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Subscribing to Broadcasting Success Subscribing to Broadcasting Success all the channels on Sky TV Making a major They can now choose from a menu of Strategic implications BSkyB market channels and programmes, which more Chelsea go in A strategy outlines the direction an impact on lifestyles closely reflect their preferences and against Aston Villa demographics lifestyles. organisation has elected to follow. It Sport Family & Kids Documentaries and BSkyB will primarily be remembered BSkyB continues ongoing research as part of BSkyB’s must be communicated and understood General Interest as the company which changed the face which enables it to focus on consumer In this context, we have moved towards live Premiership throughout the entire business, in order of UK broadcasting, through reflecting requirements, particularly in terms of a customised service, in which sports football, aquired to ensure effective implementation. our changing lifestyles as we move programme development. fanatics can enjoy nearly 200 hours of at the start of the This was a major consideration for towards the 21st century. BSkyB also top sporting action every week. Movie 1992/93 season BSkyB and incorporated: created a new Multi Channel television The most valuable markets, where high fans can indulge by watching a industry through new technology and spenders can be identified, are best previously undreamed of selection from Exhaustive customer market innovative marketing. In under seven • summarised as: classic British television movies and research, in order to clearly years, BSkyB has become a great international movie masterpieces. Operating profits increased understand customer behaviour • Young males 16-34 years old. British success story and has entered Children can tune into a number of significantly to £170.1 million in 1994, and requirements. ABC1 Socio Economic groups. the FT100 Index as one of the top 30 • Movies dedicated kids channels. The choice and £245.2 million in 1995 and £315.0 companies. BSkyB is also the world’s Examination of the reasons • Families with young children. variety is endless. million in 1996, against losses of £47.0 • largest and most successful satellite customers cancelled/terminated million in 1992. BSkyB was listed in The age composition of the typical pay television operator. or downgraded subscriptions. the FT100 Index Top 30 companies and satellite household differs from the A brief history in October 1996, with the share price The business sees itself as a Television • Understanding acceptable and population as a whole. Children constitute standing at around £7.00 from a launch Broadcaster and technology and In less than seven years, BSkyB has unacceptable reasons for nearly 25% of the occupants in a of £2.56, the company was valued at marketing innovator. This case study established itself as a key part in the cancellation/termination. satellite home versus 17% in all homes. fabric of many people’s lifestyles. Sky £11.0 billion (up from £4.0 billion). However, at the other end of the scale News and Business concentrates on BSkyB’s new customer • Development of a new focused strategy, which has been currently has over five and a half only 14% of satellite television viewers million subscribers in the UK and Eire One of the issues related to the number communications strategy to are over 50 years of age, compared with Total Entertainment developed to manage subscriptions to of people taking subscriptions for a manage and prevent its satellite TV channels. and there are very few people who have 28% of the UK population. not “popped around to a friend’s house” short period and then letting them lapse. cancellations/terminations due In the satellite business this is known as to unacceptable reasons. The younger household profile is clearly Satellite television provides the to watch a Premiership football match the “churn rate”. In June 1992, BSkyB’s reflected in the proportion of satellite opportunity for millions of viewers to or a brand new blockbuster film. annualised churn rate was 35%, which An example of an unacceptable reason households with children - 42% have receive movies, sports, entertainment meant the company could potentially for cancellation would be a customer children, compared to 29% in the country and news directly to their own homes, The story began in 1982, when News lose about half a million subscriptions declining to continue subscriptions, as a as a whole - an obvious attraction to from a variety of satellite TV channels. International acquired the majority Music shareholding in the Pan-European Sky per year from its subscriber base of 1.5 result of not watching enough satellite many advertisers. Satellite television provides a television million households. This became a television. In other