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
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
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
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
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
But, in the end, how important are the pay TV music channels? Does anyone
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.
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
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
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
The style: An extension of Austereo's mainstream Triple M format.
The carrier: Optus Vision.