Digging for victory

It is make or break time for the cable industry. Hit by huge consumer ignorance, bad publicity and a high turnover of subscribers, the major players have been forced to drop their rivalries and launch a 12m campaign to change public opinion.

After years of talk and months in the planning, the cable industry’s first concerted marketing push launches next week (March 25). The 12m national advertising campaign, created by J Walter Thompson and featuring Dawn French, will be boosted by the launch of a generic branding marque created by Sampson Tyrrell.

It has come just in time.

In recent months, City doubts have hit cable shares hard. Sluggish penetration growth and only slowly improving “churn” rates have forced many to re-evaluate the business. Yet the cable industry insists that with 1.7 million UK cable homes connected it has only now achieved the critical mass necessary for national marketing. But political infighting and competing vested interests have had to be put on hold to create this campaign.

In the words of one cable source: “Our future fortunes are riding on the JWT campaign.” The reason is simple – cable’s public image is still saddled with the perception that it is either a reason for inconvenient holes in the street, or an empty promise – lots of new TV channels which we don’t really need.

Even among cable subscribers there is significant ignorance. It is seen by some as offering little more than sports TV for the boys. And recent research conducted for industry trade body the Cable Communications Association shows people unsure whether they can receive Sky channels via cable (they can), whether cable requires a dish (it doesn’t) and whether cable telephony allows them to call friends and relatives with BT phones (it does).

Until now, cable operators have concentrated investment in laying cable rather than perfecting marketing. Over 5.5bn has been spent in the past 11 years, covering more than 30 per cent of the UK. “With cable now available to one-third of all UK TV homes – with a further third due to get cable over the next two years – only now is the time right for national marketing,” says Mike Hayes, marketing director at the CCA, who has co-ordinated the national push.

Twelve of the UK’s leading cable operators – representing 94 per cent of UK cable TV homes – are funding the initiative. Each will invest extra money locally in regional campaigns to support the national drive. The CCA estimates the UK cable market is worth an annual 750m in customer revenues – representing on average 23 per month per cable TV home.

The industry must act now to address a number of issues to encourage more people to get connected and reduce the number not renewing their subscriptions – otherwise known as “churn”, which is running at between 20 and 30 per cent.

To encourage more people to subscribe, it must articulate cable’s benefits – not just for cable TV but for telephony and future interactive and new media services not yet available.

“All people tend to see of cable is digging in the street,” admits Hayes. “No one questions this when it’s BT or the local electricity company. But they do with cable. We must change this. And we can do so through a clear understanding of what cable and its benefits are.”

Fewer than 30 per cent of people realise cable companies offer telephone lines and more competitive rates than BT. However, telephony is a particular growth area among business users – 150,000 business phone lines are now in use and 70 per cent of cable subscribers take both TV and phone services.

The JWT campaign has three aims. To build awareness, position cable as the one connection to make more of your TV, phone and, eventually, personal computer and provide a clearer identity for a disparate industry. “It must also add a perceived value to the cable proposition,” says Hayes. “We must make people want it.”

The need for a corporate identity becomes clear when you consider the diverse nature of an industry comprising 120 local cable franchises controlled by a dozen operators, each distributing numerous channels containing hundreds of individual TV programme “brands”.

The campaign consists of 60, 30 and ten-second TV commercials fronted by Dawn French – chosen for her mass appeal, particularly among women who are regarded by the industry as the “brakes” on possible cable purchase, compared with men (the “accelerators”) and children (the “gears”).

In each, French wields a giant cable, citing the benefits before declaring the campaign strapline: “You don’t know what you’re missing! Get Connected.”

A national press and poster campaign takes the message further by detailing specific services – including telephony, Internet access and future interactive media.

Each participating cable operator will feature the new cable corporate logo in all printed communications to underline the consistency of the message. The logo works in a similar way to Visa and Mastercard where the service provider is your bank and the product is Visa.

The push also has the support of programme suppliers who will invest extra money and take part in joint promotions. So, the first burst of advertising will feature 15 programmes – including Sky channels and cable-exclusive fare.

“We were keen to avoid the ‘cable equals TV choice’ route. Although it certainly does offer more to choose from, the point is it allows you the programmes you want to watch, when you want to watch them,” says Hayes.

Despite the obvious appeal of multi-channel TV, volume isn’t everything. Research shows people do not watch more TV when they get more channels. The campaign adopts a “tune-in” strategy, detailing specific shows available on cable and when they can be seen. “It’s not a question of encouraging them to watch more. They won’t. It’s about improving satisfaction.”

The campaign targets anyone with a TV and a telephone. However, with ads running on terrestrial channels and not Sky, it focuses only on the 18 million homes without multi-channel TV. “Our initiative is in no way a dig at dishes,” says Hayes. “Our success helps their business, and vice versa.”

Cable operators involved hail the initiative a major achievement. And it is. Never before have rival cable companies come together with the industry’s channel providers to work for a single cause. “This is a significant move for cable,” says Jeff Henry, executive director of marketing at cable company Nynex. “It is a generic message we all share,” adds Alan Michels, chief executive of Telewest.

Despite previous differences between the top players, all now realise they must work together to build the cable business. Although the national budget is more than 12m, almost the same amount of money again will be invested in local, grassroots marketing campaigns, predicts Michels. “Already, we are beginning to see progress: rather than pushing people in, we’re pulling in customers.”

Obviously there is more to it than just marketing. Improving sales is a priority – already, the emphasis is moving from door-to-door to telemarketing. Some operators are also now moving onto the high street.

Another area of development is programming. Cable-exclusive fare is now associated by many with the Live TV News Bunny – crass and tacky. Plans to launch further cable-exclusive services – notably sports – were hit last autumn by programming deals struck with BSkyB by Telewest and Nynex. The contracts included a clause stopping the cable companies from launching competing services. Sky’s programme deals are now being investigated by the Office of Fair Trading.

However, Michels adds: “Further cable-exclusive services will be developed,” although only where the market can support them. “If that means dropping channels that don’t perform, than so be it. But at the same time, major players like Disney and Carlton are moving in.”

He predicts closer co-operation between ITV and the cable operators. A Granada-Sky coupling promises Granada Sky Broadcasting and eight themed satellite channels launching in October. Attention is now on Carlton which recently acquired cable entertainment channel SelecTV. “(ITV companies) have the content, we have the capacity. We offer an alternative means of distribution and they acknowledge that.”

Nynex, the UK’s second largest operator which suffered pre-tax losses of 90.2m in 1995, has become the chief acquisition target. Both Telewest and Bell Cablemedia have been linked with possible deals. Last month Videotron, the seventh biggest, was put up for sale by its Canadian parent.

“Undoubtedly, there’s going to be consolidation in the cable market,” says Michels. “Eventually, we will see the two infrastructures – cable and BT – sitting comfortably side by side.”

Against all of this, the CCA marketing campaign must raise awareness, drive subscriptions and reduce churn. Its success will be gauged against performance targets, although the CCA is refusing to reveal exact details.

At issue is changing perceptions, and already this has begun internally. “We are a new type of retail outlet,” claims Hayes. “Our task is to attract traffic by highlighting the features – and brands – people want.”

Dawn French now has to persuade the wider public.

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