Additional Information


Content

Digital TV - New kid on the box.

ONdigital might not be the most interactive of the new TV platforms, but as head of brand management Marc Sands (above) tells Trevor Clawson, the company hopes that the simplicity of what it is offering will cut through the public's confusion over the technology and attract a mass audience.

Share this article

After months of pre-launch hype, digital television is now a reality in the UK. Satellite and terrestrial services are already up and running, the shops are stacked with set-top boxes and consumers are being offered better picture quality, more channels and a new generation of interactive services. In fact, faced with all the claims of the rival players, consumers are probably deeply confused. Terrestrial broadcaster ONdigital hopes to turn that confusion to its advantage by offering what it claims is the simplest point of entry to this latest broadcasting revolution.

In terms of multi-channel television, ONdigital is very much the new kid on the block. While BSkyB and cable companies such as Cable & Wireless Communications are entering the digital age with a solid base of subscribers who are already sold on the idea of pay-TV, ONdigital has the daunting task of building an audience of millions from zero. However, parent companies Granada and Carlton know a bit about mass-market television. As members of the ITV network, they're used to generating the kind of audiences that Rupert Murdoch can only dream about. What's more, to receive terrestrial services, consumers need only connect a set-top box to a television and conventional aerial. There's no need to install a satellite dish or suffer the inconvenience of a cable connection.

In its œ90 million promotional campaign, the company is pushing this simplicity angle hard.

Choice is another selling point. Visitors to ONdigital's Chelsea offices are immediately confronted with a rack of pick'n'mix sweets, which is intended to symbolise the company's approach to the provision of television channels. Satellite and cable operators have tended to bundle their channels in groups, pushing up the cost to consumers. ONdigital's basic œ7.99 a month package allows viewers to choose any six from a package of 30 primary channels, while the full range of 30 channels can be accessed for only a little more, at œ9.99 a month. Premium channels can also be added.

In addition to proprietary channels, the ONdigital boxes will also be compatible with a number of free-to-air services offered by the BBC, ITV, Channel Four and Channel 5. These channels are not partnered with ONdigital and consumers will be able to receive them without paying a monthly subscription.

However, anyone wanting a free service will not benefit from a company subsidy and will consequently pay more for the box.

That's all well and good. But with the mix of channels on offer from ONdigital not straying too far from the choices already on offer through analogue cable and satellite services, the company might have to work hard to build a market. To put it simply, will those 17 million homes which so far have proved resistant to Sky1, Eurosport and all the rest see the terrestrial platform as their bridge to the digital future?

Not surprisingly, ONdigital believes that they will. The company is fond of quoting an NOP survey carried out in 1998 which found that five times as many people are interested in buying a digital terrestrial box than the satellite equivalent. And a separate NOP report concluded that there were around 11 million five-channel households in the UK which were open to the idea of paying a monthly subscription for more choice. With public opinion seemingly so open to what it has to sell, ONdigital is happy to declare that it is in the business of growing the market.

"The whole move to digital is not about getting existing cable and satellite subscribers to go with us," says Marc Sands, head of brand management at ONdigital. "It's all about opening a market that hasn't yet been touched by multi-channel TV."

Sands expects the demographic of the ONdigital audience to be rather different to that of BKSkyB or the cable companies. This will partly be a reflection of the technology on offer. He hopes that by providing the simplest point of entry to digital services, the company will appeal to the majority television audience which has so far proved resistant to both dishes and cable connections.

"If you own the positioning of the simplest way to go digital, you have a good business," says Sands. "And you shouldn't underestimate how much the British hate satellite dishes."

Sands admits that all the digital platforms are offering a similar mix of channels - at least as far as the most popular broadcasters are concerned.

However, there are some differences. While the BBC will be broadcasting its digital services (BBC1,BBC2,News 24 and BBC Choice) on all platforms, ITV and ITV2 are going out only on terrestrial TV. And although these channels are technically free-to-air, ONdigital's head of communications Andrew Marre sees their commitment to the terrestrial platform as good for his own company.

Sands believes that digital television will radically change the way that people use television, something that is sure to have a knock-on effect on advertising. With more niche channels on offer, there could well be services entirely devoted to fishing, say, or computers. Sands says that advertisers will then produce ads specifically for niche audiences, rather like the magazine market at the moment. Having acknowledged that, however, the company stresses that it is not in the business of selling ad space - that's the job of the channel operators themselves.

