It’s about choice

Me­dia ex­perts cau­tious about Top TV’s chances

Finweek English Edition - - Advertising & Marketing -

IF IT DOES NOTH­ING else, the launch of the sub­scriber tele­vi­sion ser­vice Top TV should re­store the pub­lic’s faith in free en­ter­prise. The in­tro­duc­tion of com­pe­ti­tion into the pay-TV mar­ket has sparked an im­me­di­ate price war – un­like the cell­phone busi­ness, which be­came a cosy lit­tle high-price car­tel that ab­sorbed or de­stroyed new en­trants.

Top TV launched with a highly af­ford­able sub­scrip­tion of only R99/month – a third of the cost of DStv’s cheap­est pack­age. Iron­i­cally, though, Top TV says it’s po­si­tion­ing it­self not on a price plat­form but on one of choice. “Our com­pe­ti­tion isn’t Mul­tiChoice/DStv,” says Eric D’Oliveira, MD of Top TV’s agency, Net#work BBDO Cape Town. “We’re tar­get­ing peo­ple who don’t have ac­cess to pay-TV.”

It’s a hith­erto un­tapped mar­ket of less af­flu­ent view­ers than the typ­i­cal DStv pro­file. How­ever, DStv doesn’t seem to be­lieve that and im­me­di­ately launched a new, low-cost pack­age of its own called DStv Lite.

“This shows the ben­e­fits of com­pe­ti­tion,” ex­ults Net#work group cre­ative chief Mike Schalit. “DStv has been print­ing money. We said we’d give you the cheaper of­fer­ing. Now we’re giv­ing it to our com­peti­tors as well.”

But one other out­come is nec­es­sary for the pub­lic’s be­lief in free en­ter­prise to be truly vindi­cated: Top TV must suc­ceed. Fail­ure isn’t a good advertisement for the open mar­ket­place. Can it do it?

“It de­pends how deep their pock­ets are,” says Nota Bene group MD Ryan Wil­liams, ex­press­ing a widely held view. “If they have the fi­nan­cial back­ing to weather the first two years, they’ve got a chance. Top TV won’t have ac­cess to the lat­est con­tent but its price point is com­pelling. It needs first to at­tract sub­scribers, so they’ve got some­thing to sell. Ad­ver­tis­ing will come later. Con­tent is also vi­tal. It won’t be an easy ride.”

Will it sur­vive? “It’s very dif­fi­cult to say,” says Wil­liams. “We have just come out of a re­ces­sion. We have the Soc­cer World Cup for the next two months. Au­gust-Septem­ber will be a mini re­ces­sion. The tim­ing isn’t ideal.”

Fund­ing isn’t giv­ing D’Oliveira sleep­less nights. “The ser­vice has R1bn be­hind it. That’s enough to buy the best con­tent. New movies will be avail­able six to eight months af­ter DStv gets them, but ahead of other broad­cast­ers. We have more movie chan­nels than they have. We’ll have sport, in­clud­ing the World Cup, through SABC and e.tv chan­nels.”

D’Oliveira says the po­ten­tial mar­ket com­prises 5m peo­ple, half of whom don’t cur­rently sub­scribe to pay-TV. “We think we can sign up 200 000 sub­scribers in two years. Dur­ing an eco­nomic down­turn, peo­ple stay home more.”

The mar­ket­ing bud­get has been put at R120m, but lit­tle has been seen so far apart from some teaser ads. “We’ve got to show them the prod­uct first,” says Schalit. “We have to get it into clubs and bars so peo­ple can sam­ple it. Then we do the sell. We’re a busi­ness part­ner in this. That’s where ad­ver­tis­ing has value. Our best work has al­ways been when we sit at the main ta­ble. You deal with the man with the vi­sion.”

But lead­ing me­dia agency The Me­di­aShop is scep­ti­cal. In a news­let­ter it finds a breakeven tar­get of 300 000 sub­scribers in five years a tall or­der. “DStv has long tried – and only re­cently man­aged – to at­tract those in the lower LSM groups with cheaper bou­quets and con­tent of­fer­ings.”

Star­com Me­di­aVest CEO Gor­don Pat­ter­son says he’s de­lighted with the ex­tra com­pe­ti­tion but dis­ap­pointed in the mar­ket­ing so far. “They haven’t en­gaged with the ad in­dus­try. They haven’t told us about their pro­gram­ming. I wish them the best, but con­di­tions are much worse than ex­pected a few months ago. It now ap­pears there will be fewer vis­i­tors dur­ing the World Cup than there nor­mally are at this time of year. They need a lot of cap­i­tal to sur­vive and I’m not sure they can fund their busi­ness on sub­scribers alone.”

MIKE SCHALIT Ben­e­fits of com­pe­ti­tion

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