words, problems service that is essentially “customer Channel. In June 1988, the concept of Sky Television for the UK was major priority for resolution. created by the subscribers lack of The demographic profile of satellite focused”. Viewers no longer have awareness of BSkyB’s full proposition. owners also differs from the to select from the limited choice of announced and in February 1989 Sky TM composition of the UK population. terrestrial TV stations. Television launched its DTH (UK Strategic subscriber Direct To Home) service with four marketing review Strategy There are slightly more women than channels via the Astra Satellite. These implementation men nationally (53% Vs. 47%), whereas four channels were: Sky One, Sky The review, undertaken in 1992, was in satellite homes the position is News, Eurosport and Sky Movies. designed to ensure that one of the BSkyB identified three core areas for reversed (49% Vs. 51%). Sky Movies was the first subscription business’s key performance indicators, management focus. These were: In September 1996, 5.65 million UK channel. namely reduction in churn rate, was homes could receive satellite and cable achieved. This study focuses on this • Maximising customer loyalty by television, equivalent of a 23.8% In November 1990, Sky and British critical area. increasing the viewing of channels Satellite Broadcasting (BSB) merged to (i.e. programming and educational strategy). penetration of total TV homes. form British Sky Broadcasting (BSkyB). The principal objectives of the strategic Furthermore, according to the BARB However, by the end of 1992 BSkyB marketing review were to minimise: • Maximising customer turnaround total, from Satellite Homes-Universe in had accumulated operating losses of £11 via the prevention of cancellation, September 1996, 70% of these homes million per week and it was clear that • Subscription cancellation. termination and downgrade receive their extra channels delivered to (i.e. marketing strategy). them by satellite dish. a new corporate strategy was required • Accounts System termination to turn operating loss into profit. (i.e. direct debit payment termination). • Maximising subscription UK Population Downgrades renewals and upgrades Major programming acquisitions, • (i.e. subscription to fewer channels). (marketing strategy). 17% 27% 28% 28% were made, including exclusive live coverage of Premiership football that and maximise: These were enormous challenges 4-1516-34 35-54 55+ contributed towards the turn round of • Upgrades. when viewed against the customer 22% 32% 32% 14% the company and the successful global and financial losses being experienced Subscription renewals. Satellite Population floatation in 1994. • in 1992. BSkyB It has 1 million more readers than the Maximising subscriber BSkyB’s Subscription Packages Radio Times and a staggering 1,750,000 Continuous improvement more than the TV Times. The Sky TV renewals and upgrades BSkyB is the leader in a dynamic, TASKS & ACTIVITIES All 3 Premium Channels Guide has helped to increase viewing expanding industry and constantly Sky Movies, The Movie Channel, Sky Sports 1 & The Sky Multi-Channels package BSkyB has engaged in a significant At the Edinburgh television very close relationship and and loyalty and has clearly helped to ongoing Direct Marketing campaign. strives to achieve innovation and Plus 4 Premium Bonus Channels festival in 1996, John Birt, understanding with its customers. communicate the choice and variety Direct Mail packs have been sent to a improvement. New initiatives in recent 1 Sky Movies Gold, The Disney Channel, Sky Sports 2 & Sky Sports 3 available. times include: director-general of the BBC said: Your report should be 500 words long database of ex-subscribers together "BSkyB now stands poised to be the and presented in newspaper format 2 Premium Channels with postcards targeting upgrades to • The creation of new customer dominant financial force in our using a desktop publishing package. Plus 2 Premium Bonus Channels and the Sky Multi-Channels package Maintaining the lower tier subscribers, thereby benefits such as a credit card and industry by the turn of the decade - encouraging subscriptions to new Sky marketing impetus financial services. and thereafter, possibly, the dominant Carry out some market research Sky Movies or The Movie Channel channels. • The development of a new cultural force as well." Do you agree However, to perpetuate momentum 4 with a sample of 20 BSkyB Plus the Sky Multi-Channels package sophisticated marketing database or disagree with the above statement? BSkyB has continually sought to subscribers to discover what factors These campaigns have been accompanied of customers. State your arguments together with The Sky Multi-Channels package increase choice and
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