Digital opportunities

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With two more years of digital switchover process ahead of us, there is still a great deal of work for independents and plenty of sales opportunities to exploit, advises George Cole.

In 2011, the digital switchover gathers apace as three major regions – Anglia, Central and Yorkshire – switch from analogue TV to digital. It also marks the last full year of analogue transmissions, as by the end of 2012, the UK digital switchover (DSO) will have been completed. But many consumers have decided not to wait for the switchover to reach their region, and have already switched to digital TV.

Freeview says more than 18.7 million homes have Freeview sets, with Freeview being on the main set in 10.2 million households. Sales of Freeview+ Personal Television Recorders (PTRs) have passed 3 million, and Freeview estimates that some 300,000 homes are now watching the Freeview HD service – this is currently available in around 55% of homes. The attraction of subscription-free digital TV services can be gleaned from the fact that of the 6 million households in regions that have converted to digital, 75% have opted for Freeview.

Product support

Manufacturers are pleased with Freeview’s progress, especially with the newer technologies and services. Graham North, Humax’s commercial director, says: “Sales of Freeview+ products remain strong and we anticipate that this will continue to grow, especially as in 2011, there are some major UK areas switching to digital.” Christian Brown, Sony’s senior category marketing manager, says Freeview HD sales are progressing at a good pace: “Seventy five percent of our 2010 range of televisions is fully equipped with a Freeview HD tuner.” Toshiba also notes that televisions equipped for Freeview HD have been selling well, particularly in bigger screen sizes like, 40 and 42 inches. “As a feature, it encourages people to upgrade their television and pickup has been very successful. For example, the number of people upgrading from Freeview to Freeview HD has actually been faster than from LCD to LED screens,” says Fiona Patterson, Toshiba’s senior product manager. Nick Webb, Samsung’s CTV product manager, also thinks that Freeview HD is selling well: “The numbers continue to grow and demonstrate how the UK has begun to embrace and understand the advantages of high definition.”

Freesat, the satellite digital TV service has achieved sales of more than 1.4 million since its launch in spring 2008, and now offers more than 140 free TV and radio services, plus HD content and BBC iPlayer (ITV Player is on the way). Freesat+ offers easy, digital recording. “Sales are continuing to grow,” says James Atkins, Freesat’s commercial marketing manager, “and Freesat continues to evolve. Freesat represents 10% of the set-top box market by volume but more than 30% by value.” Humax’s North observes that: “Freesat is performing extremely well and we are already experiencing high volume commitment for the season. The focus is very much on the digital television recorder, as on-demand content becomes ever more important for consumers. Freesat’s marketing campaign is also helping to drive awareness of these products.”

Marketing support

So with 2011 set to become a pivotal year for the DSO, what are companies planning to do in terms of marketing? Not surprisingly, some manufacturers prefer to keep their cards close to their chest at this stage, but Toshiba’s Patterson says: “We are working with key retailers and will continue to help educate about the digital switchover.” Humax’s North says his company will be targeting the DSO regions during 2011 and is looking at a host of activities. “Our focus will be around HD+ products, both Freesat and Freeview. We will also be bringing our YouView [digital TV/internet service] product to market next year,” he says. Freeview’s plans for 2011 are still being finalised, but the company says that it plans to educate consumers in DSO regions and through regional marketing activity. Freesat’s Atkins says his company will be taking a focused approach in 2011: “We’ll be doing above-the-line activities and pull that through to support retailers. We’ll also have a DSO training team to support retailers, particularly independents. We’ll be holding training evenings for local retailers and will target community groups, like the Rotary Club.” Freesat also hopes to form links with organisations such as Retra and Digital UK to help promote the DSO.

Retailers’ role

But with the DSO so well advanced, is there still a need to educate consumers?

