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Deep Dive

Foxtel's Streamotion unit builds Binge brand with a splash of emotion, a sprinkle of Prof. Byron Sharp, Peter Field and a whizz from a Customer Data Platform

By Paul McIntyre - Executive Editor

22 June 2020 6min read

Binge marketing: subscriber "churn" is old school. "Pause" is the new term for consumer promiscuity in streaming.

By Paul McIntyre - Executive Editor

22 June 2020 6min read

Foxtel's top brass at Binge are banking on the marketing gurus being right about building brand distinctiveness and using emotion to drive consumer mental availability over rational benefits. And they're blending it all up with a home-built Customer Data Platform [CDP] that uses the mobile phone as the single customer ID to personalise messages and understand content consumption patterns down to the individual. Whether it works or not, this could be a case study for the ages.    

Foxtel’s belated crack at the crowded streaming entertainment category launched three weeks ago with its infant brand Binge. 

Much of the media noise to date has been around whether it’s too little too late from the lumbering pay-TV operator versus the new establishment of Netflix, Stan, Disney+, ViacomCBS’s All Access and others. But Foxtel’s Streamotion, the team behind Binge and its sporting sibling Kayo, are putting leading marketing academics to the test and the adopting the new rage from companies with large volumes of customer data to structure around a centralised Customer Data Platform (CDP).

“We’re late to the party,” admits Binge and Kayo chief commercial officer, Ant Hearne, a former APAC and US exec with content marketing network Outbrain and most recently in New York with the e-commerce marketing technology start-up ROKT, founded by former Jetstar CEO Bruce Buchanan with a private investment from Lachlan Murdoch. 

Hearne follows Neil Robinson as another expat Australian ROKT executive in New York who has returned to News Corp’s Australian camp. Robinson returned as Managing Director, Digital Solutions, in 2018.

Hearne witnessed first-hand the streaming boom in the US and remains convinced there is room for yet another Australian streaming service. Australians, he says, are following US and UK consumers who have close to four streaming products in their repertoire. 

 

“People come into the NRL season and then they hit pause when it’s over [but] very effectively and cost efficiently they come back at the start of the next season. So this idea that churn equals bad is not so. ‘Pausing’ [your subscription] is absolutely going to be part of our marketing effort.”

- Ant Hearne, Binge and Kayo chief commercial officer

Lockdown uplift and why churn is okay

Although market scale and commercial viability are entirely different scenarios between the US and here, Hearne cites a Google Australian consumer research study of 1,600 respondents which shows the number of people who said they had at least one streaming service had shot to 72% in May this year, up from 60% in December last year – much of it to do with COVID-19 lockdowns. But there was also an increase in the number of people who had multiple streaming services, lifting from 2.1 to 2.9 over the same period, according to Google’s research. In the US and UK, Hearne says the multi-streaming service figure is in the “mid to high threes” per subscriber.

It gets Hearne quickly to what he says is a now an old world view of subscriber “churn”. 

Subscriber “pause” is the term to replace churn as viewers move back and forth and in and out of rival services. In the case of Kayo and sport, fans sign-back up as the codes boot-up for their season competitions.

“People come into the NRL season, for example, and then they hit pause when it’s over,” says Hearne. “What we’ve found is very effectively and cost efficiently they come back at the start of the next season. So this idea that churn equals bad is not so. In the telco world that’s correct because you typically lock into contracts. It’s just not how people interact with us. It’s an important part of the different brand relationship that I think streaming services have. Pausing is absolutely going to be part of our marketing effort.”

 

THE PULSE

Quick question: Sink or swim? Can Brand Binge cut it with the streaming set?

Choices

“We’re talking about building Binge out on emotion. A lot of others like Netflix are more functional. We’ve really built the heart of the brand around the sense of indulgence and escapism that comes with streaming.”

- Louise Crompton, Binge chief marketing officer

Playing on emotion

Outside of the core pillars of the Binge content line-up and the platform design and user experience – most of the critics to date have been kind on these two fronts - Hearne and Binge chief marketing officer, Louise Crompton, have a massive and fast job to do on building the Binge brand. 

