David Reed surveys a year in which a Nordic satellite channel fails to
take off, and Norway gets three new channels
Denmark
Perhaps the most dramatic media story of the year in Denmark was one
that did not happen. A joint Nordic satellite project called NSD, backed
by the telecomms operators, Tele Danmark A/S, and Norway’s Telenor AS,
together with Sweden’s Kinnevik, was blocked by the European Union on
the grounds that it would have too dominant a position. What did happen
was the launch of the Danish versions of the new pan-Scandinavian
satellite channels, TV6 and ZTV. Although only aiming for between 2 and
4 per cent share, they have been welcomed by media buyers for their
ability to deliver specific target audiences of women and youth,
respectively.
‘They have low penetration and not significant ratings, but there is
huge interest from advertisers because they expand the possibilities of
what you can do,’ Morten Christiansen, the deputy managing director of
Carat Denmark, says. But no sooner have the channels come on line than
they are on the move again. The London-based broadcaster, TV3, which is
increasing its share faster than any other station in Denmark, is
shortly to move to a different satellite to improve its reach. At the
same time, it will be offering a new basic package that includes ZTV and
TV6.
If viewers find the new deal attractive enough to help TV3 increase its
audience further, it will just add to the positive feelings advertisers
have towards the new channels. Women have been easy to target through
existing commercial channels, but only at a high cost per thousand.
Hence the appeal of TV6 as a cheaper way of upweighting campaigns aimed
at the female consumer.
ZTV has probably been more valuable in filling a gap. ‘Youth is a
different matter. You think they are there, but they have just left,’
Christiansen says. He commends the breaks on ZTV for being ‘nice and
clean. You haven’t got toys, detergents and cars, it is a very targeted
market. The ads are all for chewing gum, sports shoes and soft drinks.’
Denmark’s population is less widely dispersed than its Scandinavian
neighbours, making national reach easier to achieve and local
upweighting less difficult than elsewhere. Even so, there was a strong
welcome when the leading commercial station, TV2, introduced two-minute
regional windows at peaktime.
These have been sold out four months in advance and may soon be doubled
in length. ‘They were needed for regional advertisers who couldn’t get
enough airtime on local stations, which, in any event, tend to have low
ratings, especially in Copenhagen and provincial towns,’ Christiansen
says.
In print, consumer titles were hit by an initial loss of around 50 to 60
per cent in ad revenues when commercial TV launched, and have shown
little improvement since. But more specialised titles are picking up,
such as the men’s title, Euroman, and the upscale fashion magazine,
Damernes Verden.
The fact that media owners have not been taking advantage of an overall
increase in demand from advertisers has caused some surprise. Ratecards
for next year have shown only slight increases of around 3.5 per cent.
In broadcast media, TV2 is the benchmark, publishing TVRs of 12+, while
TV3 comes in around 10 per cent lower and a local network, Kanal 2,
between 15 and 20 per cent less. Once the issue of the joint Nordic
satellite project is resolved, and the new cable package beds in,
increased competition seems likely to keep competition sharp.
Norway
Nineteen ninety-five was probably the most turbulent year for commercial
TV in Norway since its introduction. The launch in spring of three new
cable and satellite channels has been accompanied by murmurs of
disappointment. But according to Elisabeth Wilhalmsen, the media
director at Carat Norge: ‘Whether the new channels have been successful
depends on what was expected. There has been a lot of bad press, but it
is based on a big misunderstanding.’
TV+, TV6 and ZTV launched with between 15 and 30 per cent distribution
in cable and satellite homes, compared with 50 per cent for existing
stations. According to Wilhalmsen, ‘there are few households in Norway,
but a lot of cable networks’, and many did not sign up for the new
channels. That means the broadcasters are selling against small numbers,
as few as 0.5 to 4 per cent of all TV viewers. TV6 has delivered women
viewers as promised, but the youth-oriented channel, ZTV, has not fared
well with viewers. This is unexpected as many other cable franchises do
not offer MTV, one of its main rivals.
