Subscribing to broadcasting success
A Sky case study

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Page 3: Strategy

BSkyB identified three core areas for management focus. These were:

  • Maximising customer loyalty by increasing the viewing of channels (i.e. programming and educational strategy).
  • Maximising customer turnaround via the prevention of cancellation, termination and downgrade (i.e. marketing strategy).
  • Maximising subscription renewals and upgrades (marketing strategy).

These were enormous challenges when viewed against the customer and financial losses being experienced in 1992.

BSkyB market demographics

BSkyB continues ongoing research which enables it to focus on consumer requirements, particularly in terms of programme development. The most valuable markets, where high spenders can be identified, are best summarised as:

  • Young males 16-34 years old.
  • ABC1 Socio Economic groups.
  • Families with young children.

Sky 2 Image 2The age composition of the typical satellite household differs from the population as a whole. Children constitute nearly 25% of the occupants in a satellite home versus 17% in all homes.
However, at the other end of the scale only 14% of satellite television viewers are over 50 years of age, compared with 28% of the UK population.

The younger household profile is clearly reflected in the proportion of satellite households with children - 42% have children, compared to 29% in the country as a whole - an obvious attraction to many advertisers. The demographic profile of satellite owners also differs from the composition of the UK population. There are slightly more women than men nationally (53% Vs. 47%), whereas in satellite homes the position is reversed (49% Vs. 51%).

In September 1996, 5.65 million UK homes could receive satellite and cable television, equivalent of a 23.8% penetration of total TV homes. Furthermore, according to the BARB total, from Satellite Homes-Universe in September 1996, 70% of these homes receive their extra channels delivered to them by satellite dish.

In important target audiences, such as young adults, children, men and housewives with children and ABC1s, the penetration levels are much higher and Sky’s viewing profiles match many advertisers’ target groups. This is evidenced by the May 1996 BARB figures, which show that nearly 14.4 million individuals aged four plus now have satellite television in their homes, representing 26.5% penetration of the UK population. Coverage of some key socio economic categories is over a third higher than overall satellite penetration.

Sky viewers do not just watch the programmes, they are also formidable consumers, with their weekly expenditure on groceries being 14% greater than the national average. Additionally, they are responsive to advertising and want to try new products. They are 19% more likely to buy products seen advertised (Source: BARB).

The growth in popularity of satellite and cable television is expected to continue well into the next century. By the year 2000 over nine million homes are expected to receive satellite and cable television (Sources: Zenith Media, Goldman Sachs and Kleinwort Benson). As satellite television is particularly popular with younger householders and men, it is projected that by the year 2000, two thirds of adults under 34 years of age, almost three in five children and 53% of the nation’s men will have access to Sky.

Sky | Subscribing to broadcasting success