Which Affiliates Do the Most for You?

Our MSO readers rate the network affiliate teams. By John P. Ourand It shouldn’t come as much of a surprise that cable operators say HBO has the best promotions, as they did in our first of soon-to-be-quarterly affiliate marketing surveys. (For this one, we e-mailed surveys to our MSO readers asking them to rate the network affiliate teams.) As a premium service that depends on subscriber fees, it makes sense that HBO would do more to help cable operators promote their services and gain subscribers than ad-supported networks. But what’s particularly interesting are the different strategies from the two other winners. Discovery, chosen as most valuable, leaves money on the table as it cuts deals with MSOs, believing such negotiations put it in a better position to launch new services. On the other hand, ESPN, chosen as the best for local ad sales, takes the full value out of the market, providing ample ad sales opportunities to its affiliates. THE BEST IN PROMOTIONS: How You Can Drive Your Digital Business When The Sopranos started its fifth season last spring, HBO’s marketing was everywhere, from billboards and buses to magazines and cross channel to direct mail and e-mail. The mob hit drew new subscribers to HBO which, in turn, brought more money to MSOs’ coffers. The success of these kinds of marketing efforts is not the only reason why cable operators love HBO promotions. HBO is recognized as a leader in promotional activity because it helps sell other parts of MSOs’ businesses. Take Entourage, for example. This past summer, HBO reversed the programming window, making 19 minutes of the show available on HBO On Demand before the show premiered on the linear service. Neither HBO nor cable operators would release stats about how this promotion performed, but it was successful enough that they’ll do it again next year with either Entourage or Deadwood. "On demand is a fabulous promotional tool to promote programming," says Eric Kessler, HBO’s president of sales/marketing. HBO’s promotion team of Kessler, EVP, affiliate sales Steve Davidson and EVP affiliate marketing Olivia Smashum uses a three-pronged approach. It rolls out promotions around popular programming, such as The Sopranos and Deadwood. It leverages HBO On Demand, which Brian Roberts called Comcast’s most-viewed on-demand product. And it creates a template to make its promotions easier for systems to use. Kessler pointed to HBO’s Quick Request Creative, which allows affiliates to tailor creative for local promotions. "It has cut production time in half," he says. THE BEST IN VALUE: How to Play Nicely With Your Partners Discovery’s channels don’t command the highest ratings. Its affiliate team doesn’t have retrans leverage. And its license fees are not as high as they could be. But since its launch nearly 20 years ago, Discovery has been one of the most well-liked network groups, which has helped its nets gain wide distribution. "We could be more aggressive and jam our way onto systems," says Bill Goodwyn, president, affiliate sales and marketing. "But that’s short-sighted. We don’t negotiate by trying to get as much as we can. Then we’d have trouble getting some of our new stuff on." Discovery’s been rolling out a lot of that new stuff, from an Hispanic service three years ago to an HD service two years ago to VOD and broadband content today. In the mid-1990s, it provided MSOs with a suite of digital channels at a time when operators didn’t have enough content for digital tiers. "Long term, it made sense for them, and it made sense for us," Goodwyn says. "Those channels didn’t provide a return for us for the first several years." Discovery’s local promotions also provide a study in partnership building. One of the most popular is Animal Planet Expo, two-day expos that visit 20 to 25 markets per year. In addition to giving operators opportunities to sell high-speed data, digital cable and HDTV, local systems get ad sales opportunities and sell sponsorships. THE BEST IN LOCAL AD SALES: How You Can Hit Every Demo With One Phone Call When you think of Disney/ESPN ad sales, you think of sports, which attract the coveted younger male demo. But Sean Bratches, president of Disney/ESPN affiliate sales and marketing, points out that his group can hit every important demo out there, with ESPN, SOAPnet, ABC Family and Toon Disney. "When our affiliates look at us, they look at us as one," he says. "From these channels, we touch on every demographic group there is a spend against in our industry." Still, ESPN is the group’s big ticket item, presenting an integrated campaign to advertisers, who can buy TV, radio, the magazine and dot-com with one call. For example, MSOs can claim space in ESPN.com’s local clubhouse sections, meaning Comcast Boston can sell banner ads on the website’s Patriots, Red Sox, Celtics and Bruins sections. Some of the group’s more successful local ad sales promotions have included: ESPN the House, which signed up 450 systems (70 million subscribers); and ABC Family 25 Days holiday promotion, which was sold into more than 100 systems (60-plus million homes). "We have the ability to customize our promotions with our affiliates," Bratches says. "We bring people under the tent."