YEAR-END REVIEW: Defying downturn to expand - Slowing economies have not sidetracked cable and satellite operators from growing their operations in Asia. Alfred Hille reports

The major regional cable and satellite television operators appear to be defying gravity as they continue to aggressively expand distribution and programming in the midst of what is being described as the worst economic downturn in decades. But in the battle for market share, the big players can neither stop nor slow down what they had set out to achieve five or 10 years ago. A move by any one of them to ease back on the gas pedal would only give rivals the opportunity to race ahead and grab a superior competitive advantage. With pricing plans for viewers extremely competitive, the major operators are focusing on advertisers to ensure their long-term future. But as clients become ever more cautious with their marketing communications budget, more flexible and value-added advertising packages have been formulated to stave off deep discounts. The result has been continuing rapid expansion into new geographical areas and a slew of unique sponsorship deals around special programming. Although the drive for success has intensified greatly over the past year, regional channels are keenly aware of the fine balancing act they walk - being creative without being intrusive - in the battle for viewers. MTV Asia's MTV Asia Music Awards is a case in point. In previous years, the event was staged in the major markets of China, the Philippines and Taiwan. This year, for the first time, the show is being staged pan-regionally and this strategy attracted two major Asia-wide sponsors targeting the 15-34 market - Panasonic and Mitsubishi. The channel's vice-president of network communications, Jessica Kam, says: "This award show isn't just about a billboard of singers; it's about facilitating viewers in eight markets to vote for their favourite stars through multiple platforms, including 350 outlets, the internet and mobile phone SMS technology." In the first two weeks, four million votes were cast, and it is this level of participation, which MTV hopes will attract more advertisers from individual markets, such as Smart Communications in the Philippines, ahead of the announcement of the winners at a gala presentation in February. National Geographic jumped on the discovery of the fossil of the world's largest crocodile and set in motion a marketing juggernaut of through-the-line activity. This included having to transport a life-size model of the reptile - roughly 12 metres in length - to various exhibitions around the region, attracting a major brand like Federal Express to come on board as a sponsor because the courier giant believed it could amply demonstrate its versatility in the business logistics and transportation game. National Geographic Channel Asia vice-president of sales and marketing, Deborah Armstrong, said the sponsorship offered a huge cross-platform opportunity - exhibits, exhibitions, kits, maps, books, website as well as television - which leveraged off National Geographic's heritage of highlighting the unusual and historic finds of explorers and bringing them to people in "an enriching and entertaining way". Other examples of creative but unobtrusive advertising packages include ESPN Star Sports' Super Selector Fantasy Cricket Game, AXN's Action Movie Festival and CNBC Asia-Pacific's Asian Business Leader of the Year Awards. The big broadcasters have also continued to enter into new markets to sharpen their competitive edge. Some of the more recent have been National Geographic's rollout in Japan on the Sky Perfect TV! platform, AXN's launch in Malaysia via pay-TV operator, Astro, and Channel V forming an alliance with Space Shower Networks, Japan's leading music network. But as the big broadcasters venture further afield, they have begun laying off staff in their headquarter offices and replacing the headcount with hires in their outpost operations. As CNBC Asia general manager of marketing communications Miguel Bernas puts it: "Economics has something to do with it but operational necessity dictates that we have people on the ground in those locations in order to function more effectively and to react to local market changes in a timely and appropriate manner." However, there is more to geographic expansion than meets the eye. It not only pulls in a critical mass of viewers but with the appropriate technology allows for market-specific feeds, which give advertisers options that are not readily available with other media. "We can slice up our market any way our advertisers want - regionally or if they want the region ex-Japan, or Taiwan and Southeast Asia only," says AXN managing director Todd Miller. But Miller emphasised the importance of the functional link between viewer numbers and how markets can be offered to advertisers. "Increasing viewership extends more value to advertisers. Different market mixes gives advertisers more targeted options. In this way, we provide more value, diminishing the need to resort to discounts." Star's executive vice-president of advertising sales, Toby Hayward, added that split feeds are "highly-targeted to local advertisers". He said there was "no wastage", meaning that not just regional or sub-regional advertisers can be targeted by satcasters, but also local advertisers which would help them to diversify into new categories. These efforts have been stepped up since the terrorist attacks on the United States in September. Both BBC World and CNN have acknowledged moving in this direction but both are tightlipped on specifics, although they did say that airline and travel ads had rebounded and that the automotive and IT sectors were also buoyant. BBC World Asia-Pacific account director, Sally Young, says: "We were looking at secondary markets and categories because the economic slowdown and 9-11 mainly affected the primary markets, where multinationals are located." The channel's director of airtime sales Jonathan Howlett adds: "We've tried to be more broadbased and the strategy for some time, even before September 11, has been to get out there in a big way to demonstrate that there is a huge and high quality audience watching television news." Nick Morgan, senior vice-president for news advertising sales at Turner Broadcasting, agreed, adding: "It is imperative now more than ever before to demonstrate value to customers. "Just saying you're No.1 here or there means nothing to advertisers. You must understand how to sell the customer's widgets, whether it's television, the internet or print, and then prove your effectiveness." The major satcasters reported a large slide in advertising revenue immediately after 9-11, however, they claimed that November figures have rebounded strongly. They predict operating conditions in the first quarter of next year will probably be harsh but believe that a solid recovery will begin by April.

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