So far, only one has gone on air and there are reservations about their viability, but all of Australia’s fledgling pay TV operators are spending big – an estimated $A60 million ($43 million) between them – on aggressive marketing blitzes to win the hearts and pocket books of would be subscribers.
There are three major feevee players Down Under: Galaxy TV, a nine-channel microwave and satellite system owned by Australis Media, with partners TCI and Len-fest Communications, the first and so far only one to air; News Corp.’s and telco Telstra’s cable operation Foxtel, which has allied itself to Galaxy by agreeing to transmit its package on cable; and Optus Vision (OV), a cable co-venture between Continental Cablevision, telco Optus and Kerry Packer’s Publishing and Broadcasting Ltd.
The three have appointed two advertising agencies each to mount their huge campaigns, with accounts said to be worth $10 to $14 million each.
Foxtel has signed up Young & Rubicam for branding work and Direct Works for tactical direct marketing. Optus Vision has George Patterson Bates (branding) and Leo Burnett Connaghan & May (tactical). Galaxy hired Foote Cone & Belding subsid Mojo (branding) and Mattingly & Partners (tactical) on its case.
Galaxy’s campaign got underway late last year and perhaps gives the best indication of how the pay TV marketing war will be fought. Originally the entire account rested with Mojo, but it was split earlier this year amid rumors the embryonic feevee player with low sign-up rates was eager for a more “retail” approach. Fellow Sydney agency Mattingly – which has years of such campaigning experience under its belt – was awarded half the account.
Since coming aboard, Mattingly has produced some clever blurbs such as one to promote Galaxy’s coverage of the FA Cup, sporting the tagline “FA Cup; FA Ads.”
Thus far, Galaxy’s campaign has played up the choice of multichannel TV and the fact it is interruption-free, because advertising on pay TV is banned until July 1997. The ads will run on some of the commercial webs on the condition they do not draw attention to the lack of advertising on feevee – a selling point left to tactical print and outdoor advertising.
Since the appointment of Mattingly, Galaxy dropped its installation rate of $215 to a mere $71 in what insiders believe is a dash for subscribers before the competing OV and Foxtel services begin the chase in earnest.
“The $A99 ($71) offer has been a big success; our installation crews are booked out in Perth until August and it is picking up in the Eastern states,” a source in the Galaxy camp maintains.
So far, the source said, Galaxy execs have found that, contrary to popular belief, the average subscribers are “not necessarily time-poor, cash-rich people, but time-rich and not so cash-rich. Many lower socio-economic groups are taking it up with more gusto than richer people.”
Australis head of programming Peter Rose has claimed the subscriber takeup shows the discounted $71 installation fee and ad campaign are working. Galaxy needs over 400,000 subscribers (7.2% of households) to break even. The service’s lifeline will probably come with the arrival of Foxtel’s cable service, which will carry Galaxy’s channels.
Programming company XYZ Entertainment, which packages four of Galaxy’s channels, is on the verge of appointing an agency for its $1.5 million account. Although XYZ director of programming and promotions Kimberley Scott refused to reveal her short list, Sydney agencies Lintas and Saatchi & Saatchi are reportedly among those putting up their hands for the business.
Longtime Sydney Morning Herald marketing editor Rochelle Burbury believes the feevee ad war will be savage and will call for some inventive ads.
“It is becoming so competitive, they have to find or invent some difference between them,” Burbury said. “Make no mistake, this will be a marketing war because it will be the only way they can really differentiate themselves. They will all be offering very similar services and they won’t want to get into a pricing war.”
The services became even more similar when Foxtel chief executive Mark Booth recently announced his outfit was walking away from its original pledge of providing a digital service, saying instead it would offer the analog settop box technology it initially scoffed at because digital technology would be better developed later for interactive applications.
OV, meanwhile has vowed to have its cable pass three million homes by 1998, offering both feevee and telephony services, which insiders expect to be a core plank of the OV campaign.
Both Foxtel and OV are shooting commercials at present, suggesting a flurry of commercials are just around the corner ahead of late October launches. Foxtel is also said to be churning out brochures ahead of a massive direct marketing door-to-door hunt for subscribers.