BSkyB_IrisV2P2 13/10/98 10:16 am Page 1

Sky and the Digital Revolution

Early differentiation SkyDigital: what’s helped establish British Interactive A new age of television Broadcasting (BIB) - a company Television is moving into a radical new era, heralding the most exciting of the platforms: new? providing interactive services in the televisual developments of your lifetime. Increasingly viewers will take terrestrial vs cable vs 1. New channels digital environment. Interactive charge of their own entertainment in the home. Digital television will give services will include home shopping, SkyDigital offers a vast number of new viewers more opportunity to watch what they want, when they want. There are satellite banking, a travel ticketing service, an channels from British and International email capability, interactive games, as a host of new applications involved with the digital revolution which are set There are three systems (also known as programme makers with quality that out later in the case study. platforms) for providing digital Sky believes will be unbeatable. This well as informational and educational television. These are terrestrial, cable includes two new sports channels - services. Navigation through the This case study focuses on how BSkyB is driving the digital revolution and satellite. MUTV, the new Manchester United system is simply by a touch of the and examines the marketing activities taking place alongside the advent Football Club channel, and Sky Sports remote control. Digital terrestrial television is of digital television. News; new non-subscription channels received via an aerial and set-top box. from the BBC, including the brand new 5. New equipment Initially the system will offer about 15 BBC Choice - the BBC’s first new i) tvLINK An introduction to digital channels and will be available in about entertainment channel in over 30 years; 70% of the country. and new music video channels from The tvLINK, about the size of a Digital television is the latest development in fast moving TV technology and MTV - M2 - and 44 audio channels of matchbox, is a new optional feature Digital cable television will build on digital quality music. is arguably the most exciting invention since John Logie Baird first dreamed the recent growth in cable television in which, when connected to the Digibox, up TV. this country. Cable is currently 2. New features ii) The parental block very convenient - with up to 48 allows the viewer to watch the same available to about 50% of homes digital channel in more than one room, i) SkyGuide The parental control feature on channels showing up to 25 different How does it work? although only 20% of total homes are or watch a digital satellite channel in SkyGuide means parents / guardians movies and / or events each month. actually connected. This service will SkyGuide is Sky’s unique on-screen one room while someone else watches Until now consumers have had to rely on TV signals which are beamed from can block channels and programmes This will provide as much choice every offer a similar number and selection of listings guide. Sophisticated and easy terrestrial TV in another. transmitters and travel by analogue waves. Analogue systems, however, can channels compared to satellite although to use, it puts viewers in control of their above a certain rating, restrict ordering night as there has been up to now in a suffer from a fuzzy picture or vertical banding in areas where the signal is full details are not yet clear. viewing, with instant access to a whole of Sky Box Office programmes above a month! Viewers can order and pay per ii) Digibox (or set-top box) weak. Pictures created from a decoded digital signal will be crystal clear in all range of programmes, movies and certain price, or remove access to film so that they will only pay for the The Digibox is made to a high instances. Digital satellite television has built on events at the touch of the remote certain channels completely. movies they actually watch - like BSkyB’s success as the providers of control, as well as interactive features renting a video without having to leave specification technical brief by four In essence, digital television is very simple. TV signals, that have been satellite TV over the past ten years. which will be available shortly. For iii) Digital quality picture and sound the house! Viewers will be able to well-known suppliers. (Already, Sky This system currently offers the greatest example: compressed using digital compression routines, are beamed out through the Digital signals utilise binary choose what to watch on impulse via has placed orders in this country for up usual distribution means (satellite, cable or terrestrial broadcast) and then choice of viewing and is available 1. Box Office - impulse ordering of their remote control rather than having to a million boxes!) It comes in four everywhere in the country. The digital transmission of information - a series of decompressed by a box plugged into the television. Huge amounts of movies and events noughts and ones - just as in computer to plan and order ahead. distinctive individual design styles and, version of the satellite dish is sleeker as new software can be downloaded by information can be squeezed into a digital broadcast, and that essentially and smaller (black and elliptical) than 2. Search-and-Scan - a unique systems. The picture and sound quality iii) Digital Teletext satellite, new features may be added as means many more channels to choose from. current dishes and reception is via the facility which allows the viewer to of digital is, therefore, guaranteed to be dish and a set-top box. Digital satellite sample other programmes without near perfect, whereas current analogue Digital Teletext will be far more and when developed - the Why now? television offers up to 200 channels as even changing the channel transmissions can suffer from signal sophisticated than current text services ultimate in ‘future-proofing’! well as a number of interactive services and have the look and feel of the The recent deregulation of the TV market has resulted in a channel explosion. 