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The Sony channel New Channel Evaluation Fuel for Brilliant DECISIONS February 2013 Fuel for Brilliant DECISIONS Outline 1.Introduction 2.Main Findings in Detail i. Is there a need? ii. Could Sony do it? iii. Do they like it and would they


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SLIDE 1 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS

The Sony channel

New Channel Evaluation

February 2013
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Outline

1.Introduction 2.Main Findings in Detail i. Is there a need? ii. Could Sony do it? iii. Do they like it and would they watch it? iv. Would it drive subscriptions? 3.Conclusions & Implications

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SLIDE 3 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Introduction

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Background and methodology

Background SONY and FOXTEL have been in discussions regarding a channel for women. In February 2012, research was conducted to test the channel concept for propensity to watch, measure the appeal of the channel and proposed programming and identify any potential barriers to viewing and successful channel launch. Methodology D&M Research hosted an online survey with 500 Australian women aged 25-54 years. The survey was 15 minutes long and included visual stimulus in the form of a video showing elements of the SONY channel
  • ffering.
To achieve a good spread of women, quotas were placed on age and location. The sample included 50:50 Pay TV Subscribers / Non subscribers, with the data weighted back to the population proportions in the analysis. The typical respondent was a women aged 40 years, married with children, living in a Capital City with a combined household income of around $90K.
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SLIDE 5 Fuel for Brilliant DECISIONS Fuel for Brilliant DECISIONS CLIENT LOGO HERE ON MASTER

Is there a need? Main Findings in Detail

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Types of Shows or Programs like to Watch

Mini series / Movies Drama / Drama serials Sports Other (Specify 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 34% 39% 15% 32% 32% 33% 39% 25% 17% 6% 10% 8% 4% 15% 11% 1% Watched Favourites 77% 76% 72% 72% 71% 71% 69% 63% 44% 40% 39% 35% 31% 30% 25% 2%

Women claim to watch and love Dramas, Soaps and Miniseries / Movies.

  • QA1a. Which of these types of shows or programs do you watch? QA1b. And which
  • f these types of shows or programs are your favourites?
Based on Genre
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Top 3 Favourites by Show Type

Net Dramas & Soaps Reality/ Celebrity Soaps/ Soap Operas Sports 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 33% 27% 16% 13% 9% 7% 5% 8% 6% 3% 2% 2% 1% 0% Top 3 Favourite
  • QA2. Which television shows were your favourite 3 programs or shows in 2012?
55% 48% 35% 27% 26% 18% 18% 15% 11% 8% 7% 5% 4% 3% 1%

Just over 1 in 2 mentioned an actual Drama or Soap show in their top 3, and 1 in 3 as their most Favourite.

Based on Shows
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SLIDE 8 Fuel for Brilliant DECISIONS B&B 49% of USA Soap Viewers

USA = 63% AUS = 62%

UK = 17% Other = 9% Home & Away 72% of AUS Soap Viewers Downton Abbey 34% of UK Soap Viewers

Top Soaps by Country

Watching soaps

One in 4 women said they watch Soap Operas, among these:

0.25 0.75; 100%

All respondents n=502 Population = 4,520 N= 127 respondents who watch soaps Population = 1,145
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Most watched Soaps in 2012 by Country

The most watched USA Soaps are The Bold and the Beautiful (49%), Days of our Lives (17%) and Revenge (13%). The most watched Australian Soaps are Home & Away (72%), Neighbours (33%) and Packed to the Rafters (18%). The most watched UK Soaps are Downton Abbey (32%), Eastenders (24%) & Coronation Street (20%). N= 127 respondents who watch soaps Population = 1,145 USA = 63% Base 83 Base 80 Base 23 Population 729 Population 722 Population 195 The Bold and the Beautiful 49% Home and Away 72% Downton Abbey 32% Days of our Lives 17% Neighbours 33% Eastenders 24% Revenge 13% Packed to the Rafters 18% Coronation Street 20% The Young and the Restless 10% Winners and Losers 4% Emmerdale 5% Bones 6% House husbands 9% Other 34% Parenthood 6% Offspring 3% Dont know 15% The Big Bang Theory 5% Underbelly 3% Dallas 4% Other 3% Greys Anatomy 4% Dont know 3% How I Met Your Mother 3% Days of our Lives 3% Other 11% Dont know 3% Australian Soaps USA Soaps UK Soaps AUS = 62% UK = 17%
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. . . Australian women aged 25-54 think there is something missing from the current Australian television offering (71%) Is anything missing?

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What’s missing in the current offering?

When asked what, if anything, is missing from the current Australian offering, only 29% said ‘Nothing/Don’t know’, indicating that for 71%, something is missing.

