Network Insight Institute

Scott Lindsay

Scott Lindsay, General Manager, Domayne

Have you every played a game of Chinese Whispers? Then imagine the life of a sales person. Take one government who will come up with a message. Pass that out to five networks who will all put their interpretation on the message and the services they will provide. Pass that on to 12 suppliers who will, depending on the digital equipment they supply, come up with their view as to what will happen with digital TV. Then try and pass it out to approximately 4,000 retail shopfronts, with about five people on average. So about 20,000 sales staff out there across Australia have to deliver the digital message to consumers.

Add to this newspapers and print media, putting their spin on the fallout of digital television and in some cases not presenting the most positive slant on things. Add to this direct government input through the media. Also add the networks getting information directly from sales staff. The result is that the message being conveyed about digital television in Australia over the last few years has been somewhat of a confused one for retail sales staff.

In addition, there is considerable variation in the retail landscape in Australia: there are small independent specialists, like Len Wallis on Sydney's North Shore, who specialise in the top end consumers; medium size electronic chains like Bing Lee who sell electronic appliances to consumers across NSW; large electronic chains like Harvey Norman who have staff working across various categories and merchandise; large electrical buying groups like Retravision owning 500 stores across the remotest parts of Australia and also in the major metropolitan areas; and, department stores like Grace Bros Myer. These retailers have a workforce made up of full-time, part-time, and casual staff, as well as older staff, younger staff, tech-savvy specialists, electrical sales people; and casuals who are filling in because they usually work in the shoe department. So put all of that together and the message getting out to the consumer can be the most varied you will ever get in any Chinese whispers game.

So in assimilating this with what the retailers have to look for, of primary importance is the 'what's in it for me' factor. And what's in it for retailers is sales of widescreen premium TV sets, plasma TV sales, wide screen CRT, LCD and DLP projectors, which has captured the imagination of retailers across the country. Sales of TVs are all about getting a better picture, and a better sound in a cinema-like experience to the consumer. This is where digital TV fits in. Retailers are trying to get across to consumers a whole cinema experience.

The figures presented earlier by Peter Webb demonstrate what's happened with DVD sales in Australia. It is clear that the message has reached many consumers that they can enjoy wide screen pictures with fantastic Dolby digital surround sound in their home and in big screen format. By using digital STBs, consumers can now enjoy these same benefits of DVD technology across their free-to-air network broadcast. So what consumers are able to do now is take free-to-air and match it to the experience that they had already been getting used to with DVD product.

In effect, this is all about raising the bar of the experience for consumers. Customers often ask us whether they really need high definition TV and whether there will be any substantial benefits from this. We try to relate the experience to the process of progressing from black and white to colour TV. When we got colour TV, there was no going back to black and white. Similarly, we then progressed from VHS to the DVD experience and wide screen technology. Adding to this whole experience both standard definition and high definition broadcast, people are experiencing in their homes a cinema-like experience like they have never had before. Once consumers experience this both in retail stores and in their own homes there will be no going back; and some time in the near future people may wonder how we ever lived without the benefits of digital technology.

Retail training has been the major focus of the last three to four years. Suppliers like Panasonic, Sony and Thomson have provided ongoing training to our sales staff all across the country in various formats, in big group meetings and also at store level. Broadcasters have done a fantastic job of inviting sales staff in metropolitan areas along to the premises to experience what's happening in the sound studios and adding to the buzz of the whole TV experience. The other major thing the broadcasters have done is showing the sorts of investment that they have been making behind the scenes in their broadcast equipment. This sort of training by both broadcasters and suppliers will be an ongoing need during the turnover that we experience in retail.

There have been some negative influences been on the retail floor:

• the print media in attempting to raise many doubts about the commitment of both the government and the networks to digital broadcasting, and HD in particular, which has contributed to some negative influences amongst the sales staff;
• the removal of extra channels from the ABC most recently has also had a small negative impact, as it was a major selling feature adding to the stable of benefits we could offer with digital TV;
• the initial limited range of digital equipment in the early days also hampered some of this growth, as did the initial lack of widescreen content;
• the initial price of a STB, being around $800 for HD, which is equivalent to what most people are prepared to spend on a 68 cm TV, was also a negative influence;
• the early experience with widescreen TV, which came quite a few years before DVD and digital TV, and when there was no widescreen content of any sort, also sat in the memories of many sales people.

But amongst this there have been many positive influences:

• HD content meeting its 1st July commitment to start broadcasting of this 1040 hours a year on each of the networks;
• visits to the networks to see first hand the equipment investment being made by the broadcasters;
• raw product entering the market both in STBs, integrated digital TVs and widescreen TVs;
• major brands entering the STB market like Sony, Samsung and Panasonic, which have added to the positive influences;
• the falling price of wide screen plasma TVs entering the mass market has increased sales of these products significantly;
• training and information materials supplied by DBA who have worked behind the scenes to co-ordinate the efforts of suppliers, broadcasters and retailers to get a single message out there to sales staff;
• the commitment by the networks for wide screen local production;
• lastly, the provision of wide screen HD channels to expose the possibility of a HD picture in retail stores has been nothing short of impressive.

So we are turning the corner. We have a growing product availability. We have years of commitment to digital TV. We have training and product experience widening across most retailer; and now retailers have been selling the product for almost two years. We have more consumers getting used to the experience in their own home. All of these things combine to make me feel confident that out there in retail land the mixed messages, the Chinese whispers, are slowly coming into a single funnel which means that we have turned the corner and retail sales of digital equipment are in good hands.

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