It’s not often that marketers take direct aim at each other in their advertising. But satellite TV provider Bell ExpressVu is in the middle of a campaign that appears to take a thinly veiled swipe at a cable company – one whose corporate colour just happens to be red. It’s just one more sign that TV industry marketers recognize that the future is digital and that the war to control it is heating up.
Since making its debut in Canada in 1996, digital TV has performed well. As of June 2003, 37% (3.5 million) of Canadian households with TV service received a digital TV service. And according to Decima Research, these numbers are expected to increase to 4.4 million in 2004 and 4.8 million in 2005.
The hub of the battle is between the satellite providers (such as Bell ExpressVu and Star Choice), and the cable providers (such as Cogeco and Rogers). At present the satellite providers own a commanding share of the digital market with 60%. According to Decima, Bell ExpressVu is the giant of the lot, boasting 1.3 million subscribers, well ahead of Star Choice’s 800,000 and more than twice the number of the next closest cable provider, Shaw, which has 469,000 subscribers (Shaw owns both Shaw Cable and Star Choice).
So why is Bell targeting cable services in its advertising when a cable giant like Rogers is a distant fourth, with only 456,000 digital subscribers?
Perhaps because Decima is predicting cable’s share of the market to increase slightly in each of the next three years – largely at the expense of satellite providers (telcos like Telus are also expected to start making inroads in 2004). Specifically, Decima is forecasting a 5% decline in share for satellite between 2003 and 2005, from 60% to 55%.
All the same, Bernard Asselin, senior director marketing acquisition for Toronto-based Bell ExpressVu, denies that its campaign, which started in September, targets any one company.
‘We’re competing against all cable companies and against the other DTH [direct-to-home satellite] companies,’ he says.
He explains that the real reason Bell is targeting cable providers generally is ‘because most of our new customers are coming from analogue cable.
‘So we just want to tell them our service is much better and we’ll give you what you think you’re getting on cable with 100% digital, time shifting and HD [high definition] channels.’
Creative is by the Montreal-based office of Cossette and features TV, print, free-standing inserts and door hangers for targeted postal codes. Asselin says the message being delivered is two-pronged: the ads tout both better-quality TV via a digital signal, and the advantage of choice and control via bundles and features like time-shifting.
But the cable companies are fighting back, as they both defend their existing digital base and prompt analogue subscribers to make the switch.
Calgary-based Shaw, for one, works from a cable subscriber base of 2.2 million concentrated primarily in Western Canada. Its recent ‘On Demand’ campaign pushed what Peter Bissonnette, president of Shaw Communications, describes as ‘digital quality and the array of services.’
The company used local avails on wide-reaching U.S. services such as CNN and A&E to promote the campaign. There were also print executions, ongoing DM, telemarketing and door-to-door efforts (which still account for an amazing 50% of sales). A new holiday campaign promoting the benefits of digital TV and playing to a price point advantage over competitors broke late in November for the Christmas season. Both campaigns are by Calgary-based Parallel.
Meanwhile, Montreal-based Cogeco, the second largest cable company in Quebec and Ontario, next to Rogers, is going for more of an emotional pitch.
Its ‘I Feel’ campaign launched in August with the tagline ‘Life’s just better with cable.’ The TV spots feature slice-of-life moments that show a typical customer in a humorous situation. They’re meant to highlight the consumer control possible with video-on-demand and high-speed Internet.
Rogers’ recent ‘Awkward Moments’ campaign (by St. John’s, Nfld.-based Target Marketing and Communications) also attempts to tap into an emotional insight by suggesting you’ll be left out of water cooler discussions if you don’t have digital service. A new campaign, also for its digital service, broke in late November.
Most likely, cable stands to make its biggest gains by offering bundles with, say, Internet service and digital cable. Both Cogeco and Shaw say bundles are an important part of their strategy.
‘Bundling is an advantage,’ says Gary Pelletier, senior marketing manager, TV services, at Cogeco. ‘The level of churn is a lot lower on customers who have more than one service.’
However, Star Choice is really the only major competitor over which this is an advantage. Shaw, which owns Star Choice, is prevented from bundling the two services because by law the two companies must be kept separate, although Shaw does offer Internet/digital TV bundles via cable.
Bell faces no such obstacles and has been aggressively bundling Sympatico Internet service and Mobility cellphone service with its digital TV service.
Though it’s too early to give numbers, ‘Bundles are something that consumers are always asking for,’ says Bell’s Asselin. ‘We launched that in the third quarter and the result is absolutely great.’
The other front on which the battle is heating up is features. Cable is offering video-on-demand (VOD), which allows you to stop and start a film any time you like. This isn’t possible with satellite TV (unless the viewer has a personal video recorder). Satellite’s closest analogy is time-shifting, which features the same schedule at staggered times, thanks to regional signals.
Strategy asked creatives and analysts to comment on the challenge of navigating the digital road to reach consumers.
Adam Cooper, retail consultant, J.C. Williams Group, Toronto
[Bell ExpressVu’s advertising] is a pre-emptive strike. The cable providers have a long, monopolistic history and a lot of money to back themselves up. You always fear your competition and if you’re number one in an industry and you take yourself for granted, you can end up really burning yourself in the end.
With Rogers having the larger subscriber base for analogue cable [compared to Bell], I think they should try to capitalize on that base and say, ‘Hey, for a few extra dollars, all you have to do is install this box in your house and you can have digital.’
If the experience customers have had with the Rogers brand has been positive, it’s something of an advantage over a Bell, which doesn’t have experience in the television industry.
And if Rogers can communicate that, ‘Hey, we’ve been with you through the years and we know cable,’ it is certainly an advantage.
Tony Miller, CD, Sharpe Blackmore EURO RSCG, Toronto
The problem with Rogers and Bell is that they hardly have a sympathetic persona in the marketplace, so the consumer is left with the unenviable choice of sending their money to Behemoth A or Behemoth B.
[The ‘Awkward Moments’ campaign] is a persuasive bit of advertising. I look at these ads and recognize the problem. ‘If I don’t watch the shows, I can’t talk about them at the water cooler. I will not be promoted. I will die alone surrounded by 600 cats.’ They are well written, well cast, and you’re given a real reason to buy.
However, there is still a price barrier for people, and it strikes me that many consumers are stuck using older TV sets, and are therefore delaying making the switch until they sink more money into a better TV. Rogers and Samsung have bundled their services, [see story, page 4] which is a great idea. This might get people over the hump, so they can do the full upgrade at once.
Les Kahl, CD, Brown Communications, Calgary
The satellite guys appear to be using a ‘they’re not as good as us’ strategy.
The difference they’re trying to point out is the truly digital signal. That’s their advantage so it’s wise to communicate that. But I struggle with the strategy of picking on the competition as opposed to taking the high road and leading with why they’re better.
[Cable and satellite] are very similar. The fact that satellite providers are pointing out the differences is good. But to me it’s a very confusing category. It seems like a lot of work to try and figure out between the two.
The advertising isn’t particularly swaying me one way or another.
[For cable providers] I would take advantage of what I can offer that [satellite providers] can’t. If you have features that they don’t have then I think you have to talk about that.
