New DMX Boast: Were Not Radio

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Digital-audio service DMX took a shot at "boring radio
playlists" with its latest attempt to invigorate its product.

The service took a cue from radio-research firm Gavin
Reports, which has shown, through surveys done over the past two years, that ownership
consolidation has led to more conservative programming. Moreover, a rise in syndicated
programming has also reduced localism and irritated listeners, Gavin has found.

In the past, DMX's marketing focused on trying to explain
what it was: music transmitted via cable in clear digital sound. The new campaign will
highlight what it's not: radio, with its talky disc jockeys, homogenized sound and large
commercial blocks.

DMX is not likely to take out huge blocks of time on local
airwaves: Its materials include black, tombstone-shaped stickers bearing the slogan,
"R.I.P Radio."

The campaign comes at an interesting time for the service,
as its growth has been stagnant, said Christy Noel, DMX's senior vice president of
marketing and programming.

Globally, Liberty Media Group-owned DMX is in 3.5 million
homes, but only about 200,000 of those are analog customers.

Executives thought that the premium analog version of the
service would "go away" with the launch of DMX as a digital network. But
operators said DMX has a very high satisfaction rating among its premium users, so analog
sales will continue.

The problem for operators, however, continues to be sell-in
and retaining executives' interest in the product in the face of competition from other
expanded-basic offerings, Internet services and cable modems.

Channel capacity also continues to be a barrier in
nonupgraded systems. For instance, American Cable Entertainment in San Bernardino County,
Calif., recently dropped digital audio in favor of more video fare until it can complete a
rebuild.

"The subscribers who had it loved it: There just
weren't enough of them," said Ron Stark, the system's marketing manager, adding that
he hoped to restore DMX after the rebuild.

With multiple products, marketers added that operators may
also be getting to the point where they must decide whether to drop a service or to go to
multiple bills to avoid sticker shock.

"Somehow, two $50 bills arriving at different times of
the month seem smaller to some people than one $75 bill," Stark said.

The new DMX campaign includes simplified training manuals
and materials emphasizing the eclectic genres available on the audio service.

To operators, the audio service is emphasizing its
"PowerPick" technology, which lets local systems program only the genres of most
interest to their particular demographics. This feature allows cable operators to
differentiate their audio product from national offerings by direct-broadcast satellite
companies or other competitors.

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