Sky's up for it
|Mark Anderson tells Michael Cullen why Sky’s subscribers can “believe in better”|
Making money these days is difficult for many businesses. City analysts have seen Sky as one of those stocks where it’s a win-win. When times are good, having satellite TV at home is aspirational so people think little of subscribing. When there is less discretionary spend about, people are happy to stay at home and watch TV. It is a trend which makes life easier for Mark Anderson, whose job it is is marketing Sky to Irish consumers.
But Anderson is pragmatic. “People are being more cautious,” he says. “They are considering if they need the full range of channels.” Whereas before, they may have signed up for the full package, some may now choose between sports and movies. That said, Anderson believes Sky has a strong product to win recruits. Sky does not release figures for Ireland, but Nielsen estimates they have 675,000 subscribers in the Republic.
When BSkyB first launched its satellite service back in 1990 subscribers had access to six channels. Today the Sky platform has 500 channels. Technical advances include Sky Anytime, allowing people to watch TV when they want on a linear or online basis. George Hook extolled the virtues of Sky + in TV and radio ads saying how it made his life “immeasurably easier”. Sky Go targets laptop, iPhone and tablet device users.
The next development is truly OTT, over the top online streaming to compete with the likes of US company Netflix, which launched in Ireland in early February. Anderson says it is fair to say people have been relatively underwhelmed by what Netflix is offering so far, with lots of BBC and Channel 4 re-runs, but he is confident the service will improve in time as they secure new rights to movies and series from Universal, Sony and MGM.
Sky Atlantic has exclusive rights to HBO Productions’ entire archive, which includes The Sopranos, Boardwalk Empire, Luck and Game of Thrones, starring Sean Bean and Aidan Gillen. Sky is said to have paid Liongate 25 per cent more than the BBC for the rights to Mad Men, which returns to Sky Atlantic this month. Deals were agreed with CBS for shows like Blue Bloods with Tom Selleck and The Borgias with Jeremy Irons.
Research showed that with Sky Atlantic quite a lot of viewing is done through series link. People will watch a couple of episodes of A Touch of Cloth or House back-to-back when the kids are in bed, or when a couple has some free time together on a Sunday morning. Much of what Sky does now is about allowing subscribers watch shows on their terms. Anderson says the PVR is a prime example of the trend along with other platforms.
While the service Sky offers consumers does well in good and bad times, they have no intention on sitting on their laurels. They added four BBC channels to the platform and have just launched the Formula 1 channel, which is available free to all Sky Sports and HD customers. They announced a two-year price freeze and bundled ESPN. Offers are regularly flagged in press ads and inserts and in leaflets delivered to people’s homes.
Sky has just run a direct campaign promoting its half price for two months offer, which runs until the end of March. The flyer highlights Sky’s “amazing choice” and how its features can help with the digital switchover, service repair calls and how Remote Record can help anyone out and about who forgot to record a show. Not surprisingly, consumers are reminded about the various costs of adding sports, movies and HD packages.
“We found inserts and door drops to be a very effective way of communicating in the UK and Ireland,” Anderson said. “Our marketing falls into two broad areas. One is around generating desire and interest in the category or individual products. The other one is about a clear call to action. While Sky’s main rival in Ireland UPC recently reported an 11 per cent increase in its triple-play revenue, its digital TV business has slowed down.
Anderson does not see Saorview posing a threat to Sky’s standing in the Irish market. He sees the free digital terrestrial television (DTT) proposition being quite different in Ireland to that in the UK. “In the UK,” he says, “you had a commercial consortia coming in backed by the terrestrials, launching some exciting new internet, which they promoted quite heavily. In Ireland, commercial consortia came together, then fell apart.
“RTE probably feels they have been put on a hook to deliver. If you look at the line-up, realistically you’ve got an RTE One +1 – but in a world of PVRs, I’m not sure that’s particularly exciting – RTE jr, which is great, a nascent RTE News Now, TV3/3e and a parliament channel. For everyone who wants to maintain their Irish channels, Saorview is a relatively low cost choice but it doesn’t compete with what we’re offering,” he adds.
Anderson says the digital switchover is of benefit in forcing Sky to think more clearly about how they target rural parts of Ireland. Up to now, Sky has been synonymous with Dublin and the major town and cities. Now they are considering if they should do some more regional targeted marketing and send in support teams. Equally, Sky have been working internally with improving their database capabilities for the Irish market.
“The big frustration here is the lack of home identifiers - postcodes,” Anderson says. “For a business which is direct orientated that’s a problem. An Post have said postcodes are on the way, but as with Government assurances on broadband, it remains an aspiration. They seem to be serious, but take it with a grain of salt. Even if postcodes are introduced it is unlikely to be a panacea, as some consumers will be reluctant to embrace them.
Sky uses Data Conversion for database management. Anderson explains: “They understand the Irish market implicitly. They do a lot of data processing work for us, to purge and merge all of our direct targeting.” Sky has had talks with Eircom and BT as it explores the possibility of Ireland’s telecom and broadband market. Sky hopes to emulate the success of its role in the UK broadband market which it entered six years ago.
Sky employs about 70 people directly in Ireland. It has plans for a new customer support centre for Dublin which will have 800 staff. The first hires have already been made but the centre will be fully operational in August. Ad Dynamics recently ranked Sky as Ireland’s third biggest advertiser, with only Procter & Gamble and 3 mobile spending more on media. About 200 Sierra engineers with Sky branded overalls are on call.
DDFH&B-JWT devised the George Hook Sky + campaign. Anderson says they do not currently work with a creative agency, but it is under review. “It’s something we’re weighing up,” he says, “and it comes down to how much we want to differentiate the Irish market. It has started to diverge.” MediaCom looks after the satcaster’s buying and planning and a lot of the brand and direct spend for the UK is handled out of Dublin.
Sky hopes to launch its AdSmart audience profile targeting service for advertisers in Ireland. While there is no date set as yet, the hope is to launch it next year. Speaking at an Interpublic conference on the future of television, Richard Kelly, sales director, Sky Media Ireland, said AdSmart will take TV advertising to a whole new level by inserting ads into video on demand (VOD) shows and targeting them at specific audiences.
Sky will first introduce AdSmart in the UK by combining offline and online data in the household profile. Ads are tailored to specific viewer categories by using postcode and TV packages along with authorised data provided to Sky by other firms. The information, which is provided with subscribers' consent so as to allay fears of consumer privacy, is used to build up a picture of relevant products and services Sky can target at viewers.
AdSmart works on the basis of Sky storing a library of ads on its set-top boxes, creating a type of ad server of sorts which feeds content to the TV screen when an ad break starts during a show being played back on VOD. The idea is to stream the ads where it is not noticeable to the viewer. AdSmart will allow Sky update ads that run in recorded shows to make them more timely and derive maximum revenue from subscriber playbacks.
Is it likely the pace of growth for digital TV in Ireland will slow down due to the recession? Anderson says Ireland is second only to Austria as being the most heavily penetrated satellite TV market in Europe. So, from a satellite TV perspective, Ireland is a bit of an exemplar. The switchover to digital at the end of October will provide a one-off opportunity, so there is room for growth.
On zapping: ‘Advertisers are getting cleverer. But up to 18 per cent of time-shifted viewing in Sky homes has remained static for over two years’ - Mark Anderson, sales and marketing director, Sky Media Ireland