In common with other digital platforms, terrestrial set-top boxes have built-in software to enable the use of a range of text-based and graphics-based interactive services. Essentially, it's supercharged teletext, with a mark-up system allowing broadcasters to create pages with text, high-quality graphics and photographs. As with teletext, the pages are broadcast in e batches and can be called up using buttons on the TV handset. However, digital text promises to be a lot more user-friendly, largely because of the extra bandwidth on offer.

According to Marre, the main difference lies in the speed at which the pages can be broadcast. For example, most people are familiar with multiple pages on analogue teletext. A travel ad page might have up to 100 subpages rolling over at regular intervals, but because these subpages are broadcast one-by-one, the viewer does not have the option of moving back or forward at will. Miss the details about the particular flight or holiday that you are interested in and you have to wait until the page rolls around again. The extra bandwidth offered by digital technology allows the broadcaster to send all these pages simultaneously. This means the viewer can flick back and forth at will.

Consumers will also have the option of buying set-top boxes fitted with modems. This is where the potential interactivity comes in, allowing the viewer at home to buy goods online or ask for further information without having to pick up the telephone. However, this will not be a feature that is widely used for some time. In fact, ONdigital is at some pains to play down the interactive potential of the technology.

That approach is reflected by the service's two main shopping and information channels: 'the Shop' is operated by Littlewoods and Granada and offers stripped-down, consumer-oriented programming and the opportunity to view and buy branded goods; the second channel, part of the free-to-air component, is entirely devoted to the output of Teletext. Neither is embracing modem-based interactivity to start with.

Anyone wanting to buy goods from the Shop will have to pick up their telephone. The same will be true for consumers trying to contact the advertisers who provide the revenue for Teletext's news and information service. According to Gary Bean, Teletext's marketing manager, people will need to be allowed a little time to come to terms with the new technology. "Interactivity through a modem will be something we'll have to think about for the future, but not on day one," he says.

Bean believes that consumers will take to the new technology in time but that, in the short term, many will prefer the human touch provided by call centre sales staff. And ONdigital's Sands also takes the cautious view: "Interactivity doesn't work yet and it won't for two or three years."

ONdigital's platform might not immediately revolutionise the business of direct selling, but the mark-up text technology offers real benefits to advertisers in terms of branding. Conventional teletext has only seven colours and a limited number of fonts to play with and, as a result, company logos are an approximation at best. By contrast, digital technology allows those advertisers to present their full visual identities in all their exotically scripted and multi-coloured glory.

In addition to the teletext channel, broadcasters will be able to run their own text services underneath their channels. This opens the door to the sort of interactive advertising where viewers are able to link to on-air campaigns through clicking on the appropriate on-screen icon to access back-up support material. However, it remains to be seen just how many broadcasters and advertisers intend to exploit these facilities.

Anyone looking for the much-talked-about convergence between television, telecommunications and computers will probably be disappointed by ONdigital, but the company does plan to offer some very limited internet facilities.

Eventually, the company's subscribers will have an option to buy small keyboards with infrared links which will enable them to compose and send email.

But this lack of emphasis on interactivity is not surprising. ONdigital's target audience is likely to be a lot more concerned with whether they will find the service is simple to use than with convergence. According to Marre, the main priority has been getting the mix of programmes right.

One by-product of this is that ONdigital is not too concerned about the lack of compatibility between the satellite, cable and terrestrial systems.

With interactivity not a major issue for the company, advertisers will not be stuck with the cost of adapting campaigns to match or make better use of the technology on offer. Sands rejects fears that we're on the verge of seeing a standards war similar to that between the Betamax and VHS video systems.

"The three systems - analogue, terrestrial and satellite - will co-exist," he says, "just as they have been doing."

ONdigital believes that the simplicity of its product, combined with the typical British antipathy towards satellite dishes, will stand it in good stead when consumers make their choice.

The company promises mainstream television and mass audiences. But it remains to be seen whether this formula will compensate for the company's reluctance to embrace the possibilities of interactivity.



CASE STUDY - TELETEXT

We have a brand name that people know and trust. We want to take that brand name and move it onto the digital platform



Gary Bean Teletext

For Teletext, the launch of digital terrestrial broadcasting means the opportunity to develop its news and information services on a dedicated channel. The company is already well known as the primary text supplier for ITV and Channel 4 and currently has an audience of more than 20 million households for its analogue output.