3. Interactive services (see BIB interference. iii) The Digital MiniDish which will be available soon. section). internet. It will be easy to read and use, As a result, the number of available analogue frequencies to broadcast on is 3. New services with greater access to information and The Digital MiniDish fast disappearing. The increasing number of channels can therefore only be i) Multiscreen Movies better graphics. It provides a reliable, is about half the size of accommodated digitally. The 40 existing terrestrial TV frequencies could convenient and quick informative the current Sky dish, support up to 240 digital TV services - just imagine the variety that this will Sky Movie multiplexing or service. with a contemporary ‘multiscreen movies’ provides 11 present! design and advanced screens of movie entertainment with a 4. New uses technology to provide Digital TV will be the norm sooner than you think - the Government has choice of up to 5 different movies every i) Digital music improved reception. decreed that analogue transmissions will be switched off sometime between hour. Certain movies are additionally 2000 and 2013. This means that after the switch off date, if you want to watch shown in widescreen format with a Music Choice provides 44 channels of iv) Remote control TV, you will have to view programmes through digital. digital quality music 24 hours a day. Dolby Pro-Logic soundtrack. Sky A single remote will continues to provide the wide choice of This is the ultimate service for the control all Digiboxes films which subscribers have come to music-lover - no DJ’s, no advertising plus most TVs. The expect, from Classic to Adventure, and additional information at your from Thriller to Romance. This service fingertips. CD and artists’ details are user-friendly remote is provided 24 hours a day. displayed on screen if requested. has been ergonomically designed with a colour- ii) Sky Box Office (near-video-on- ii) BIB/Interactive coded layout and special demand) One of the most exciting aspects of cursor control. It is Sky Box Office new near-video-on- digital broadcasting is its potential for equally friendly to both demand movie and events service is interactivity. In May 1997, BSkyB left and right-handers. BSkyB_IrisV2P2 13/10/98 10:17 am Page 2

programme For example, some of the things digital to make sure will offer: retailers ● Films - to film lovers, young TASKS & ACTIVITIES have the couples etc. Create a short illustrated leaflet of This case study shows that the widest ● Home banking (interactivity) - 1about 400 words setting out the key 6development of digital satellite has possible to busy, career-minded people features of SkyDigital and the made it desirable for Sky to broaden its knowledge and principal benefits to consumers of each consumer base. What aspects of digital ● Documentary programmes - to understanding of these features. satellite are particularly likely to retired, nature-loving people, as demand for Sky. Up to this point, the encourage a wider consumer base than of the product. SkyDigital - creating a an educational tool etc. The launch of brand had a strong but narrow appeal Carry out a SWOT analysis setting the traditional focus on men and sport? SkyDigital sees (male, sport-lovers). A number of winning position 2out the strengths, weaknesses, people viewed Sky as ‘TV for boys’ SkyDigital - marketing not only a revolution opportunities and threats presented by What do you understand by the and thus the brand was inadvertently The advent of digital satellite has made in technology, but an and sales digital television. 7following business terms as they alienating women viewers and families it possible for Sky to improve its are used in the case study? evolution in marketing. market position. From the launch The ongoing mission for Sky’s not interested in sport. The mission for Sky’s marketing Sky’s marketing activities onwards, the marketing objectives have marketing and sales is to drive and sales is to drive subscription ● brand development can be divided into three major So, the marketing objectives for Sky been to create fresh demand for Sky, to subscription growth (i.e. more buyers), 3 became to: encourage loyalty and retain customers. growth. How would you go about a) stages: position digital satellite television as the ● With SkyDigital, this becomes a two- generating new SkyDigital customers, distressed purchase ● re-ignite interest and enthusiasm market leader and to make sure that ● Stage 1 - Event marketing tiered mission: and b) encouraging existing customers for Pay TV potential customers fully understand to transfer to SkyDigital? ● marketing strategy ● Stage 2 - Brand building the product’s benefits. The marketing 1. to generate new digital customers ● establish a new and softer ‘voice’ strategy has extended to establishing a (i.e. people who are not current Sky ● brand values SkyDigital: ● Stage 3 - Evolving the SkyDigital for Sky What is ‘event marketing’? Why is proposition. unique positioning for SkyDigital in the subscribers). 4it such a powerful marketing tool? ● market leader communication and ● demonstrate relevancy to a wider minds of non-subscribers. 