Slowly heading sky-wards

Freeview’s launch of a PVR brings its service offering closer to Sky’s, and with nearly a fifth of UK TV’s in its pocket, it’s becoming a force to reckon with.

Freeview invades BSkyB terrain this week with the launch of a personal video recorder (PVR). The move signals a new stage in the battle for subscribers with BSkyB, which earlier this week lost its head marketer Jon Florsheim to utility maintenance service provider Homeserve.

Since launching in October 2002, Freeview has concentrated on offering a vastly extended range of television stations to analogue households accustomed to only five channels. All this comes at little extra cost: a cheap set-top box and possibly an aerial upgrade.

Meanwhile, Sky has been busy adding functionality. Its Sky Plus personal video recorder – portrayed by some as the future of TV, allowing viewers to easily record and access programmes on a hard disk – has been taken up in 1.6 million homes, and Sky is rapidly launching new services such as high-definition TV (HDTV).

According to Ofcom, 6.4 million homes use Freeview boxes on primary sets, while another 5 million home use Freeview on secondary sets. That’s nearly one-fifth of the UK’s 60 million TV sets. This compares to Sky’s 7.7 million subscribers and the 1 million of these who have the multi-room package (Sky figures, June 2006).

Innovations from Sky, along with growing uncertainty about how TV will be delivered in the broadband future, raise questions about Freeview’s growth. Sky’s supporters believe the free service could soon hit the buffers as people wake up to its limitations. Once tempted into Sky’s garden of delights – though pricey at over £50 a month – they will be reluctant to leave, according to backers of the Rupert Murdoch-controlled company. Hence, having an effective PVR is vital to Freeview’s future.

Much will depend on the ease of use of Freeview’s PVR, says Richard Huntington, planning director of United London, Sky’s advertising agency. But he doubts it will be as effortless as Sky’s: “My gut feeling is that digital terrestrial television is intermediate technology that won’t be around in 20 years’ time. Let’s see how good Freeview’s electronic guide is to use. Customers will feel like they are getting left behind.” He points out that Freeview lacks the spectrum to offer much in the way of HDTV, which Sky launched this year.

With the imminent launch of BT Vision and other TV services over the internet, Freeview’s technology could quickly look as quaint and outdated as black and white TV does today. An opposing view is that Freeview is becoming the pre-eminent delivery system and will be so for some time to come. “It’s for people who don’t want to feel that terrible spectre of giving all your money to Rupert Murdoch and him taking over your life,” says Media Planning Group head of broadcast Jim McDonald.

A thriving Freeview is good news for advertisers as well, since subscription services care less about advertisers’ interests than the free-to-air broadcasters who rely exclusively on their revenue. Smaller stations complain that Freeview is too expensive and that it has become a playground for the main channels.

At launch, the so-called “public service broadcasters” (BBC, ITV, Channel 4 and Five) were originally gifted Freeview. Since then there has been competition for capacity, which has grown through digital compression technology. As Five sales director Kelly Williams says: “It has become valuable real estate as people realised it would become a dominant platform.”

Williams says the 7 million remaining analogue homes have avoided becoming pay-TV customers for the past 15 years, so are unlikely to want to start paying now. Freeview is the logical choice. “The reach of channels that are pay-only is not going to grow over the next few years,” he says, adding: “Sky is slowing down its growth and cable hasn’t grown over the past year.”

This week sees another defining moment for Freeview as it launches its first paid-for TV advertising campaign called “Free TV Land”. It will be tested in the Granada region – one of the first where analogue will be switched off – and aims to promote the “emotional” benefits rather than the functional benefit of low cost.

Freeview head of strategic marketing Liz Reynolds explains: “In the context of switch-over, with an increasing number of platforms, we want to cut through with something emotionally engaging.” She adds that people who still haven’t gone digital “are generally older and more down-market”.