Their strategy is to deploy the emotional benefits of streaming versus the functional merits of content and on-demand viewing they say dominates their rivals marketing. And the early learnings from the internally built customer data platform used for Kayo will transfer to Binge. 

Kayo, for instance, knows that an NRL or AFL club fan will respond to a text or email offer to sign or resign just hours or a day before their team is set to play - but not days. These sorts of data-led efforts will transfer from Kayo to Binge although Hearne says Kayo already has taken some Bringe brand building lessons onboard.

 

The mobile phone as customer ID

On its data strategy, Streamotion, like Nine’s rival Stan, has built its own customer data platform centred around the mobile phone number as the single customer ID.

“We’ve largely built our CDP internally and plugged in a whole lot of best-in-class independent technologies to do different things,” says Hearne. “We’ve still got a lot of work to do but that capability that’s applied to a Kayo subscriber we can then apply to a Binge subscriber in personalisation and how we leverage technology to find lookalike audiences and how we effectively acquire customers. 

“We’ve also got a big job to do there with Kayo around pulling the emotional levers. We’ve been pretty rational with that brand for the right reasons - to get the low hanging fruit of the real sports fanatics,” adds Hearne. “But for us to broaden out that appeal and broaden the potential buyers in that category we’ve spent a lot of time thinking about Byron Sharp and some of his thoughts [at the Ehrenberg-Bass Institute] and this whole idea about how mental availability and physical availability play an important role in how we look at structuring our marketing.”

 

Luxuriate in the Binge

Binge CMO Louise Crompton says Peter Field and Les Binet’s work on emotional creativity and long term brand building investment versus short-term retail and performance marketing, and the work from Ehrenberg Bass work around “distinctiveness” has also played a central role in building the marketing and brand strategy for Binge.

“I’m a great believer in brand needing to be present all the way through the [marketing] funnel,” she says. “But if you look at it in a pure sense, in perhaps the way Field and Binet do, then we’re somewhere around 60% brand and 40% brand response or retail. Now the interesting thing here is when you talk about emotional positioning, differentiation or distinctiveness – depending on which marketing guru you’re thinking of, we’re talking about building Binge out on emotion.

“A lot of others like Netflix are more functional. We’ve really built the heart of the brand around the sense of indulgence and escapism that comes with streaming. We’ve got a job to do first and foremost in introducing the brand. Netflix is obviously an established brand so we have to do that and do it quickly and that’s where we think talking about the emotional benefits of streaming will help us do that. The rational benefits are pretty clear: the world’s best shows for only $10 per month. That’s pretty clear. It’s about breaking into the feeling of what it means to get to the end of the day, get the kids into bed, sit down with your wife or husband and just indulge and watch one more show and one more, guilt-free. We also need to establish our leadership position from a content perspective.”

The brand campaign launched earlier this month from independent shop, The Hallway.

“I don’t think in this technology business you can ever rule anything out forever … But at this point there are absolutely no plans to add an advertising layer into our video on demand.”

- Ant Hearne, Binge and Kayo chief commercial officer

Ads and cannibalisation

If Binge does get traction, Hearne, unlike his rival at Stan, doesn’t rule out introducing an ad-supported product. “I don’t think in this technology business you can ever rule anything out forever,” he says. “Things are moving very quickly and we’ll keep looking at what people want and how things can be packaged up. But at this point there are absolutely no plans to add an advertising layer into our video on demand.” 

Hearne happily sidesteps any questions on the impact Binge and Kayo might have on the Foxtel mothership with a traditional pay-TV set-top box offer. “We don’t work on any of those Foxtel brands,” he says. So we don’t see any of those numbers. We have no visibility to what their projections will be for the marketplace.”

It can’t be pretty but it’s why for Binge and Kayo that Hearne and Crompton need those marketing gurus – or at least their execution - to be right. The next 12 months will prove quite the show. 
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By Paul McIntyre - Executive Editor

22 June 2020 6min read