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December 1, 2003 - Strategy Magazine
Regular Features

Digital TV Wars
Who'll control the future of digital TV?

by Samson Okalow
page 2

It's not often that marketers take direct aim at each other in their advertising. But satellite TV provider Bell ExpressVu is in the middle of a campaign that appears to take a thinly veiled swipe at a cable company - one whose corporate colour just happens to be red. It's just one more sign that TV industry marketers recognize that the future is digital and that the war to control it is heating up.

Since making its debut in Canada in 1996, digital TV has performed well. As of June 2003, 37% (3.5 million) of Canadian households with TV service received a digital TV service. And according to Decima Research, these numbers are expected to increase to 4.4 million in 2004 and 4.8 million in 2005.

The hub of the battle is between the satellite providers (such as Bell ExpressVu and Star Choice), and the cable providers (such as Cogeco and Rogers). At present the satellite providers own a commanding share of the digital market with 60%. According to Decima, Bell ExpressVu is the giant of the lot, boasting 1.3 million subscribers, well ahead of Star Choice's 800,000 and more than twice the number of the next closest cable provider, Shaw, which has 469,000 subscribers (Shaw owns both Shaw Cable and Star Choice).

So why is Bell targeting cable services in its advertising when a cable giant like Rogers is a distant fourth, with only 456,000 digital subscribers?

Perhaps because Decima is predicting cable's share of the market to increase slightly in each of the next three years - largely at the expense of satellite providers (telcos like Telus are also expected to start making inroads in 2004). Specifically, Decima is forecasting a 5% decline in share for satellite between 2003 and 2005, from 60% to 55%.

All the same, Bernard Asselin, senior director marketing acquisition for Toronto-based Bell ExpressVu, denies that its campaign, which started in September, targets any one company.

"We're competing against all cable companies and against the other DTH [direct-to-home satellite] companies," he says.

He explains that the real reason Bell is targeting cable providers generally is "because most of our new customers are coming from analogue cable.

"So we just want to tell them our service is much better and we'll give you what you think you're getting on cable with 100% digital, time shifting and HD [high definition] channels."

Creative is by the Montreal-based office of Cossette and features TV, print, free-standing inserts and door hangers for targeted postal codes. Asselin says the message being delivered is two-pronged: the ads tout both better-quality TV via a digital signal, and the advantage of choice and control via bundles and features like time-shifting.

But the cable companies are fighting back, as they both defend their existing digital base and prompt analogue subscribers to make the switch.

Calgary-based Shaw, for one, works from a cable subscriber base of 2.2 million concentrated primarily in Western Canada. Its recent "On Demand" campaign pushed what Peter Bissonnette, president of Shaw Communications, describes as "digital quality and the array of services."

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