But a big problem for the marketing of Freeview is establishing whether it is a brand, a service, a platform or simply a technology. Reynolds insists it is a brand: “Like soap powder or shower gel, it is something people have an emotional relationship with.”

She declines to elaborate on details of the Freeview PVR, but it is understood it will allow viewers to quickly skip through ads. While advertisers may hope Freeview becomes the dominant delivery system, its PVR is one development they will not welcome. •With the pressure on companies’ time and financial resources stronger than ever, most firms quite rightly concentrate their investment on key brands. These are the brands that provide the majority of their business and anticipated growth, have strong franchises, can be extended globally though “brand migration” programmes and respond to innovation and brand extension.

Yet what about the also-rans, the brands that don’t fit into the company’s carefully worked-out corporate strategy and yet can’t be dismissed as the runts of the litter? Every marketing director comes across them some time: the latent brands, often caught between the core and the cold, that have potential but don’t look strong enough to justify the time, ideas and resources they would need for a full relaunch.

They are neither stars nor dogs. They are the brands in no man’s land, often well established, selling OK, with decent margins, strong trade and consumer franchises, but unlikely to make great progress. They may not be central to a company or a sector; they may be me-too brands, local or perhaps just too mature.

We believe there could be as many as 3,000 of these secondary entities, which are able to maintain their place in the Championship but have little or no chance of reaching the Premier League. Since they are not performing badly enough to be sold or closed down right away they end up being neglected, run for cash or just run down.

As companies rationalise their portfolios they often underestimate the strategic potential of certain brands on their books and find they do not have the financial resources to investigate that potential. They realise they do not have the resources to deal with the agencies or consultancies involved in the traditional advertising and marketing model. So these brands are left on cruise control or sold for a lower price than could have been achieved by identifying their true worth.

Yet managing decline is not the only possible strategy. Clearly there are boundaries and constraints – they are not going to get the five-year, multi-million pound relaunch plan with lengthy development, roll-out programmes and a three-stage, comprehensive mixed-media schedule.

But that doesn’t mean they should all be neglected. Rather like refurbishing a house, brand revival doesn’t have to cost a fortune if you have people who know what they are doing. A brand can be re-energised, repositioned and re-engineered within existing budgets if the people involved are focused on that project and not plagued by the day-to-day distractions that beset brand and marketing managers.

Increasingly, consultancies like ourselves at StarChamber are focusing on the strategic opportunities and challenges offered by these brands, and are re-engineering to provide the all-round branding services required, in terms of brand strategy, research, innovation, design and marketing communicationsFresh business and brand thinking plus total immersion in the project will produce lateral, innovative solutions. It is a matter of providing the same focus and care that companies give to their core brands but, almost by definition, never devote to those products lower down the hierarchy.

Obviously cost and time are key factors when dealing with brands whose growth prospects are, by definition, limited. So it is essential to use people with experience and talent who can provide radical risk management and momentum within a cost-effective budget. Similarly, discerning consultancies will have the knowledge and expertise to tell the client if the brand is beyond repair.

These limbo brands aren’t limited to one type or size of company. They are lurking everywhere, in global conglomerates and mid-market firms with half a dozen brands and turnover under £100m.

Brand health checks and remedial action are often speedy and cost-effective.

There was a commodity product – a staple food with massive turnover but no brand value to speak of – that became known and valued by the customer and so emerged with a much healthier platform for the future. Or the DIY brand which was redefined to move on to more innovative and profitable products within the sector.

In all these cases the commitment, innovation and lateral thinking provided completely liberated the brands strategically and turned them around. How many other ghost brands are there that would still be alive today if they had received similar care and attention? •Mary Say is a director of StarChamberUK digital TV market Households with Freeview on a primary set 6.4 million Secondary sets used to watch Freeview 5 million Satellite homes 8.4 million BSkyB subscriptions 7.7 million Cable subscriptions 3.3 million Analogue homes (estimate) 7.1 million


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