Some of the UK’s top brand companies are lining up to sell their products through Brit-ish Interactive Broadcasting, the UK’s first digital home shopping service which will launch late next year.
But they will have to persuade Chris Townsend, BIB’s marketing director, that they have the technology to become partners in this new age of TV home shopping.
From BIB’s inception back in May this year, the company has had interest from a range of companies including HMV, Sainsbury’s, and Great Universal Stores. Marketing Week can reveal that Townsend has also had discussions with other companies including Freemans, Tesco, Air Miles and Comet.
BIB will be one of the main suppliers of digital content in the UK. The company is a joint venture comprising BSkyB, Midland Bank, BT, and Japanese electronics conglomerate Matsushita. BIB predicts that its services will be available in 8 million of the country’s 22 million TV homes by 2008.
The idea will bring a range of branded 24-hour shopping channels directly into the home through Sky TV’s relaunched digital package. It will allow customers to see goods demonstrated and then go online and buy directly from the screen. The system will also allow customers to book holidays, play games, look for a car or settle bills.
However, Townsend says: “We have been approached by a lot of companies wanting to get involved. We are in a position to choose which ones we will work with.” A major factor in that decision is which of these companies have the most suitable digital infrastructure to fit with the BIB system.
BIB expects to sign contracts with an initial tranche of between 25 and 30 companies over November and December this year. The first interactive ads will appear on digital satellite next summer, while the first stations are expected to appear in October.
However, one senior agency source thinks that a BIB summer launch date is too optimistic. “They will never get it off the ground in time. They have only just established a standard platform for the system. Most retailers’ technology is way behind them. BIB will also have a huge marketing job convincing people to buy another box for about 200.”
In the digital age we are told that information moves faster, a theory which may also apply to marketing directors, because Townsend says in the past three months he has given presentations to 100 companies. “And I have seen virtually all of them a second time,” he says.
Townsend adds: “Retailers are used either to buying ads or a shop space. What I am asking them to buy is bandwidth on a satellite. This is not an evolution, it’s a revolution.”
Ian Cheshire, the group marketing director for Sears (which owns the Freemans catalogue), has been looking at this medium for the past two years. He says: “The Internet is just not a mass-market medium now. BIB is the first mass-market commercial venture with serious backing that has been attempted in this country.
“Getting involved in this project is a question of when, rather than if. However, we don’t think we will see any return on investment in the first three years.”
BIB is understood to be asking companies to pay an annual figure of about 500,000 to get onto the system. Mail order companies or banks, which either have a lot of experience in home selling or particularly low overheads, estimate it will cost them a further 500,000 a year to run. Companies which will have to start from scratch are looking at running costs of up to 2m a year.
But the head of strategy at one top-ten agency thinks this could be a lot more expensive than current predictions suggest. “Take grocers,” he says. “They are going to have to start home-delivery services from scratch. They will have to keep perishable food chilled in small vans rather than large trucks. And if they deliver to an upmarket clientele they will have to work in the evenings. This is just one area that will cost money.
“There is a lot of nonsense talked about this. Financial services should do well because the success of cashpoints has shown that people do not need to go into a bank very often. But why would I want to watch a channel about Dixons?”
Andrew Warmsley, head of digital media at advertising agency Bartle Bogle Hegarty, says: “The Internet is an important bridge here. A lot of companies are working on Web projects as a way of getting into digital TV. It gets companies used to new technologies, as well as giving them experience of conducting two-way relationships with their customers.”
BIB is also getting its brand-building operation together. It has an undisclosed shortlist of three brand development agencies which will help to construct a company identity, including choosing a new name for the organisation. The company has also had a trio of TV design agencies on a shortlist to help develop a screen identity for the company. Townsend is leading the search for these agencies and expects to make appointments next month. He will not begin the search for an advertising agency until the new year.
The next few months is likely to be a frenetic time as companies jockey for position to be first on BIB’s network. Yet media agencies believe companies must expect to sustain three or four years of losses before their digital dreams come true and they turn their investments into profit.
Torin Douglas, page 19