Spin-offs prepare for starring role

In a desperate attempt to find alternative sources of income, media owners are reassessing the commercial potential of their editorial brands.

Faced with declining audiences and falling share of the advertising cake, media marketers from Andy Barnes at Channel 4 to Stephen Palmer at The Guardian are busy working on briefs to generate non-advertising income.

Six months ago, Laser Sales appointed Gary Knight to run the new Commercial Enterprise Unit. The unit includes advertiser-supplied programming, non-spot licensing, and merchandising sponsorship. So far he has launched Coronation Street Easter eggs with Cadbury and signed a deal with the International Football Hall of Fame, an attraction based in Manchester with a Website, TV, press, video and book publishing spin-offs.

CEU straddles Laser’s airtime sales operation and the Granada Group. It is intended to tap into Granada and LWT’s rich programme library to generate extra income. It also links programming and sales and wider areas of the Granada empire. CEU is able to use Granada hotels , service stations and TV rental shops as distribution vehicles for merchandise.

The proposition involves developing a list of preferred clients, which Knight says will include two or three of the top UK advertisers and five others. Clients who get preferred customer status will be able to acquire information about programmes and products before rivals.

The move may be seen as a way of gaining spot money ahead of rival sales houses. It could also be taken as an attempt to protect business from clients who might be tempted to knock Laser stations off the schedule. And the more cynical may see it as a way of bypassing agency media planners and buyers by going directly to the clients.

One senior agency source says: “It is a way of getting the clients to make the media decision over and above the agency,” he says. “The idea is to tie advertisers deeper into the TV companies.”

Knight believes ad agencies have little idea of the importance of off-air promotions and merchandising licences which have been left to sponsorship specialists and PR firms.

However, Knight says this is part of a deeper cultural change at Laser. The sales house for Granada, LWT, Yorkshire Tyne Tees and Border is starting to treat prime programme products as brands. “My team is no longer concerned with just above-the-line properties or indeed a massive blitz to exploit below-the-line positions. We have business plans for each of them,” he says.

But to what extent can media owners offer clients a one-stop shop for their brand needs? And how strong are programme brands?

The new “holistic” branding approach to TV airtime sales may fit well with the onset of digital television where greater interaction with consumers and retailer-owned channels are possible. TV stations are adjusting to a new environment where they are themselves retailers.

Branding consultants believe there are other potential areas for exploitation. Quadrant Consultants says despite Granada’s own distribution channels, the ideal clients would be, for instance, Direct Line or Sainsbury’s where the product licensee owns the channel of distribution and can deliver market penetration.

Interbrand director of strategy Pamela Robertson says the merchandising would have to be long-term rather than a one-off promotion for something such as Coronation Street’s Easter eggs.

Quadrant says the ideal TV programmes have year-round visibility, as in the US. Peter Hayes, joint managing director of Quadrant, says viewers will have invested in a relationship with the show. It would be part of their lifestyles. Seasonal shows would need more support.

Interbrand’s Robertson agrees soap operas, breakfast and news programmes are long-running. “But you have to be careful,” she says. “The most important element of branding is that the programme is distinctive – news programmes are not distinctive.

“The question is, does TV have sufficiently distinctive brands in the market to exploit itself fully?”

Genre is also an issue. Entertainment would work better than factual news or documentary programmes. But too many game shows are distinguished only by the presenters. Jonathan Hall, marketing consultant at CLK, says many programmes are too personality-focused.

There are still many obstacles to full development. The ITC says that programmes would only be able to promote programme-related material such as books or videos. Consequently, the chances of promoting Blind Date chocolates on TV are remote. And there is the further problem of ownership and syndication rights – many rights to game show and comedy programmes are owned by third and, in some cases, fourth parties.

Despite this, by next year Knight hopes to be making as much as 7m from this new revenue source.

However, the biggest barrier is cultural. Many UK programmes are conceived without commercial consideration of potential commercial spin-offs. In the US, children’s programmes are created with the merchandising spin-offs as a central element, not an afterthought.

Ironically, the UK television company which is most clued up about spinning off and merchandising its brands is the BBC. It launched its range of Teletubbies merchandise backed by a 3m ad campaign through Frontline. Unfortunately for UK advertisers, they have as much chance of getting involved with the hit series as

Tinky Winky has of getting his old job back.