HORSE’S MOUTH

The ISP mar­ket has been buzzing lately with ac­qui­si­tions, le­gal ac­tion and an ex­plo­sion of stream­ing ser­vices. M2 Group’s gen­eral man­ager of con­sumer for Sling­shot, Or­con and Flip lives up to his rep­u­ta­tion of be­ing a straight talker as he sits down for a

New Zealand Marketing - - Contents -

The in­side scoop on the telco mar­ket from Taryn Hamil­ton.

ON M2 TAK­ING OVER

There’s al­ways a risk of a big in­ter­na­tional com­pany com­ing on and as­sert­ing them­selves, but it has been a great ex­pe­ri­ence thus far and they’ve been re­ally sup­port­ive. So I don’t think you’d ex­pect us to go into our shells at all. If any­thing, we’ve got more re­source be­hind us to be more ag­gres­sive.

ON HOW HIS ROLE HAS CHANGED

I’ve now picked up re­spon­si­bil­ity for the whole port­fo­lio across Sling­shot, Or­con and Flip. It’s re­ally in­ter­est­ing go­ing from be­ing a com­peti­tor of the other brands a few weeks ago to run­ning them all now. It’s cer­tainly an in­ter­est­ing po­si­tion to be in run­ning three brands when there are only six or seven brands in the mar­ket. It’s al­most half the mar­ket’s pro­file.

ON WORK­ING FOR CHAL­LENGER BRANDS

I’ve never worked for the big guys. And it’s not about be­ing a small fish in a big pond. But just in­stinc­tively, chal­lenger brands res­onate with me a lot more than work­ing for a big cor­po­rate, where no mat­ter how high up the chain you get, you just feel like you’re a worker bee. Whereas at a chal­lenger brand, you can ac­tu­ally make some mean­ing­ful con­tri­bu­tions and mean­ing­ful dif­fer­ences in the mar­ket. And Sling­shot is a pretty good ex­am­ple of be­ing able to do some ex­cit­ing stuff … You know, we’re fight­ing for mar­ket share with com­par­a­tively tiny bud­gets with a lot to lose if we get it wrong. We don’t have a pot of money to dip into to cor­rect things. It’s high energy, a lot more fast paced, a lot less bu­reau­cracy and I’m only ac­count­able to one per­son.

ON BE­ING A STRAIGHT TALKER

My bosses still re­main the same. I still work for Mark Cal­lan­der and he has a lot of trust in me. And this is some­thing I re­ally ap­pre­ci­ate. He hasn’t ever fil­tered me at any point be­fore or af­ter the ac­qui­si­tion in terms of what I can and can’t say. The com­pany is just a col­lec­tion of dif­fer­ent peo­ple and per­son­al­i­ties and we try to speak as hon­estly as pos­si­ble, be­cause that’s what we want our brands to do. We want our brands to be per­ceived as trust-wor­thy con­sumer cham­pi­ons, and it’s im­por­tant that the peo­ple who run the brands align with that.

ON THE EVO­LU­TION OF THE ISP MAR­KET

Although Voda­fone and Spark have been the mar­ket lead­ers for quite some time, they’ve changed their brand per­son­al­i­ties im­mea­sur­ably. I mean, you’ve seen Spark with a con­certed ef­fort to look a lot more like the Voda­fone of old. And I’m not too sure if any­one knows ex­actly what Voda­fone is do­ing at the mo­ment, to be hon­est. And now you’ve got 2de­grees go­ing from that re­ally per­son­able Kiwi brand to try­ing to pull them­selves up the chain a bit, and they’ve cre­ated a new po­si­tion­ing that looks a lot like the tra­di­tional Voda­fone or Spark. So we see an op­por­tu­nity in our port­fo­lio of brands to dif­fer­en­ti­ate a lot.

ON BUN­DLE DEALS

Sling­shot took a re­ally dif­fer­ent ap­proach with that, be­cause we con­sider our­selves first and fore­most as an en­abler. We need to be ex­perts at mak­ing sure that peo­ple have a great Net­flix ex­pe­ri­ence or that Youtube and Face­book work re­ally well rather than nec­es­sar­ily clam­our­ing to part­ner with these guys. Our strat­egy when Net­flix en­tered the mar­ket was to make sure that we had our net­work in­fra­struc­ture up to spec, be­cause we knew how much vol­ume it was go­ing to com­mand. This is quite a dif­fer­ent strat­egy. You would’ve seen quite a lot of press over the last month or so about the big guys whinge­ing about how much Net­flix was con­sum­ing, and we were sit­ting there go­ing, ‘Well, shit se­ri­ously? Are you for real? You know, did you not an­tic­i­pate that this was hap­pen­ing? And are you for­get­ting, first and fore­most, that it’s your job to make sure that peo­ple can con­sume this con­tent to high qual­ity?’ So, our cat­e­gory, in the short-term, is to fo­cus on be­ing a good in­ter­net com­pany. Con­tent is sexy and Net­flix is sexy, and it’s sexy to part­ner with these types of com­pa­nies, but this can also make you lose fo­cus of your core re­spon­si­bil­ity, which is just to make sure the in­ter­net works prop­erly.

ON IN­CREASED BAND­WIDTH US­AGE

My us­age has gone through the roof, and we’ve seen that from a net­work-wide per­spec­tive as well. It’s dou­bling ev­ery 12 to 18 months, and it’s driven heav­ily by what type of tech­nol­ogy peo­ple have. Un­lim­ited fi­bre cus­tomers, for ex­am­ple, are push­ing 300 gi­ga­bytes of us­age per month on av­er­age. So, imag­ine what your top five per­cent are us­ing if your av­er­age is 300 gigs.

