptance rate for this new technology is astounding when one considers that color television had attained only a 41% penetration by 1970.

Unfortunately, communication via tape has suffered a history of neglect and underutilization. Although the audio tape-recording process proved itself in the early 1930s, it took another 10 years and Herman Goering of Germany to put it to use.

In the United States, the late crooner Bing Crosby had the original rights to audio tape after World War II, but the NBC network refused to let him use it, prompting his move to ABC, a rival network. Video recording made its debut in 1956.

It was not until 1976, however, that Sony introduced Betamax, the first commercially practical, in-home VCR device. Given history, it is not surprising that the VCR has been relegated to back-seat status as a marketing channel while the movers and shakers experimented with cable and personal computers to find more effective ways to bring product and service information into the homes of American consumers.

Alas, the mini-computer boom has lost much of its steam, and economics and politics have slowed the wiring of the nation to a point where the cable industry would welcome a 60% penetration rate by 1990. …

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