TV: Broadening TV's European Horizons

Thanks to a looser regulatory framework, pan-European TV channels are pushing the boundaries of broadcasting to allow viewers more control and advertisers more choice. Alex Benady investigates.

The taxonomy of television just got more taxing. We've already got terrestrial, cable and satellite available in digital and analogue form. You can even watch it on your PC.

But this week the business-news station CNBC Europe added a new layer of complexity when it became the first broadcaster to offer viewers in 17 European countries the chance to watch "mobile TV". Others have used mobile phones to show clips and highlights or programming subject to a time lag. But CNBC's innovation is live, real-time broadcasting that differs from what you see on your set at home only in that it is shown on a screen the size of a large postage stamp.

Pan-European TV (PETV) stations are in the vanguard when it comes to broadening their offer to both viewers and advertisers, on screen and off. Not only are PETV stations liberating themselves from the strictures of the television set, they are also increasingly selling much more than simple spot advertising campaigns. Nowadays, they are as likely to offer you sponsorship, an SMS campaign, a microsite, a CD or an event as they are a conventional campaign.

Indeed, for many PETV channels, mixed-media campaigns are now the norm.

"Of ten media briefs we receive, seven now seek solutions beyond the traditional 30-second spot," Mel Alcock, the executive director of communication sales at Jetix (formerly Fox Kids), says.

It is tempting to view these initiatives as simply a response to the recent recession. In fact, PETV was scarcely touched at all. Advertising revenues have continued their upward march almost unabated for more than ten years now.

The best explanation for this apparent paradox is that any cyclical effects on PETV have been masked by massive structural changes in TV. This is clearly illustrated by the growth of the number of multichannel homes in Europe.

In 1995, there were 62 million European multichannel homes. By 2000, there were 98 million and today there are 116 million. According to the International Television Research Group, that figure is set to rise to 142 million by 2011.

One of the main forces behind this phenomenon has been the growth of digital technology, Mick Buckley, CNBC Europe's chief executive, says.

"Until the digital revolution occurred, TV stations would compete for audience through programming and for revenue through spot advertising.

Digital increased the amount of available 'shelf space', which meant there is now both more competition from other broadcasters and a greater range of tools with which to build relationships with viewers."

CNBC's strategy has been to build these relationships with viewers in as many new places as possible. So last autumn the station agreed to provide specially commissioned hourly news clips to the wireless trading service Cantor Mobile. A few weeks later, it launched a broadband subscription service.

It is about giving viewers greater control over how they consume programming, Buckley says. "Because of the nature of our content, which is highly time-sensitive information on shares and markets, we want to be available in any format that is convenient to them.

"The benefit to CNBC is the extra revenue that flows from these services. The benefit to advertisers comes from the deeper relationship between the channels and the viewers that comes from being available in a form that suits viewers rather than broadcasters."

Others argue that the broadening of PETV offerings is not so much a direct result of technological change, but a response to changing client needs.

"These changes are driven by clients," Jonathan Davies, the senior vice-president, advertising sales at CNN Europe, says. "In a fragmenting world, advertisers need stronger branded content in order to stand out."

So as well as spot advertising, CNN increasingly puts together multimedia packages, particularly around sponsorships. For Vodafone, the station created a series called Global Office, supported by a website, which looked at the problems of managing companies in a global business environment.

For InterContinental hotels, CNN developed a series called Business Traveller, which was also supported by a website plus conferences and events featuring on-screen talent.

"Increasingly, these deals are co-ordinated with other media in the AOL Time Warner group," Davies says. "So, for Rolex, we created a programme called Inside Sailing, about sailing large yachts. It was supported by an ad campaign on air while Time magazine ran a series of advertorials on the same subject."

One reason this approach has been so successful is that PETV channels segment audiences horizontally. So CNBC targets senior businessmen, MTV youth, while channels such as Jetix talk only to children.

Encouraged by a looser regulatory framework, PETV stations are able to devise creative ideas and promotions that sweat their assets while helping leverage their advertisers' spot campaigns.

So Jetix runs all sorts of events to add value to spot campaigns. The Jetix World Cup for children involves teams from 16 countries and is sponsored by brands such as Suzuki and the German trainer brand Deitschmann. It also hosts 17 branded websites including for the toy manufacturer Hasbro.

It's a similar story over at Turner Entertainment, which runs Cartoon Network, Boomerang, Toonami and TCM. It creates websites, produces branded comics and also puts its on-screen characters at the disposal of advertisers.

Last year, for instance, the channel did a deal with Kellogg, which saw its Johnny Bravo cartoon character appearing on packets of Frosties while the Power Puff Girls helped promote Rice Krispies.

MTV runs events, mobile content/marketing, SMS, online, club nights, tours, games and even produces branded CDs. Last year, it developed an "Emporio Armani Night" including branded bumpers, a microsite and a competition.

It also signed a three-year deal with Motorola worth $75 million.

"Young consumers are so savvy, aware of ads and marketing that you have to constantly leap further to get cut-through. You can't just throw an ad on TV anymore; you need to get real engagement," Tom Satchwell, MTV's EMEA marketing strategy manager, says.

He predicts that such deals are the way forward. "They offer so much to both sides. The channel gets revenues and deeper relationships with advertisers, while we get more effective communications and mobilise the broadcaster's brand values on our own behalf."

Most channels will not give precise figures for the current value of non-spot advertising, saying only that it is between 5 and 25 per cent of their income. The one thing they all agree on is that the share is going to increase in the coming years.