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

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