The Purchasing Power of Entertainment Escapism1 Jul, 2013 By: Patrick Cauley Response
Whether buying from Tinseltown or Motown, the direct response marketing entertainment category remains viable and
strong even amidst today’s ever-evolving media landscape.
While it’s often said that entertainment spending tends to stay up in a down economy given the escapism element it provides, ironically, no product category’s distribution and purchase methods have been altered or affected more radically by recent media and technology advancements.
What started with Napster-style shenanigans eventually led to legitimately new, evolving kinds of business models like iTunes, Netflix and Hulu, to name a few. In fact, according to a new report from PricewaterhouseCoopers, online purchases of movies, music and other forms of entertainment will rise to 43 percent of consumer media spending in 2017 — from less than a third in 2012.
But while popular perception may pigeonhole direct response products into the fitness, housewares and beauty categories, one segment of the industry that’s been showing consistent growth happens to center on all things entertainment.
And, if you can reach the right sweet spot with your target market, the entertainment products featured in direct response television campaigns still provide a unique, nostalgic experience unlike the sometimes cold, less satisfying experience of buying one song online that quickly loses itself among the other flavors of the month you’ve downloaded. In order to effectively capitalize in this market, it’s imperative to understand the way it has changed.
A New Landscape
“The change in the entertainment category is opposite of what you see at the top level,” says Jeffrey White, CEO of Philadelphia-based IMS Media Analytics. “Generally, long-form has been declining, while short-form has grown. But, it’s been the opposite in the entertainment category. There are certainly more short-forms being shot and broadcast, but if you look at the dollars, there are still a fair amount of dollars going toward long-form.”
Some view the category as more stable, rather than growing. “When looking at the past five years, the quantity and quality success of long-form DR entertainment productions, whether it’s music or video compilations, tend to be similar,” says Clare Kogler, president of Tustin, Calif.-based Jordan Whitney Inc.
However, Kogler has seen a slight decrease in the number of entertainment infomercials that are running with enough frequency to be ranked in the Jordan Whitney report each week. The high was 18 in 2010, 14 in 2012 and 12 so far this year. “Time-Life continues to be the primary producer of music packages, which air the most frequently. Interestingly, five of its entertainment productions in 2012 were among our ‘Top 100’ for the year.”
Kogler claims that typically only one or two entertainment shows air with enough frequency to appear on the rankings, but contends the rise in the entertainment category’s success may be partially because of an overall a decline in new infomercials.
While music collection short-form spots reigned supreme in the past, they’ve certainly declined in recent years. “In the short-form arena, we are seeing far fewer entertainment offers. This, we believe, is due to the change in the music delivery system with downloading to computers and mobile devices being preferred by a majority of music purchasers,” says Kogler.
In fact, music purchases in the U.S., including tickets to live performances, are reversing the multiyear slide caused by illegal downloads and collapsing compact disc revenue. Domestic purchases will rise to $16 billion by 2017 from $15.1 billion this year, driven by digital downloads, streaming services and higher ticket prices, according to a recent AdAge article.
However, short-form spots are not to be dismissed entirely in the entertainment category. “On the short-form side, you still see quite a bit on what we call ‘the psychics,’’’ says White. In fact, the top- and fifth-ranked entertainment short-form spots in last month’s IMS rankings were for “California Psychics” and “Hollywood Psychics,” respectively.
If you’re looking to break into the entertainment category using DRTV, as usual, the first thing you need to know is who your customer is. “Our overall demographic is from late-40s to well into the 70s. The average age of our customer falls right around 55 years old,” says Christopher Hearing, president of Time-Life/Direct Holdings Global. “The overall demographic is a little more female than male, but not dramatically. That is very, very product specific. Some of our military products are 95-percent male. And some of our romance products are skewed in the other direction. The income demographic is right in the heart of America. The quintessential American family is who we’re selling to.”
Once you understand who your audience is, the next natural question is figuring out what it is they want. “Music is still the top driver in long-form: the compilations, the greatest hits concepts and a lot of country. We are seeing that being a strong sub-category within the music sector,” says White.
Kogler concurs. “The target audience for music packages of the sort sold by long-form DR is aging. This is reflected in the offerings that succeed best: nostalgia and country,” she says.
Hearing says that what works is something where you can elicit passion. “When we think about selling our nostalgic collections, it’s all about making some connection to the consumer’s heart, selling romantic songs from the ’60s and ’70s,” he contends. “Consumers inevitably say, ‘You got me to pick up the phone and call or go on the Web to place an order when I heard the song I had my first kiss to,’ or ‘our prom theme song,’ or whatever it was. It was something that made a very personal connection with consumers. It also applies to video products. We hear our ‘Carol Burnett’ consumers all the time: ‘I remember with my parents or grandparents watching it on Saturday nights.’ It’s that nostalgic hook that we play on very heavily.”
