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The Sydney Morning Herald




Date: 30/03/1997
Words: 360
          Publication: Sydney Morning Herald
Section: The Guide
Page: 13
The pay TV operators are busy positioning themselves for July 1 when their channels will start running advertising - and jockeying for the big dollars, reports BRUCE ELDER.

IF, like so many Australians, you are finding it easy to resist the siren call of pay TV, you are probably totally unaware that each of the main providers - Optus Vision and Foxtel/Galaxy - has its own 24-hour-a-day popular music channel.

Up until a couple of weeks ago, Optus Vision offered its subscribers ARC and Foxtel/Galaxy had a channel named RED.

ARC was part of the Austereo organisation which also, in the Sydney market, owns the FM pop/rock radio stations 2Day FM and 2MMM. RED was provided to Foxtel/Galaxy by XYZ Entertainment and originally was based on the successful formula of ABC's late-night alternative music program, Rage.

On March 20, ARC disappeared to be replaced by MTV, Music Television, and on April 18 RED will be replaced by Channel [V].

If this all sounds too weird for words just remember one more date: July 1, 1997. For on that date, if you have pay TV you will suddenly find that your programs are being immeasurably enhanced by advertisements. If you think pay TV now looks a little like the ABC or SBS, on July 1 you'll get the very strong feeling that it looks like Seven, Nine and Ten.

In the lead-up to Advertisement Day, the individual pay TV channels are busily positioning themselves to enjoy the potential advertising largesse. This is nowhere more apparent than in the world of music television where programming segments can be as short as a video clip and the demographic is the incredibly desirable 18- to 35-year-olds who are just dying to spend their disposable income on soft drinks, fast foods, fashions and fun.

In essence pay TV is about to move into Brawl No 274. After brawling over accurate recording of subscriber numbers, who has the best movies, who has the most comprehensive sports coverage, who really owns rugby league, who has the best deal, who is making the biggest loss and myriad other issues, we now have "Who has the most compelling package for potential advertisers?"

You do not have to be a genius, or even an advertising executive, to realise that for all the loud protesta-tions about greater quality and better programs which are being mouthed by the senior executives of Austereo and XYZ Entertainment, that their current agenda is being driven by the mighty dollar.

In April 1996, just before the launch of the short-lived ARC, Austereo group manager Peter Harvie was ruthlessly honest about his strategy.

"Austereo Village Music TV is the company that was set up to provide Optus Vision's pay TV music channel," Harvie said. "How did that happen? Greg Smith [Austereo's group programming consultant] said to me, 'I think we should be in pay TV because pay TV music networks were, in the main, developed by radio stations'. I said, 'That's a bloody good idea'.

"I was coming at it from another way. Radio has to be marketed in a very sexy way. It is not as sexy to the agencies as television. We've got to find sexy ways to market ourselves. From July 1, 1997, there are going to be commercials on pay TV. I saw that as a Trojan horse. That could get us in on joint sales to an under-40-year-old market. We could sell sexy pay TV commercials - particularly under 40 - and link that straight into radio.

"That same week we'd been working on programming. I spoke to Geoff Cousens [the CEO of Optus Vision at the time] the next morning . . . By the end of that week we were on our way."

So passionate is Austereo about this strategy that, although ARC ran for nearly a year, it was not seen as being a powerful enough drawcard for advertising. To crank up its perceived marketability, Austereo has purchased the right to license MTV for $5 million.

WHAT does it get for its money? MTV Unplugged, Beavis & Butthead, the US Top 20, MTV Sports, Hit List UK, MTV Amour ("sexy soul and R&B tracks"), Alternative Nation, Stylissimo ...

Most importantly they get the MTV logo which, as Bill Roedy, president, MTV Networks Intern-

ational and chairman, MTV Net-works Europe, explains, "is one of the 10 most identifiable brand names in the world amongst 18- to 24-year-olds".

In purely commercial terms, Austereo has gambled on the MTV logo being worth at least $5 million. That's a pretty big gamble.

At the same time, Paul Melville, CEO of XYZ Entertainment, was busy hitching his music television channel, RED, to the Asian music Channel [V]. While MTV might have the brand-name identification, Channel [V], which is currently beamed into 260 million homes from Korea through Asia and the Indian subcontinent to the Middle East, is jointly owned by Star TV, Sony Pictures Entertainment, BMG, EMI Music and the Warner Music Group.

Channel [V] may not have a recognisable brand name but it has strong support from four of the world's five major multimedia conglomerates (only Polygram is absent from the partnership).

Melville insists that the relation-ship between the old RED and the new Channel [V] will be more symbiotic and more committed to the development and nurturing of new Australian talent than MTV.

He is also confident that advertising will be attracted to Channel [V] because the combination of Foxtel (estimated subscribers 150,000), Galaxy (estimated 97,000) and Austar and East Coast Television produces a total of 380,000 subscribers.

It is also true that, when Foxtel and Galaxy surveyed a total of 10,000 subscribers in late 1996, RED came in at eighth overall in popularity and, in the 18-35 demographic was third after Showtime (the movie channel) and Fox Sports.

ON one level, the Channel [V] versus MTV argument will be about subscribers, advertisers and brand identification, but on another level it will be about hipness and popularity. MTV is a mainstream rock and pop music provider. Bill Roedy is a classic American busi-nessman who wears his "suit" credentials - an undergraduate degree from the prestigious military academy at West Point followed by a Harvard MBA - without once pausing to ask whether these are ideal qualifications for rock TV.

As Jeff Murray, director of Music & Artist Relations at Channel [V], points out, "There will always be a place for Bryan Adams and Phil Collins - but not with us. What we want to do is work within a domestic, exciting, dynamic music scene."

But, in the end, how important are the pay TV music channels? Does anyone really care?

The experience of Steve Davies, who owns Mr Music, the one specialist music shop in Port Pirie in South Australia, is illuminating. Late last year Austar arrived in Port Pirie and within four months about 20 per cent of the town's 5,000 houses had connected to the service. They had access to CMT (a country music channel) and RED. Davies estimates that in a six- to eight-week period he had more than 30 inquiries for music, particularly hard-to-get new country music releases, which were directly related to people watching acts on pay TV, liking the act, and then coming to his shop to purchase the record.

If this is multiplied around the country it is clear that pay TV has the potential to become the most powerful sales tool the Australian record industry has had since the 1980s glory days of Countdown and early FM radio.

Channel [V]

Formally called: RED.

Life of RED: Established

in early 1995.

Viewers: 380,000 homes in Australia (source: Channel [V] publicity).

VJs: Ian "Molly" Meldrum, Jabba, Kyla, Megan Conolly, Nathan Harvey, Donna Gubbay, Nick Bennett.

The hype: "Australia's own music channel ... encompassing all styles of modern music ... with interviews, news and specials".

The style: More towards the Triple J end of the spectrum with a commitment to Australian music.

The carrier: Foxtel, Galaxy, Austar, East Coast Television.

MTV: Music Television

Formally called: ARC.

Life of ARC: Less than a year.

Viewers: An estimated 165,000 at the end of February (source: Australian Pay TV New Magazine).

VJs: Josh Sliwka, Ian Rogerson, Phil Ceberano, Marie Azcona, Angelica La Bozetta.

The hype: "MTV: Music Television is set to revolutionise life for Australia's younger generation ... tailored for the musical tastes and lifestyles of 12- to 34-year-old Australians.

The style: An extension of Austereo's mainstream Triple M format.

The carrier: Optus Vision.

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