Is channel growth music to the ears?
As BSkyB prepares to launch three music channels into an increasingly crowded TV market, Amanda Wilkinson looks at what they hope to gain
Once there was only one music TV channel, the iconic MTV. However, now there are more than 20 available, with BSkyB the latest media owner intent on entering the genre with three tightly targeted channels.
BSkyB last week unveiled the long-awaited details of its three new channels - Scuzz, for 15to 19-year-old male fans of rock acts such as Foo Fighters and Queens of the Stone Age; Flaunt, aimed at 13to 16-year-olds girls with a passion for Justin Timberlake, fashion and gossip; and The Amp, for men aged 25 to 29 years who are fans of non-manufactured music such as Oasis and Coldplay.
When the channels launch in April they will not be the only newcomers to the sector. GWR launched Classic FM TV in January and Chart Show Channels is trailing a new channel called The Video Vault.
For advertisers, BSkyB's new channels offer greater choice, but Bernard Balderston, head of UK media at Procter & Gamble, says: "They sound very, very tight in terms of demographics. I can only speculate that BSkyB has taken the view that they represent a potential niche in a very crowded market."
His views are echoed by Chart Show Channels chairman Keith Macmillan who claims: "I am surprised that they think they can focus the channels that much. I wonder whether they are carving up their audience too finely."
But Barnaby Dawe, head of marketing at BSkyB, says: "In reality the channels will attract a much broader audience."
BSkyB is likely to target telephone companies, toiletry manufacturers and fashion brands to advertise on Scuzz and Flaunt, and alcoholic drinks brands and car manufacturers for The Amp. But its channels will be competing against those of Viacom-owned MTV UK & Ireland, which have dominated the genre for more than 15 years in the UK, firstly launching MTV, then sister channels MTV2, MTV Hits, MTV Base, MTV Dance, VH1, VH1 Classic and The Music Factory.
But over the past two years it has had strong competition from Emap, which has extended its radio and magazine brands into television, creating seven channels - The Box, Smash Hits, Kiss, QTV, Magic, Kerrang! and The Hits.
In 1997 there were only two music channels - MTV and VH1 - taking a 2.3 per cent share of 16to 34-year-olds in multi-channel homes, compared to 4.5 per cent last year when there were 16 channels, according to BARB. But the growth may not continue.
"It doesn't seem to me that the new channels will expand the market," says Andrew Canter, head of broadcast at Media Planning Group. "The market probably won't be able to support all of them."
Emap and MTV stand to lose the most when it comes to the popular music TV channel market. When comparing the main two, MTV and Emap, with the Chart Show for the months of January and February, MTV's channels took a 66.7 per cent share of commercial impacts in the 16to 34-year-old age group, while Emap's channels took 32 per cent and the Chart Show 1.3 per cent, according to BARB.
There are other issues at stake. BSkyB chief executive Tony Ball has made no secret of the fact that he wants to reduce the amount of money paid to third parties, such as MTV, to carry their channels. MTV is paid a fee for each subscriber. This fee was set some ti
me ago when it was the only player in the market.
Emap is faced with the worrying prospect of BSkyB as a direct competitor selling its channels' airtime for a percentage. Industry experts say that the "conflict" could force Emap to move TV sales to another sales house, perhaps IDS, or in house - enabling it to sell advertising space across all its products, TV, magazines and radio more easily.
The conflict could be even greater than at first appeared. BSkyB has not only developed channels that overlap to some degree with those offered by Emap, it has signed up media partners in the form of XFM, the radio station owned by Capital Radio for The Amp and music magazine Pop World for Flaunt, to provide cross-promotional opportunities, content for websites and interactive services.
As more channels enter the music sector, the advertising cake will be sliced even more thinly. To counteract this, channels are developing other sources of income such as telephone voting and record sales. BSkyB will offer interactive services such as games and on-screen messaging as a way of increasing the annual revenue per user.
David Peters, broadcast planning director at Carat, says: "We have done our own research on attention levels and music channels quite often are seen as default channels viewed when there is nothing else on that people particularly want to watch."
This is not good news for advertisers, but the channels still appear on media schedules because the reality, say TV buyers, is that they offer similar audience profiles to Sky One and E4, but are cheaper.
Some channels, such as MTV, have started featuring content tailored to viewers, as opposed to wall-to-wall music videos, in order to create appointments to view and longer viewing experiences.
As music channel viewers tend to flick between channels, there is no doubt that BSkyB's new channels will attract an audience, but whether they will create a loyal fan base remains to be seen.