Like the ITV companies themselves, Teletext pays a franchise fee for the right to broadcast and is supported entirely by advertising and sponsorship.

The company has already embraced the digital era by moving its mix of news, sport, financial information, weather and features onto the internet.

The launch of digital terrestrial has provided another point of contact with the public.

"We have a brand name that people know and trust," says Teletext' s head of marketing Gary Bean. " We want to take that brand name and move it onto the digital platform." Teletext was a pioneer in turning a medium born from the ethos of public service broadcasting into an effective channel for advertising. Travel ads have proved particularly popular and these days the company can boast that around 10 per cent of UK holidays are sold from its pages. The medium has also proved effective for supporting ad campaigns running on-air and in the press.

Bean says his company is excited by the potential of the digital platform.

With more than 200 colours to play with, the quality of the graphics will be much higher than anything offered by seven-colour analogue teletext.

This means that advertisers will be able to brand themselves a lot more effectively. At the same time, the environment is much more attractive to consumers.

And navigation is easier. With viewers able to activate computer-style pop-up menus on the digital Teletext pages, they no longer need to return to the main menu pages while browsing. Users are also able to click back and forth through multiple pages at their own speed, rather than having to wait for them to roll around, as is the case with analogue text.

Interactivity is still limited, but that could change. "We'll look at ways to use the modem backchannel to develop interactive services," says Bean.

He uses the example of travel advertising. When Teletext was introduced, consumers initially resisted the idea of using it to buy holidays. These days, many people are quite happy to pick up the phone and pay by credit card on the basis of a Teletext ad. Bean believes consumers will eventually come to terms with the idea of automated purchasing via a modem and phone line.



CASE STUDY - LITTLEWOODS AND GRANADA

It would be a lot easier if everyone adopted the same technology for interactivity, but the chances of that happening are very slim



Karen Kidd The Shop

The Shop - a joint venture between catalogue giant Littlewoods and Granada Media - has a channel of its own as part of the ONdigital subscriber-only service. Based at Liverpool's Albert Dock, the company is committed to a presence on all three digital television platforms. The Shop also operates a transactional site on the internet.

Styling itself as a 'high street on TV', the Shop is offering scheduled programming, with each segment covering a particular branch of the consumer marketplace. For example, a 9 am clothes programme could be followed by celebrity chat at 10 and toys at 11. Each programme will offer goods bought in from more than 15 major brand suppliers, including Adidas, Timberland, Sony and Nintendo.

Not surprisingly, the aim of the venture is to capitalise on a broadcast/interactive commerce market which it believes will be worth œ1 billion in the UK by 2002.

At the moment, anyone wanting to buy the goods they see on-screen will have to ring a call centre, but the Shop's commercial director Karen Kidd says the aim is to move towards full interactivity next year.

There are problems here. The company is currently in talks with BSkyB, ONdigital and Cable and Wireless on ways to create a common interface for interactivity. "It would be a lot easier if all three adopted the same technology," she says, "but the chances are very slim." In the meantime, the Shop's web site has details of all the goods on offer and facilities to buy online. Kidd adds that interactivity will enable it to collect information on users' buying habits, but this will simply be an extension of current practice. "We're doing it already," she says. "When people phone up they leave their details. We'll be doing extensive market research."

THE NUTS AND BOLTS FOR ONDIGITAL

Set-top boxes are currently being manufactured for ONdigital by Philips, Pace, Sony, Nokia, Toshiba and Grundig. Consumers will have the option of buying machines with built-in modems, but this, according to ONdigital's head of communications Andrew Marre, "won't be compulsory".

As well as set-top boxes, the first dedicated digital TVs should be in the shops soon. Philips is manufacturing an ONdigital-compatible set and Sony will be marketing a machine with facilities for a digital terrestrial plug-in.

To facilitate interactive services, ONdigital, along with the BBC, ITV and Channel 4, decided on a system known as MHEG. On the page creation side, this is essentially a mark-up language which allows producers to build pages with text, high-quality graphics and interactive features.

It falls well short of the kind of TV/internet/computing convergence talked about when the idea of digital TV was first mooted, but there are plans to introduce an email service for consumers who pay extra for an infrared keyboard.



This article was first published on marketingmagazine.co.uk

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus

Additional Information

Latest jobs Jobs web feed

FROM THE BLOGS

The Wall blogs

Back to top ^