DK/Nothing Quality programming/quality acting and writing/less cheap reality Documentaries/Nature/History Variety Drama/Drama series Comedies/good comedy Movies/Mini Series/Better movies Australian/local content 0% 5% 10% 15% 20% 25% 30% 35% 29% 6% 6% 7% 7% 8% 12% 14%
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. . . Australian women aged 25-54 think the current Australian television offering needs a channel that caters more towards women (31%) Is there a need? Almost

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The current Australian offer

  • B2. How well do you think the current Australian television offering caters to women?
Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 27% 33% 24% 36% 34% 37% 22% 20% 23% 10% 7% 11% 5% 6% 5%

6 6 6

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

Overall, Australian Women give the current television offer for women a 6/10.

All respondents n=502 Extremely well Not at all well
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SLIDE 14 Fuel for Brilliant DECISIONS Seven Nine Gem Arena Other 0% 5% 10% 15% 20% 25% 30% 12% 4% 5% 2% 1% 23% 8% 9% 27% 12% 25% 13% 13% 6% 4% 2% 1% 0% 19% 22% Pay TV Subscribers (n=248) Non Subs (n=254)

Who caters best – Pay TV Subscribers vs. Non Subs

Channel 7 is seen as catering best to women amongst Non subs, Lifestyle the best for Subs – who also rate it higher.

  • QB3. Which television station – on either FTA or Pay TV – do you think caters best to

women?

All respondents n=502 Rating 7/10 Rating 7.5/10
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Interest in channel dedicated to Soaps

N= 127 respondents who watch soaps Population = 1,145 Total Soap Watchers (n=127) Pay TV Subscribers (n=64) Non Subs (n=63) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 34% 40% 31% 29% 34% 27% 11% 8% 12% 11% 3% 14% 16% 15% 16%

6 7 6

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

Around 2 in 3 women who watch soaps are interested in a channel dedicated to Soaps, including 1 in 3 highly interested. Interest is higher amongst Pay TV Subscribers.

Extremely Not at all
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Interest in a channel that focuses on family & relationships

  • QB6. How interested are you in a channel that airs drama, comedies, reality, lifestyle

shows, talk/chat shows and documentaries that have a family and relationship focus?

Total (n=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 39% 45% 37% 31% 29% 32% 16% 15% 17% 8% 5% 9% 5% 6% 5%

7 7 7

NETT Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

7 in 10 women are interested in a channel that airs a variety of genres with a family and relationship focus. Among them, 4 in 10 are highly interested.

All respondents n=500 Extremely Not at all
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SLIDE 17 Fuel for Brilliant DECISIONS Drama/Drama Serials; 12% Soaps/Soap Operas; 9% Mini series / Movies; 13% Lifestyle; 16% Comedy; 12% Crime/Law/Mystery; 10% Reality/Celebrity Reality; 8% Documentaries/Nature/History; 8% Daily Style Chat or Talk; 8% Variety/Talent Shows; 5%

What would women build?

If women could build their own TV Channel catering for women about 1/3rd of all programming would be dedicated to Drama and Soaps, Mini series and Movies.

All respondents n=502 Net Drama/Soaps/Mini series/Movies = 34% Respondents were shown 10 feature genres as ingredients for a channel that catered predominantly for women and asked what percentage of each genre they would include if they were making the channel themselves.
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Could SONY do it? Main Findings in Detail

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Spontaneous Associations with SONY – Word Cloud

  • QC1. Thinking now about the brand SONY. When you think about the brand SONY, what comes to mind?

There is a high free association of SONY with Quality (31%) and Televisions.

* A ‘Word Cloud’ is a visual depiction of the responses to this question. The frequency of mention is indicated by the font size of the word PRE-CONCEPT ASSOCIATIONS
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SLIDE 20 Fuel for Brilliant DECISIONS Non Subs (n=254) Pay TV Subscribers (n=248) Total (n=502) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 15% 21% 16% 43% 34% 41% 28% 30% 28% 9% 10% 9% 6% 5% 6% Strongly Disagree Partly Disagree Neither agree nor disagree Partly Agree Strongly Agree

Could SONY do a TV Channel?

  • QC2. Thinking about the SONY brand, regardless of whether they currently do it or not, how

much do you agree or disagree that SONY could do the following in the future?

Nearly 6 in 10 (57%) think SONY is capable of having a TV channel, and less than 1 in 5 (15%) disagree.

All respondents n=502 3.5 3.6 3.5 PRE-CONCEPT
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Do they like it and will they watch it? Main Findings in Detail

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SLIDE 22 Fuel for Brilliant DECISIONS Respondents were shown a 30 second video featuring a selection of content from the SONY women’s channel, accompanied by a stylised SONY logo and mood music. When the video ended, respondents were shown the 5 feature components again for 10 seconds each.

Visual Stimulus

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Overall appeal

Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 47% 52% 45% 28% 24% 29% 8% 8% 8% 8% 7% 8% 9% 8% 9%

7 7 7

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

The SONY channel was well received, with 3 in 4 (75%) giving a positive score, including nearly (47%) giving a top 3 box score for overall.