‘For the time being, we have one very dominant commercial TV channel,
TV2,’ says Ola Gaute Aas Askheim, the managing director of media and
marketing research at the JDR/McCann Group. ‘But all the research shows
that you get very good regional reach from that, and the Norwegian
market is very fragmented in terms of where the population lives.’ This
is one reason why TV2 still commands between 65 and 70 per cent of TV
adspend. With primetime TV2 selling a cost per thousand of Norwegian
Kroner 170 (pounds 17), the new channels have pitched their prices at
around NKr112 (pounds 11). ‘The cost is quite high compared with other
European countries,’ Wilhalmsen notes, and also compared with the
consumer press.
Scandinavians are noted for their high levels of reading, and a full-
page, four-colour ad costs between NKr50 (pounds 5) and NKr110 (pounds
11) per thousand in family titles, with specialist media costing from
NKr70 (pounds 7) to NKr110 (pounds 11). There have been some successful
press launches, especially among women’s magazines and style-oriented
men’s titles, such as the weekly, Vi Menn.
Legislative changes have been reshaping the media landscape. Norway’s
parliament is still debating protests by TV2 about local stations re-
broadcasting TV Norge, adding around 5 per cent to its reach and making
it more appealing to advertisers.
At the same time, negotiations are still underway that will cause a big
shake-up in these local TV franchises. Currently, there are 130, each
covering a small geographic area. This is due to be reduced to 29 from
January next year, but plans are far from finalised about which
franchises will carry TV2, TV+ or TV Norge. Outdoor advertising has been
subject to greater restriction too. ‘Contractors are going to clean up a
bit and take down a few boards here and there,’ Askheim says. He adds:
‘Outdoor is quite powerful and fairly well received. Sites are more or
less fully booked already for some periods of next year.’ The
combination of high demand and uncertain distribution means Norway is on
the verge of seeing a spot market for advertising develop for the first
time. ‘We have advised clients to keep budgets back for the last minute.
That is not the habit generally because schedules are full and you have
to get into yearly contracts to be sure of space,’ Wilhalmsen says. No
doubt, the regulators will look into that as well in due course.
Sweden
Swedish advertisers have been giving ever more emphasis to TV in recent
years. Increased viewing choice is slowly making more of the notoriously
TV-shy Swedes available, and is also giving clients a stick with which
to beat the over-priced print media.
Adspend on TV in 1994 rose by an astonishing 40 per cent, although this
slowed in 1995 from the second quarter onwards to between 5 and 10 per
cent. Next year is forecast at 10 to 15 per cent growth, although 7 per
cent seems more realistic, according to Carat Sweden. Luke Simmonds, the
TV buying director for Young and Rubicam Nordic Media, says this
dynamism is unlikely to settle down yet: ‘Media owners have determined
that the proportion of all ad expenditure going into TV is half what it
is in other countries. So they still see the growth potential as huge.’
But advertisers’ hopes that media owners will respond to the increased
competition by becoming more flexible have yet to be fulfilled. The
commercial terrestrial channel, TV4, successfully snatched the lead in
audience share to establish itself at 29 points from a reach of 48 per
cent (Carat) from the satellite channel, TV3. But now TV4 shows every
sign of becoming arrogant.
Like every station in Sweden, it only sells against programme ratings,
and will only negotiate against programmes with an average rating of 3+.
Its attractiveness to advertisers as the only real way to build weight
nationally may be working against clients’ own interests. In October
alone, the station is rumoured to have turned away around SKr20 million
(pounds 2 million) of advertising (Sweden does not operate a pre-empt
buying system).
According to Richard Davis, media director of Lowe Howard-Spink’s new
Swedish media shop, Message Media, ‘They’re the fat cats of the industry
and they don’t want to change.’ TV4 has set up a department selling
direct to clients, cutting out media shops and agencies.
But even higher on ‘a list of annoyances’, according to Simmonds, is
TV4’s refusal to release its spot log to MMS, which operates the people-
meter system in Sweden. This not only makes media planning harder, it
also adds significantly to the cost of advertising. Buying monitor
research can cost more at ratecard than the spots themselves, at around
SKr50 (pounds 5) per spot logged.