ON SKY’S BUFFER­ING IS­SUES

I don’t know whether it’s an ac­tual strat­egy that they’re tak­ing to un­der­cut the qual­ity of their stream­ing ser­vices but they could’ve ab­so­lutely dom­i­nated the mar­ket if they’d put even a rea­son­able ef­fort into in­vest­ing in a proper con­tent-de­liv­ery net­work. To use an anal­ogy, they could’ve been the Trade Me of New Zealand. As you know, most other ter­ri­to­ries in the world are dom­i­nated by ebay, but Trade Me got in there fast and de­liv­ered a great prod­uct, and now pretty much no one men­tions ebay— whereas, Sky have lost that op­por­tu­nity in the New Zealand mar­ket. And now Net­flix has come in and it’s done in­cred­i­bly well.

ON NEON

Their long-tail stuff is nowhere near as good as any­thing on Net­flix, but cer­tainly in terms of the short­tail stuff, they’ve got much more high-pro­file movie con­tent, in par­tic­u­lar, than all the other stream­ing ser­vices do. It’s just built on a slightly shoddy tech­nol­ogy plat­form, it’s priced at a pre­mium and they don’t re­ally mar­ket the prod­uct too ag­gres­sively. I don’t know if they’re do­ing that on pur­pose or not, but it will be in­ter­est­ing to see how they go.

ON WHY CALLPLUS GROUP (NOW M2) PULLED OUT OF THE GLOBAL MODE CASE

This might be a pretty short an­swer to the ques­tion, but I’m not re­ally al­lowed to tell you why. We came to a set­tle­ment with the guys who took ac­tion against us, which is en­tirely con­fi­den­tial—so, as much as I’d like to wax lyri­cal about it, there’s not re­ally much I can say.

ON LIVE SPORTS CON­TENT DEALS

I think Sky will bat­tle to hold onto [its sports deals] in the fu­ture, but I see that they have stitched up the hero con­tent in New Zealand rugby for the next few years. But quite a lot of their con­tent deals are done at the last minute. The NRL is a good ex­am­ple of this. They never seem to stitch that up un­til the 11th hour, so it def­i­nitely leaves the door ajar for other peo­ple to have a crack at it. I wouldn’t be sur­prised if Spark and Light­box, through their part­ner­ship with Coli­seum, have a re­ally se­ri­ous crack at NRL this year. So, as soon as Sky starts to lose corner­stone con­tent prop­er­ties, it could be a slip­pery slope for them. But be­cause dis­tri­bu­tion mod­els are so much eas­ier and there’s such low bar­rier for en­try these days, all they need is an ap­pro­pri­ately sized cheque book to buy con­tent and you can just dis­trib­ute it over the top so easily. You don’t need satel­lite broad­cast net­works or to send out set-top boxes. The broad­band in­fra­struc­ture in New Zealand is good enough to go over the top. I think Sky’s hold on sports con­tent is cer­tainly go­ing to be com­ing to an end, but they’ll pro­tect the rugby con­tent pretty fiercely.

ON MAR­KET­ING A CHAL­LENGER BRAND

You need to be pretty nar­row in your fo­cus. With a small brand, you can’t be the best at ev­ery­thing, so it’s re­ally im­por­tant that you iden­tify up­front what you want to lean on and what you want to be the best in the mar­ket at. And that’s def­i­nitely what you’ll see brands do­ing more clearly in the fu­ture. Each brand will pick its area that it wants to be a spe­cial­ist in and be­come an ex­pert in that, rather than try­ing to be all things to all peo­ple—which Voda­fone and Spark have to do based on their size. You just need to look at their web­sites to see this. You go to Spark’s site and you’ll have dozens of prod­ucts that they’re try­ing to sell to you, and you have dif­fer­ent parts of the busi­ness all push­ing their own agen­das. Whereas, if you go to the Sling­shot web­site for ex­am­ple, it’s very clear and con­cise what the propo­si­tion is. It’s very tightly de­fined. We’re not putting our­selves out there as be­ing all things to all peo­ple.

ON STAND­ING OUT

When you have a brand with a mod­est mar­ket­ing bud­get, you do typ­i­cally have to do some­thing that lets you stand out from the other peo­ple. You need to do some­thing that’s not nec­es­sar­ily con­tro­ver­sial but it needs to be dif­fer­ent to give you a big­ger voice.

ON RE­CENT PRESS COV­ER­AGE OF THE ISP MAR­KET

The Global Mode stuff is prob­a­bly a great ex­am­ple of that with Sling­shot. We got a huge amount of PR and pos­i­tive sen­ti­ment on the back of all the go­ings on in­volved with the Global Mode prod­uct. And it was pretty much in our favour. We had a pretty clear con­sumer cham­pion mes­sage, and it gave us a real kind of talk­ing point-of-dif­fer­ence over the other guys. We cut through the tra­di­tional vol­ume of media spend that the other guys chuck at their mar­ket. It’s also im­por­tant to note that this wasn’t con­trived. It wasn’t a case of, ‘How do we get sales? Okay, let’s work back from that and line up a po­si­tion­ing with Global Mode’. It was very much, ‘Shit, this is what we want as con­sumers’ and we felt re­ally strongly about hav­ing the same con­tent and be­ing on the same terms as ev­ery­one else in the world.

ON THE MAR­KET SHARE OF M2

We’re sit­ting at about 15 per­cent [of to­tal mar­ket share] across the three brands. But over the last few months, we’ve been pick­ing up about a third of the new growth in the mar­ket, so we’re def­i­nitely box­ing twice above our mar­ket share in terms of growth. We’re re­ally happy with that, and in the short to long-term we hope to con­tinue that for as long as pos­si­ble.

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