Retailers look at a televised future

Speculation that Sainsbury’s may launch a TV channel indicates that retailers are serious about Britain’s future 300 digital channels.

One remote-controlled flick through the current array of television channels shows it is already hard enough to fill them with decent programmes. So when the full range of up to 300 new digital channels comes on air by the end of next year, the search will be on for new and interesting ways to fill the thousands of extra TV hours created.

When digital TV takes off, ownership of a television station will no longer be the preserve of global media barons or state-sanctioned monopolies. Brand owners and retailers are also expected to look at launching their own “brand TV” and “retailer TV” channels.

Digital TV could make this possible by driving down the cost of setting up a TV station – one observer claims a digital TV channel could be franchised for 40,000, although the low hundred thousands seems a more reasonable estimate.

Industry sources say a number of retailers are already looking into this, and one believes there are plans for a retailer, Sainsbury’s, to launch a channel by the end of this year.

Some brands have already made moves into TV production, such as the National Magazine Company’s foray into “masthead programming”. After relaxation of Independent Television Commission guidelines on cross-media ownership earlier this year, NatMags launched the Zest Beauty Show fronted by Julia Carling on the Granada/BSkyB joint venture channel Granada Good Life. There is also the move into television production by Procter & Gamble, which produces Northern Exposure. Trebor Bassett launched an animated Jelly Babies cartoon series last year.

This extension of brand to TV programme points the way for retailers and brand owners to produce their own lifestyle programmes, and ultimately to launch their own channels.

Brand channels could follow the format of the lifestyle magazines, which have been successful for the supermarkets. Sources suggest that Sainsbury’s is considering following this route launching a “lifestyle channel” promoting itself and, possibly, its products. However, it would enter a minefield of ITC regulations, which forbid overt use of branding in television editorial.

The ITC says brand owners could run a station, but may not be allowed to plaster their names all over it. They couldn’t promote their brands through editorial coverage. Rules are rules, but ITC rules have to keep up with developments in broadcasting. When there are 300 digital channels on offer the ITC will be under pressure to relax restrictions on brand owners supporting programmes and stations. If not, it may be hard to fill all of the TV hours.

Just what “retailer TV” could look like is anyone’s guess. A soap opera called “Stamford Street” on Sainsbury’s TV? Lessons in putting up shelves from B&Q Broadcasting? Product news flashes?

Given the expense of running programming throughout the day, retailers may choose to run the channel for only a few hours each day. They could even share time on a combined retailers’ channel. Maybe in a deregulated future a supermarket channel could run for two hours in the morning, with live presenters telling shoppers about special offers and new services offered. This could be combined with “lifestyle” coverage of everything from cooking tips to environmental news.

For retailers, it would be one further step in the quest to target their customers more precisely. Bill Faust, head of interactive at media company CIA, says: “Supermarkets are in the best position with their loyalty schemes and the amount of information they gather from store cards.” They could select high-spending customers from the information they store on their loyalty cards and encourage them to watch the channel. The channel could be supplied only to loyal shoppers. The supermarkets could offer loyalty tie-ins with the channel through competitions and special offers. It would move customer targeting to new levels of focus, and move the retailers significantly nearer their consumers.

The first step retailers and brand owners will take is to test the possibilities of interactive home shopping. Digital TV enables viewers to respond to what they see, as the signal has a return path down which they can send their responses. British Interactive Broadcasting, set up by BSkyB, is already looking at ways to exploit this and has teamed up with HMV, Great Universal Stores and Sainsbury’s.

Viewers will simply press the interactive button on their remote control to draw up a list of services, such as shopping, banking, holidays and travel. They can then choose from a range of services within a particular category. They will be able to order goods for home delivery, or undertake any of the activities for which they usually have to get off their sofas and head for the high street. This could provide a dry run for retailers to develop their own interactive services, and build them into their lifestyle channels.

The development of “brand TV” could provide an alternative to scattergun television advertising, and is attractive to retailers and brand owners for its ability to focus closely on consumers. Some supermarkets shell out over 20m a year on television advertising. But they recognise that there could be more efficient ways of spending their money – Tesco forsook TV advertising in the run up to Christmas 1996 in favour of a direct marketing campaign on the back of the Clubcard loyalty scheme. In the modern retail environment, targeting is everything. Retailers may find themselves hamstrung by regulations, though with care they could work around them.

Supermarkets have conquered many other areas of commerce, from food to clothes and pharmaceuticals, and from petrol to financial services. Television could well be their next target.

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