The former ratings star, TV3, has faced a different set of problems.
The year began with Procter and Gamble trying to bring the channel’s
prices to heel by removing it entirely from its media schedule for 1995.
TV3 then experienced a massive slump in share, falling to 10 per cent,
and from February to May there were huge defections, especially of young
viewers. Having brought in a new managing director with a production
background, the station has been beefing up its schedules since
September in an effort to claw back its audience. What Davis calls a
‘renaissance’ in programming has yet to be matched by TV4, which retains
its core primetime scheduling, although it has made efforts to boost
youth viewing.
Regional planning remains difficult as TV is national, except for one
hour of local programming on TV4 in the early evening. But 40 per cent
of the population lives outside Sweden’s cities where satellite and
cable have far lower penetration. While TV3 has a national reach of 53
per cent, between 72 and 75 per cent of its viewers are in the major
cities, giving it only thin coverage of the North.
Despite increased competition between TV and print, and between TV
stations, there is little sign that media owners will rein in their
prices. Having hoped that rivalry from broadcast media would cut the
leading daily newspaper, Dagens Nyheter, down to size, Davis notes that
instead, TV4 is behaving in the same way as the print barons used to.
‘TV did bring down print prices, but TV is still unrealistic. Press
rates will not go back up, TV will not go up, but TV is still too high.
It has to come down,’ he says.
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Denmark Factfile
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TOTAL POPULATION 5,197,000
ADULT POPULATION (12+) 4,481,000
Number of TV stations 6
Number of commercial TV stations 5
Number of radio stations (total) 303
Number of commercial radio stations 302
Number of newspapers (total) 365
Number of daily newspapers 42
Number of free newspapers 323
Number of magazines (total) 650
Number of consumer magazines 50
NET REACH (April 95) Adults(%) Men(%) Women(%)
Television (daily) 76 76 76
Radio (weekly) 94 95 94
Newspapers (weekly)* 96 97 95
Consumer magazines (weekly)* 99 98 99
Cinema (monthly) 25 25 25
*Relates to weekly reach of all publications not reach of weekly
publications
Source: Gallup DRB index, first quarter 1995, Carat
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Norway Factfile
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TOTAL POPULATION 4,324,000
ADULT POPULATION (13+) 3,595,000
Number of TV stations (total) 7
Number of commercial TV stations 6
Number of radio stations (total) 390
Number of commercial radio stations 150
Number of newspapers (total) 200
Number of daily newspapers 152
Number of free newspapers 50
Number of magazines (total)* 1,067
Number of consumer magazines* 347
*Figures for 1994
NET REACH (April 1995) Adults(%) Men(%) Women(%)
Television (daily) 72 72 72
Radio (weekly) 91 92.5 90
Newspapers (daily)* 87.5 90.2 84.9
Consumer magazines (daily)* 91 90.4 91.6
Cinema (monthly) 20.7 21.5 19.9
*Relates to daily reach of all publications not reach of daily
publications
Sources: Aviskatalogen 1995 (NAL), Landslaget for Lokalaviser (LLA), MMI
TV-meter Panel Arsrapport 1994, Carat
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Sweden factfile
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TOTAL POPULATION 8,745,109
ADULT POPULATION (15+) 7,109,591
Number of TV stations 7
Number of commercial TV stations 5
Number of radio stations (total) +/-260
Number of commercial radio stations=/- 80
Number of newspapers (total) 175
Number of daily newspapers ^117
Number of free newspapers 0
Number of magazines (total) 1,500
Number of consumer magazines 200
Note: =/- 150 stations are low-power community stations
^ at least three times a week
NET REACH (APRIL 1995) Adults(%) Men(%) Women(%)
Television (daily) 85 87 84
Radio (weekly) 96 97 96
Newspapers (weekly)* 92 92 92
Consumer magazines (weekly)* 65 56 74
Cinema (monthly) 25 24 25
*Relates to weekly reach of all publications not reach of weekly
publications
Source: Nordicoom - Sveriges Mediebarometer, Carat
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