Torin Douglas: Thomas Cook writes its brand across the Sky

Last week, beleaguered Granada Television announced it was closing the Wellbeing TV channel, its ailing joint venture with Boots. A few months earlier, the equally beleaguered Carlton TV pulled the plug on the Taste channel, its equally ailing joint venture with Sainsbury’s.

So you may be surprised to discover that next week Thomas Cook is launching its own TV channel on Sky Digital. Can it be serious? Not only have two of the UK’s biggest retailers just demonstrated the perils of getting into the television industry – particularly during an advertising slump – but of all the commercial sectors that have suffered since the events of September 11, the travel business has been hit hardest. Even if Thomas Cook’s channel made commercial sense on September 10, can it still be such a good idea?

Katherine Gershon, head of Thomas Cook TV, says the company obviously had second thoughts after the attacks on the US: “We looked at it again very seriously, but we’re convinced it’s the right thing to do. It will be an extremely important sales and marketing tool for us and we’re pleased to be the first company in Europe to launch a satellite channel under its own brand.”

Wellbeing and Taste, of course, were not “branded”: they hid their involvement with Boots and Sainsbury’s under a bushel. That was their biggest mistake, according to Mark Cullen and Adrian Swift, founders of Enteraction TV, which has pioneered the concept of “branded” television. Enteraction launched TV Jobshop and has developed Thomas Cook’s channel.

Cullen says: “I think the Boots channel will make a business school case study on how not to do it. It had an unrealistic business plan, almost entirely dependent on advertising. The channel had more than 100 production staff and it wasn’t called Boots, despite that being the best-known high street name in healthcare.”

By contrast, Thomas Cook will be trading on its name for all it’s worth. Gershon says: “Brands are assets, they’re trusted and known. People say ‘good old Thomas Cook’ and know that if something goes wrong they can come to one of our 700 high street outlets. And they trust us to be honest and tell them the truth about resorts and accommodation.”

Technically, under its licence from the ITC, Thomas Cook TV is a shopping channel, designed specifically to sell holidays. That is something that television has already shown it can do very well. Industry estimates suggest that TV Travel Shop – launched three years ago by holiday entrepreneur Harry Goodman – and its rival, Travel Deals Direct, already account for about three per cent of the packaged holiday business. That’s three times the share achieved by the much-hyped Web.

There’s another crucial difference between the Thomas Cook channel and the Sainsbury’s and Boots ventures – the production costs. Compared with the major TV channels, Taste and Wellbeing may have been low-budget operations, but they were set up on the back of conventional TV channels, with many of the costs that entails. Their budgets were &£40m to &£50m a year. By contrast, Enteraction has set up the Thomas Cook channel for about &£3m, and its annual running costs are likely to be between &£5m and &£6m. Instead of 100 staff, it has about 40. Yet it will be broadcasting 24 hours a day, seven days a week, with scarcely a repeat.

So does it look cheap and nasty? Not on the basis of the programmes I’ve seen. Enteraction has made sure the budget gets on to the screen, not behind the scenes. The studio set looks expensive – it could be a hotel foyer somewhere sunny, with a pool in the background. Yet it’s actually computer-generated. Not only does that mean a huge direct saving on materials and building costs, but the “virtual” set can be turned on and off at a touch on the keyboard, saving time and manpower in putting it up and taking it down again. That means Enteraction can use the physical studio round the clock, when they launch other branded channels.

Thomas Cook and Enteraction also use their shooting time effectively. So far they’ve notched up 27 location trips, with a two-person crew – camera and producer. They don’t take presenters on location, claiming not only that it would be more expensive but, more importantly, that it would date footage and restrict its use. If they film in Mallorca for three weeks, they can use the material in a variety of ways – from a whole feature on the island to clips that can be used in other programmes, focusing on particular types of holiday. The footage also provides Thomas Cook with an archive of all the destinations and hotels it offers, to be used in other ways.

The big difference, though, is that while Taste and Wellbeing hoped to pay their way through ads and sponsorship, Thomas Cook TV is there to sell – directing viewers to the call centre, the Web or the high street shops. Gershon and Cullen say it will be much less of a hard sell than the existing travel channels, with the feel of mainstream programmes such as Holiday and Wish You Were Here.

Will people watch? The channel will be heavily promoted in Thomas Cook shops (again, unlike the Taste and Wellbeing model) and Gershon thinks its material makes it a natural success. She says: “What better escape from the cold winter than pictures of beautiful beaches and exotic locations?” The more important question – and one on which the future of such branded channels will depend – is will they buy?

Torin Douglas is media correspondent for BBC News