2. to encourage current Sky subscribers 1. Building a brand through events audience (women, families, etc.) marketing Marketing strategy to move from analogue to digital. Choose a particular segment of ● subscription growth From Sky’s launch in 1989 to 1997, ● differentiate satellite from cable. SkyDigital’s new wider audience. Sky focused its efforts largely on event SkyDigital set out to create an event Sky has a great history of generating 5 Which features of digital television are ● event marketing marketing. The marketing strategy put in place to around the launch and to fulfil the sales through innovative and creative In short, all of Sky’s marketing marketing, and this is set to continue. most likely to appeal to this target meet these objectives involved: marketing objectives through a large activities aim to: In the past, events were Sky’s primary (See graph). audience? Explain how you would ● marketing objectives product - sporting events (Premiership ● establishing the ‘quality’ and scale advertising campaign involving focus marketing activities on your ● drive subscription growth and Football, Rugby Five Nations, etc.) and ‘choice’ values of Sky by using television, radio, posters, magazines, In order to drive sales, Sky is chosen audience. ● target market. continuing its partnership with and sales programming events (movie premieres, programming genres or types newspapers and the internet. commitment to a group of major high first run series etc). Sky is credited for (movies, documentaries, news and ● encourage loyalty and retain However, advertising in itself is not street retailers including Comet, having transformed televised sport with sport) to make choice relevant. sufficient to drive consumer 4000 customers Currys, Dixons and Granada. In the breadth, depth and style of its The message to consumers understanding of the new product. The addition, Sky has a well-established 3500 Total Cable, ● develop the Sky brand. coverage, as well as having became ‘If you’re into campaign and communications have direct sales operation publicised 3000 satellite and DTT revolutionised entertainment TV documentaries, you’ll love Sky’ or become an integral part of SkyDigital’s through an easy to remember number. 2500 ITV/C4/C5 To inform consumers about digital provision. ‘If you love movies, you’ll love marketing mix embracing public 2000 satellite television, Sky has engaged in Sky.’ Conclusion The near universal appeal of these relations (PR), sponsorship and £ million 1500 a national campaign running across events provided a very powerful ● promoting the value-for-money consumer promotions, in-store This case study explains how Sky is at 1000 TV, radio, internet, press and billboard BBC TV marketing tool for Sky in terms of represented by the multi channels. marketing, branding and direct the forefront of the digital revolution 500 sites: a multi-media explosion to driving sales. Sky therefore focused marketing activities. currently underway in the television 0 support this major new product launch! much of its advertising on high profile 3. Evolving the Sky proposition market-place. The fast-moving changes Widening the target market 1980 1985 1990 1995 2000 2005 In addition, Sky is actively generating events which were exclusive to Sky taking place are radically altering how Year Sky has identified a number of key viewers. The target market for SkyDigital the consumer interacts with his or her interest through impactful in-store brand values for SkyDigital: Projected Subscription and Revenue (Source: The Henley Centre 1997) includes everyone, as almost everyone TV - choosing the type of television displays in retail outlets, as well as Although event marketing has been delivery to suit the consumer’s carrying out a national retail training tremendously successful, it did lead to ● Choice - gives the viewer more watches television! Therefore, it control. The more choice that the preferences, choosing what the the polarisation of Sky’s target remains imperative to tailor Sky’s consumer wants to watch, as well as http://www.skydigital.co.uk consumer has, the more likely he audience, which, as a result, marketing messages to different how and when he/she wants to watch it. was largely made up of or she will find what is of real segments of the population. Sky has altered the focus of its Whilst every effort has been made to ensure accuracy of information, neither the publisher male sport-lovers. Also, value. nor the clients can be held responsible for errors of omission or commission. Although the core audience remains the marketing activities in order to carry the for a number of people, brand forward into the digital age and ● Control - is a new principle to ‘family unit’, with SkyDigital, different Sky had become a broaden its consumer base. Sky fully TV viewing - in essence, the features and benefits have different distressed purchase - choice belongs to the viewer and intends to maintain its position as the levels of appeal, so it is necessary to leader in multi-channel TV and instead of thinking ‘I not the broadcaster. SkyDigital want Sky’, they thought communicate these different options continue to drive digital technology empowers viewers to choose what ‘I have to have Sky!’ - to the various target audiences. forwards into the next millennium. they want, when they want. It is a very different liberating and simple to use. proposition! ● Value - SkyDigital offers value 2. Creating a wider for money. Not only does it give consumer base the viewer more choice, it will From 1997 to Autumn maintain the quality of the 1998, the emphasis at product and service. Sky shifted to brand ● Quality - a pledge to deliver building. quality of programming and Sky set out to broaden the consumer services.