Freeview says that even though many people have now converted to digital, homes going through DSO in the next couple of years will also be able to get Freeview HD for the first time. In addition, there’s still an opportunity to educate people about the benefits of Freeview+. “There is definitely still a need to educate consumers about the digital switchover, especially with HD and recorder products,” says Humax’s North, “new features including, catch-up services, on-demand content and home networking will also require explanation for the wider consumer audience. Our new Freeview range offers a multitude of these extra features and to make the most of these, we work closely with our retailers to help consumers understand the benefits these features offer.”

Freesat’s Atkins says that although UK consumers tend to be the amongst the first to embrace new technology, there is still a need for education: “We have been selling HD Ready sets for some time now and we need to be explaining the various ways consumers can get the most of these sets, whether it’s with Blu-ray, Sky or whatever. But in the current economic climate, a service like Freesat gives consumers confidence to purchase and feel that they will not be left out in the cold. Look at how Freesat has developed since its launch – more HD channels, 150 SD channels compared with 80 at the launch, BBC iPlayer. and so on. Consumers can receive all of these services on equipment that was purchased two and a half years ago.”

Sony’s Brown thinks there is a great deal more understanding now amongst consumers regarding the digital switchover and how it could affect them, but adds: “However, there is still the need to educate some consumers who currently own an analogue only television set.” Toshiba’s Patterson says it’s still important to keep consumers aware that a change is coming: “Consumers need to be aware that any analogue TV will need to be upgraded, or it will become redundant,” she says, “there are two options – upgrade the TV by adding a digital set-top box, or upgrade to a new digital TV. There are lots of options and services available and it’s important to ensure that consumers choose the right one for them. By educating consumers, we can help them make the best choice.”

“We firmly believe that consumer education as far as technology is concerned is paramount, and will continue to educate on all new technologies that become available,” says Samsung’s Webb, “as strong as Freeview HD TV performance is, there is still a need to educate further both in terms of the advantages of digital and high definition. Samsung has a training team operating in the UK, offering regular courses for training retail staff on the technology we offer.”

Add-on opportunities

The feeling amongst many is that retailers have a great opportunity to promote features such as HD and digital recording products like Freeview+ and Freesat+. “Freesat is a fantastic platform for retailers because it provides many sell-up opportunities,” says Freesat’s Atkins. In addition to selling HD and Freesat+ products, Atkins notes that 50% of consumers buying Freesat equipment don’t have a dish, presenting t
he dealer with an install opportunity, “It’s a gift-wrapped sale, and retailers should be taking advantage of it,” he says. Another bonus is the ability of Freesat HD to offer BBC iPlayer on a TV screen via a broadband link: “One of the easiest ways of getting broadband to a box in the living room is to use a HomePlug adaptor, so there’s another sales opportunity there,” says Atkins.

Sony’s Brown recommends that retailers focus on encouraging consumers to upgrade to HD products, “The more buy-in retailers can get from consumers now for HD, means the more open consumers will be in the future to the latest technologies, such as 3D.” Retailers should focus on getting consumers to trade up to HD and recorder products, says Humax’s North: “This is a great opportunity for the retailer to improve customer order value while delivering consumers with a product that is more future proof.” Samsung’s Webb says retailers should point out that his company’s latest HDTVs allow consumers to use a USB stick or a hard disk drive to record programmes.

Freeview has recently launched a new campaign called ‘Living Rooms,’ which focuses on the features offered by Freeview+ and Freeview+ HD. Freeview’s website product pages highlight retail offers that are available through various nationwide retailers, and a link to independent stores via Retra. Freeview says its own research reveals that the majority of people that have Freeview+ can’t live without it. Toshiba’s Patterson thinks that while retailers should focus on sell-up features: “We can’t assume all consumers know exactly what they’re looking for, so it’s important that the different features and benefits of each product are made clear.” For example, if a consumer is replacing an analogue TV with a digital TV, they might be aware of Freeview but not Freeview HD, so it’s important the retailers make consumers aware of this newer feature. “The same goes with recorders,” adds Patterson, “Believe it or not, GFK data says there are still a lot of VCR players being used to record analogue channels, so it’s a case of explaining the recording features available on digital products, such as series-link recording on Freeview+ products.”

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