All respondents n=502 Very Appealing Not at all Appealing
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What do you like about the SONY Channel – Top 3 Box

  • QD1b. What, if anything, do you particularly LIKE about the channel?
“The variety of women's shows that differ greatly though are all easy shows to get glued too.” “All the good shows on ONE channel so you don't have to go fishing around looking for them!!” “The variety of shows. I could count at least 5 of the shows I particularly like.” “I like a lot of the shows mentioned (eg. grey's anatomy), and I like the sound of the new shows they would like to air. I also like that there would be a channel to play the soaps I miss!” General Content / Programs / Shows 29% Variety / Range
  • f Programs /
Shows 31%
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What type of person would the SONY Channel be?

Loves to entertain Feminine Modern High quality Clever wit Sexy 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 84% 79% 79% 77% 75% 70% 70% 67% 66% 66% 65% 64% 63% 60% 60% 53% 52% 52% 50% 43% 43% 28% All respondents n=502

For 84%, the top personality trait associated with the SONY Channel is “Loves to Entertain”. SONY also has high associations with Accessible (79%), Friendly (79%), Fun (77%) and Modern (75%).

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How would you describe the SONY Channel?

The top description associated with the SONY channel is “Light entertainment – nothing too dark or heavy”. Other high associations include: Offers great TV, particularly escapist drama and comedy (68%), Fun and addictive shows and Features shows with strong, relatable female leads (66%).

All respondents n=502 Light entertainment – nothing too dark or heavy It’s not a 24 hour soap channel Humour that is clever, never crass A guilty pleasure 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 79% 68% 66% 66% 65% 62% 61% 60% 60% 59% 58% 55% 54% 54% 52% 52% 46% 44% 43% 35% 34% 32% 25% 21%
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Channel Diagnostics

Over 7 in 10 agree that they like the idea of this channel and that it would have programs they would like to watch.

All respondents n=502 It looks really different to other channels This channel would be for someone like me It made me feel different about the Sony brand I really like the idea of this channel The channel would have programs and shows I would want to watch 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 54% 65% 63% 71% 76% 19% 13% 26% 13% 8% 26% 21% 9% 16% 16% Disagree Neither Agree 3.9 3.9 3.8 3.7 3.4 Average *Benchmark against best Fox Footy concept = 68%

*

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Likelihood to watch

Total (N=502) Pay TV Subscribers (n=248) Non Subs (n=254) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1 2 3 4 5 6 7 8 9 10 59% 60% 59% 22% 19% 23% 7% 7% 7% 5% 4% 5% 8% 10% 7%

7 7 7

Bottom 3 Box 3-4 5 - Neither 6-7 Top 3 Box Average

8 in 10 women are likely to watch the SONY Channel if it was available, with 6 in 10 highly likely to watch.

All respondents n=502 Would definitely watch Not at all likely to watch
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. . . Prefer the name

SONY Entertainment

Preferred name

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Almost

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Preferred name

Almost 2 in 3 (65%) chose Sony Entertainment as the preferred name

Sony Entertainment Sony Entertainment Television Sony Glow Sony Stella Sony Fling 0% 20% 40% 60% 80% 100% 65% 60% 47% 29% 27% 27% 18% 16% 11%
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Will it build subscriptions? Main Findings in Detail

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Acquisition / Retention Propensity – Foxtel

This chart is based on the Foxtel propensity model of assessing net scores of 6-10 for Acquisition amongst Non-pay TV Subs, and 0-4 for Retention of Pay TV Subs after seeing and considering the Sony TV Channel concept. 0-4 Retention / Churn 6-10 Acquisition 0% 10% 20% 30% 40% 50% 4.4% 27.0% 4.3% 21.2% Resting Propensity Concept Propensity All respondents n=502 Resting Propensity = prior to concept Concept Propensity = after concept
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More on Retention

Firstly the Sony Concept impacts positively on the retention of those most vulnerable.

Interestingly, mapping Resting Propensity with Concept Propensity for RETENTION, shows quite significant upward lifts for the most vulnerable – i.e. all resting scores of below 6 increase. All Pay TV Subs n=248 100 200 300 400 500 600 700 1 2 3 4 5 6 7 8 9 10 6 6 5 7 7 6 7 7 8 8 9 Population CONCEPT PROPENSITY RESTING PROPENSITY 000’s Definitely Not at all Definitely Resting Propensity = prior to concept Concept Propensity = after concept
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Where does behaviour change?

Most likely to Churn Less likely to Churn Less likely to Acquire Most likely to Acquire

  • But isn’t behaviour more likely to occur at the extreme ends of the propensity scale?
  • What would the net impact on subscriptions look like using a conventional Top 3,

Bottom 3 Box Approach?

