Sell! Sell! Sell!: Without a Cable Deal, Starz Gets Creative With Ticket Movie Service

Cable World, July 11, 2005

By Mavis Scanlon

The 13 Starz and Encore networks reach about 30 million cable and satellite homes, but so far Starz Ticket on Real Movies, the broadband movie download service from Starz and RealNetworks, hasn't gained traction among cable operators.

Lacking a big cable (or telco) marketing and distribution partnership, Starz and Real are focusing on online marketing and not-so-traditional marketing partnerships, as well as more traditional avenues such as direct mail and television advertising. As cable operators expand their own broadband content portals, it could be useful for them to track Starz and RealNetworks' progress and learn from what they're doing right. The companies won't release subscriber numbers for the year-old service, so it's too early to tell how quickly it's taking off.

After joining Starz in February, Joe Cantwell, VP marketing advanced services, ramped up marketing for the nascent service, which costs $12.95 a month and includes downloads of up to 300 movies as well as a growing array of original shorts. First he needed to know more about current and potential Starz Ticket subscribers.

A Starz survey earlier this year found that one-third of Ticket customers have no multichannel video subscription. "This is an audience [cable has] either lost or never captured," says Cantwell.

He also learned that Starz Ticket could be marketed to seemingly disparate consumer groups such as rowdy, beer-guzzling Boston Red Sox fans and chic, upscale patrons of the W Hotels chain. The mostly male Red Sox fan base fits the demographic that makes up a large part of the moviegoing audience, and travelers who depend on W Hotels for high-speed Internet access are potential early adopters of a movie download service that takes advantage of laptops and broadband connections. Starz and RealNetworks advertised to Red Sox fans though ads on the BostonGlobe.com sports page, and to W guests through a marketing partnership with the hotel chain.

Paid ads in online search engines have been the most successful tool used to drum up customer leads, Cantwell says, accounting for two-thirds of customer sign-ups for the service as well as free trials.

"Online paid search is incredibly efficient," Cantwell says. Targeted online banner ads are also helping drive people to the Starz Ticket site, and increasingly consumers are finding the site through links from starz.com and real.com.

Video search engines, on the other hand, are still too text-heavy to be effective, Cantwell says. As online video becomes more prevalent and video search engines improve, he expects Starz and Real will put more content and advertising on those sites.

"Nothing sells video like video," he says.

Through a deal with Intel and computer retailer Micro Center Computer Stores, laptops sold at Micro Center will be loaded with a free trial of Starz Ticket; any computer owner with a fast enough connection can try the service for two weeks.

Starz and RealNetworks are also using more traditional marketing acquisition tools such as direct mail, TV, print and CD-ROM demos that can be distributed at the point of sale or in a direct mail package.

"We're not dispensing with traditional marketing just because we live online," Cantwell says. "We know there are various ways to hit consumers."

Cantwell says Starz doesn't need an MSO deal, but would prefer one. He expects to sign one this year--Starz and Real recently concluded a trial with a major MSO--but says there are many "moving parts" that need to be set in place, including who handles customer care, the technical delivery of the product and product enhancements. "We're talking about a distribution and marketing relationship that hasn't been done before," he says.

Adding a marketing and distribution partnership with a cable company would benefit Starz Ticket, as it would broaden its reach, says Will Richmond, president of consulting firm Broadband Directions. But it's not a necessity, he argues, because of the opportunities to market the service not only on the Internet but to the partners' current customers. We'll find out if that's truly the case when Starz and RealNetworks release subscriber numbers.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]