However, the tricky thing about entertainment is that it all boils down to individual’s taste. And when considering decades of extensive entertainment choices, who is to say what exactly will catch?
“Fundamentally, when we are looking at the broad array of products that we can bring to the marketplace, we’re looking for a product where we can bring something extraordinary. Our producers here have incredibly deep knowledge about both the music and video sides of the business. They know where to go find pockets of material — hard-to-find or never released before. So it’s something that’s going to resonate with consumers in a way that they might not be able to get anywhere else,” says Hearing.
For instance, Time-Life recently released a complete set of products surrounding “China Beach,” a TV series from the late 1980s — products never before released on DVD, all re-mastered with extended bonus features attached, including books and signed scripts as part of the package.
“As a very general rule of thumb, we’re looking at products that are 20 years old or older. The majority of consumers associate their music choices with their high school and college years. That’s when they’re thinking nostalgically about music. The intersection of those years with people reaching their direct response buying years is about 20 years post-graduation from high school. So, we’re looking to promote to people who are in their late 30s and into their 40s and beyond, because those are the people who are really responsive in the marketplace,” says Hearing.
Once you have the collection you’ve decided to bring to market nailed down, how do you appropriately position it within your creative to make sure that it connects with viewers enough to elicit a response and purchase?
“The trick in being successful with a typical music collection, which has 150 to 180 songs, is finding that 20 or 30 that you’re actually going to play in the infomercial. There are a huge number of choices. They’re all top songs; most of them were No. 1 hits at some point. How do you wean that down to the 20 percent or the 15 percent that you’re actually going to show on TV?” asks Hearing.
He continues, “That’s what our producers do. We don’t outsource that part of the business, because they have such a deep knowledge about what does connect with consumers, what was important back in that time. That’s really the magic in making the programs work.”
Targeting the Flops
For every success that surprises studio and label executives across the board, there’s always a “Snakes on a Plane”: the flop that leaves the once confident marketing team scratching their heads.
“What doesn’t work for us is mass appeal. We are not going to compete with the record labels. We’re not breaking new artists; we’re not putting collections of songs that have been released in the past 10 years because they’re still on the radio. And there’s nothing nostalgic about it yet,” says Hearing.
He referenced a country music program infomercial two years ago titled “Country USA” that people across the board thought would be a surefire win. “We had Larry Gatlin as a host. He was on a bus across America and went to all these great American scenes. He was talking about the music, and it really was just a great collection of country music songs across a whole range of time, and it didn’t work,” Hearing says.
The company was “dumbfounded” he adds. “When we went out and did research and tried to figure out why it didn’t work, it wasn’t focused enough! It spoke a little bit to everybody, but it didn’t speak deeply to anyone specific. And as the business continues to change and continues to evolve, that’s what we’re finding. We have to have deep conversations with our consumers. It’s not a mass-market product we’re selling. It’s really a niche product that is focused in an underserved market, targeted to a specific group of people,” Hearing says.
“The over-50 audience will continue to be a target for nostalgia and country packages — both of music and older TV shows on video,” Kogler says. “These seem to work best in long-form. Younger purchasers, and no doubt some older ones as well, will move more and more to downloading, which allows them to buy individual songs rather than albums.”
In fact, U.S. consumer spending on media and entertainment will increase 4.8 percent per year through 2017, with digital consumption finally rivaling physical sales, according to PricewaterhouseCoopers.
However, DR entertainment products have the potential to be one of digital’s few rivals left given the differentiated goods they provide. “We have to constantly be focused on providing services and products that provide more value to our consumer than just downloaded songs,” Hearing says.
He adds, “A typical consumer can certainly go out and re-create any of our CD packages. What we have to bring to the market — and what differentiates us from an iTunes — is the editorial standard that we set. If you buy something from us, you’re getting the absolute best. You know you’re getting the original recording, which is not always easy to find in a download scenario, and also the added value stuff that we bring in. So on a per-song basis, were actually very competitively priced with iTunes, but were selling to our consumers a package of songs plus ancillary materials. If they want to listen to their music digitally, then that’s fantastic. But we really provide to our consumers something that they just can’t get digitally, which is something that the record labels really struggle with.”
Additionally, while a lot of the DR entertainment category may focus on a slightly older demographic now, marketers must also remember that there are bright spots with the younger demographic, as well as the fact that they will eventually be the core DR demographic one day. “We are seeing some new entries and growth in kids’ toys and gaming subscriptions,” says White.
Moreover, marketers will still be able to reach these consumers through television advertising — it’s simply that the screen that they’re viewing it on will change. U.S. TV advertising will rise 5.1 percent annually to $81.6 billion in 2017, with more consumers watching on iPads and smartphones, according to PricewaterhouseCoopers.
As the times change, certain products will always come and go with demand, but one thing’s for certain: entertainment is something consumers will never be able to live without. ■