Last month, video-on-demand service Mag Rack urged viewers to tune into its “Your Next Car” video magazine to check out the latest phenomenon of street racing.
The promotion was at once an ad for Mag Rack and for the film “2 Fast 2 Furious,” an on-demand title from Universal.
The advertisement is noteworthy because it’s one of a handful of new marketing initiatives that VOD providers are testing as they angle to drive buy rates higher. In addition to Mag Rack, iN Demand, Starz on Demand and Comcast are all turning to new marketing strategies to boost the growing on-demand business.
They are finding that visceral and hands-on marketing stunts can capture consumers’ imaginations and in turn increase the on-demand business.
Mag Rack expects that 2 million digital cable customers-on Insight, Charter, Cablevision and MediaCom-will have access to its service by the end of 2003. About 40 percent of digital subscribers sample Mag Rack programming at least once a month. According to a Frank Magid survey, people who use Mag Rack are more than twice as likely to purchase a VOD movie.
That’s why the VOD provider decided to team up with Universal to promote its street racing film as the lead on-demand movie last month.
The street racing tie-in on “Your Next Car” as well as the tags that urge viewers to order the movie on demand, should cross-pollinate the Mag Rack service and movies on demand, said Matt Strauss, executive VP and general manager at Mag Rack. Beginning Nov. 6, “Your Next Car” featured segments on NOPI (named for Atlanta-based Number One Parts Inc.) tuner cars, Qualcomm racing in San Diego (legal street racing) and tuner racing as depicted in the movie. Each episode is wrapped with cross-promotions encouraging viewers to order “2 Fast 2 Furious.”
“We are using Mag Rack to create more awareness for VOD and using it to create some added value for the movies on VOD,” Mr. Strauss said. “We think it will be a valuable test to see if it will help drive buys on the movies. We’re constantly looking at marketing tactics to help elevate VOD.”
Mag Rack is not alone.
Leading VOD provider iN Demand is developing plans to roll out a giveaway promotion to several markets next year. The marketing campaign will follow Cox’s successful effort last May in San Diego when it encouraged customers to steamroll and sledgehammer videotapes at the San Diego Sports Arena after a football game. The result of that strategy-which included a watch-and-win sweepstakes to give away a high-definition television each week for a month-was a 78 percent increase in VOD buys for the month.
At that time in May, industry experts predicted accurately that such marketing stunts would become more commonplace, no matter how outrageous. And they have.
Sergei Kuharsky, senior VP of marketing at iN Demand, is evaluating how to bring the San Diego model to other markets. “We’re taking that forward to other markets and will focus on that in the next year. We need to be about trials. We need to get a lot of people in the door,” he said.
iN Demand will map out whether to include radio, sweepstakes, direct mail, online and an on-demand landing page onscreen in each market. The free HD set is effective because it gets the consumer’s attention and leverages another business for the MSO and for iN Demand-HD, Mr. Kuharsky said.
Starz on Demand relied on a number of grass-roots marketing efforts in four of the largest Insight markets as it rolled out its SVOD service to the operator’s 1.4 million customers from August to October. Tactics included handing out 15,000 balloons promoting the service at a University of Kentucky/University of Indiana football game in Bloomington, Ind., and airing radio spots in the four major markets that let listeners know they could win a $1,000 or $2,000 shopping spree by spotting the Starz on Demand demo jeep.
Such grass-roots marketing drove subscriptions for Starz, which includes the movie channels and the on-demand service, from 30 percent over projection to double the projections in some markets, said Kelly Bumann, VP strategic marketing at Starz. She expects the grass-roots model to be followed in other markets.
Comcast rolled out VOD to its 2 million subscribers in New England starting in June. In addition to traditional advertising in the form of direct mail, broadcast spots, cross channel spots, radio, magazine and online advertising, the operator is generating attention now through outdoor ads on buses, trains and, most interestingly, on toll booths, so that drivers waiting in line can check out the ads. The goal is to catch viewers’ attention in ways Comcast hasn’t done before, said a Comcast spokesperson.
Since the advertising campaign kicked into high gear in October, Comcast has seen a 400 percent increase in VOD usage.
Finally, Comcast also sets up living rooms in area malls so shoppers can come in and sample the on-demand service. The mall tour will run through the holidays.