Indifferent 1 2 3 4 5 6 7 8 9 10 Acquirers Churn Risk Churners Acquire Potential Passive

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Top 3 box propensity model

An alternative Top 3 (Acquisition) - Bottom 3 (Retention) model shows;
  • A 1.2 percentage point decrease in the Retention / Churn proportion; and
  • A 1.7 percentage point increase in the Acquisition proportion,
All respondents n=502 0-2 Retention / Churn 8-10 Acquisition 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 3.2% 3.7% 2.4% 5.4% Resting Propensity Concept Propensity Net 3 percentage point increase in subscriptions (5.4 Acquire – 2.4 Churn)
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Projected Subscriptions

Using past OZTAM data as the base shows a realistic survey estimation of future subscriptions using the resting propensity (29.3%). Adding the Sony Channel to the subscription environment shows a result that is better than the baseline (31.8%). Qtr 1 '11 Qtr 3 '11 Qtr 1 '12 Qtr 3 '12 Qtr 1 '13 Qtr 1 '14 Sony Channel Proj 25% 30% 35% 29.6% 29.8% 30.1% 30.1% 29.9% 29.7% 29.2% 29.2% 28.8% 29.3% 31.8%

PAY TV Penetration Estimates & Projections (Using Top 3 / Bottom 3)

QTR 1 2014 Prediction = QTR 1 2013 (28.8%) + (Acquire (3.7%) - Churn (3.2%) ) (Based on women only)
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Conclusions and Implications The Way Forward

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Is there a need?

What's missing: Australian / Local Content (14%), Quality Movies / Mini Series (12%), Quality comedies (8%), Drama (7%) and Variety (7%).
  • 7 in 10 women think that something is
missing from the current Australian TV
  • ffering.
Overall Channel 7 is seen as catering best to women, although Lifestyle is seen as #1 amongst Pay TV Subscribers. What’s Missing Catering to Women CONCLUSION: Australian women do feel that something is missing from TV, and rate the current attempts to cater to women as average at best. Subsequently many think there is room for a channel more dedicated to their gender.
  • When asked almost 1 in 3 (31%) women
aged 25-54 think there is need for a channel that caters more towards women. Is there a need?
  • Women give a 6 out of 10 to the current
efforts of TV to cater to women, including nearly 4 in 10 (37%) who rate it a 5 out of 10
  • r less. There is clearly plenty of room for
an improved offer.
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Could SONY do it?

SONY already has a strong association with QUALITY and TVs.
  • A majority (57%) of women agree that
SONY could do a TV Channel. In addition it was seen as providing: light entertainment, not too dark or heavy (79%), a great escape (68%), with fun and addictive shows (66%) and strong relatable female leads (66%) – but importantly still accessible to a broader audience (60%). SONY & TV SONY Personality CONCLUSION: SONY is well positioned to deliver a TV channel to the Australian female market and would benefit from its existing quality and entertainment heritage.
  • SONY currently is more associated with
electronics and in particular TVs, but can clearly stretch into the realm of a TV channel as evidenced by its acceptance and ability to demonstrate a love of entertainment. Could SONY do it?
  • Personality wise - the Sony Channel itself
was seen as: Loving to entertain (84%), Accessible (79%), Friendly (79%), Fun (77%), and Modern (75%).
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Would they watch it?

Almost 1 in 2 (47%) women aged 25-54, gave the SONY Channel an appeal score of 8 or more!
  • The SONY Channel as presented has great
appeal with a mean appeal score of almost 7
  • ut of 10.
The SONY Channel was also seen as: having attractive programs (76%), being relevant (65%), and differentiated (54%). Is it Appealing? Do they like it? CONCLUSION: The SONY Channel as presented is well liked, has great appeal and would be watched if available.
  • Watching propensity is high assuming
availability with an average score of over 7 (where 10 is definitely watch) – a majority (59%) gave a watch propensity score of over 8 out of 10. Will they watch?
  • Overall the SONY Channel was really liked
(71%).
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Would it drive subscriptions?

Using a bottom 3 box approach to retention (i.e. those most likely to churn) shows a 1.2 percentage point decrease in the Retention / Churn proportion.
  • Although on average a fairly flat effect on
retention scores, the SONY channel does provide marked uplift in intended retention amongst those currently most vulnerable. Using the top 3 box approach to acquisition (i.e. those most likely to subscribe) shows a 1.7 percentage point increase in the Acquisition proportion. Does it Retain? Does is acquire? CONCLUSION: The SONY Channel as presented has potential to both Retain and Acquire subscriptions.
  • Based on a calculation of Acquisitions minus
Churns, shows a potential 3 percentage point increase in Subs using the top 3, bottom 3 approach. Does it build Subs?
  • The SONY channel also has the potential to
attract new subscribers.
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