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The UK is leading the world in the provision of digital TV, especially delivered via terrestrial means to normal roof top aerials. Two digital services (SkyDigital via satellite and ONdigital via terrestrial) were launched late in 1998 and cable arrived in 1999. Today 8m homes out of about 24m have digital TV and half the homes (12m) are multi-channelled. Soon all 12m will be digital as cable completes its role out. This summer (2001) BSkyB switched off its analogue service having converted all over 3m customers to digital (it now has 5.3m including those who were digital from the outset).
The stakes are high, with all parties aiming initially to capture mass audiences and then increasingly minority audiences. From day one they have been investing heavily, £60m for SkyDigital and £90m for ONdigital just for the launches. Then as the battle heated up, there was additional costs when the players began to give away their decoders. This is an industry with large capital outlay and almost fixed operational costs, whatever the size of the customer base.
Besides the service providers there is a huge market opening up to provide
content, and with over 300 channels to start with, and perhaps 1,000s in
a few years, the service providers will have an almost insatiable appetite
for programmes. Content providers like the BBC are investing heavily in digital
TV and Hollywood film studios, with their archives and production facilities,
are finding they are the targets of predatory
acquisitions.
Yet despite all this choice of content, surveys show we are in fact watching less television. And as we become multi-channelled homes then what television we do watch is spread more thinly. As a result advertising revenues for the television stations are falling.
Advertisers are therefore looking at other media to catch our attention and they are increasing seeing mass market television as expensive. Advertising revenue for the major television companies is falling. Of course it didn't help matters that in 2000 the companies hiked their rates, or that the dot.com crash came shortly afterwards (a good source of advertising clients), followed by a manufacturing recession and now possibly a services recession. The consequence is that television companies share prices have fallen dramatically (see graph). Even the UK's most successful media company, Murdoch's BSkyB with over 5.3m subscribers, saw its share price fall by 40%. There is even talk that one of the large cable companies could collapse due to their massive debts (NTL has £9bn and Telewest has £4bn).
For the moment the mood is retrenchment and cost cutting until better times. But when the economy picks up companies will require a new business model for advertising. A model likely to be based on service providers charging advertisers for each advert seen by a specific TV viewer and even charging based on what those viewers actually buy - performance related advertising! We can see this shift on the internet with Commission Junction ditching click-through renumeration in favour of lead and commission based. Service providers will need amass social economic data and viewing patterns on each of their viewers so that they can deliver specific adverts when these viewers next watch TV with the aim of increasing the viewers propensity to buy. This has data protection implications so there needs to be a parallel move to permission based marketing.
Financial service providers will equally need to embrace and adapt to these new delivery mediums. It will change the way they communicate to prospects and customers, how they respond to purchase requests, and how they service enquires and claims. In essence, it will be a far more interactive and dynamic world, where the concept of any time, any way, and any how comes to fruition.
In the following pages we cover all the above and more.
Cooper,
Alan, 1998, TURNED ON, tuned in,
Internet Business, November 98.
[Digital TV Content]
[Introduction] [Summary]
[No. Customers] [US
Scene] [European Scene]
[Scene Elsewhere]
[Delivery Channels]
[Players] [H/w & S/w]
[EPGs] [Existing Services]
[New Services]
[Audience]
[Disadvantages]
[Advantages] [Sceptics]
[Advertising] [Financial
Services]
[Mediums Overview]
[SIM Report Mediums]
[More
Recent Developments
]
[Which to Use?]
[Other
Technologies]
[SIM Overview]
[One to One Marketing]
[Mass Customisation]
[Interactive Mediums]
[STEP Analysis]
[SIM Executive Summary]
[SIM Report]
[SIM Project]
[SIM Framework]
[SIM Methodology]
[SIM Illustrations]
[SIM Links]
[Key Information & Resources] [Guest Contributions] [List of Support Topics] [What's On]
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