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04.04.2013
Originally featured on BroadcastEngineering.com
OTT: The new battleground for UK retailers

UK retailers are piling into web TV as a new market in its own right but also to drive sales in their stores through targeting and promotion.

UK supermarket group Tesco, which  has expanded from groceries into a broad range of consumer good from TVs to fashion clothing, has taken the lead after striking a new deal with BBC Worldwide, the BBC’s commercial arm. The agreement makes a large part of the BBC’s programming available to Tesco’s ClubcardTV, which launched recently as an ad supported OTT service, including many popular cookery, comedy and drama programmes.

This is available exclusively to Tesco’s 16 million Clubcard members, including both regular and occasional shoppers at the superstores, which provides the basis for targeting of both adverts and promotions. Through its Clubcard loyalty card Tesco has details of each member’s purchasing history, which is being used to drive ad targeting, with the first advertising partners including several known brands such as Kellogg’s and Colgate. But Tesco can also use the service to target individual promotions or adverts of its own products on the basis of demographics and purchasing habits.

Tesco’s launch of ClubCard TV, powered by Microsoft’s Silverlight  multimedia application platform, followed its acquisition of the popular online video service Blinkbox in 2011, which brought in thousands of TV episodes and movies following deals with Aardman, Endemol and Warner Bros.

“The reason we can offer great programming for free is because customers will see relevant advertising before and during the movie or TV show they are watching,” said Michael Comish, CEO of Tesco Digital Entertainment. “We’ll use Clubcard data to tell us what might be relevant for our customers and therefore help us deliver a more personalized service.”

Tesco’s arch rival Sainsbury’s is also offering movie and TV content online, although only so far on-demand, following a deal with  entertainment firm Rovi. This is part of a general push into digital entertainment for Sainsbury’s, after buying e-book firm Anobii and music download site Global Media Vault mid 2012. These have all been integrated into Sainsbury’s Entertainment brand, launched in 2010 in an effort both to align with changing consumer habits and fulfill rising demand for digital services.

Whether these retailer offerings will seriously trouble the UK’s OTT market leaders Amazon’s Lovefilm and Netflix, which now have around 3 million UK subscribers between them split roughly 50/50, remains to be seen. Certainly they are not yet making money, but then they also double as marketing and sales promotion vehicles and are becoming essential tools for communicating with customers in the digital age.



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