||Cable Companies Bundle Up New Sponsorships
Cable Companies Increase Sponsorship Activity to Promote New Products, Support Local Positioning and Gain Content for Video-on-Demand Service
New product offerings and increased competition are driving new sponsorship activity in the cable category.
Although cable operators have historically used sponsorship to support their local positioning and fend off competition from Dish Network Corp. and DirecTV Group, Inc., the category could soon get a boost from another competitor: online video services.
Indeed, Netflix, Inc., Hulu, LLC and other streaming video companies represent a new source of competition for the cable industry as more and more consumers opt to cut the cord on traditional cable service.
And the online video category is expected to heat up even more. Verizon and Redbox are expected to launch their own streaming movie service this summer, while Amazon.com Inc. and other technology giants also reportedly plan to enter the space with their own service offerings.
And a growing number of those players are launching proprietary content: Hulu recently announced 10 exclusive shows slated for release this summer.
That competition is expected to breathe new life into the already active cable category. Recent deals include Comcast Corp. and the State Fair of Indiana, Cox Communications, Inc. and Gainesville Fashion Week and Charter Communications, Inc. and a JTG Daugherty Racing NASCAR Sprint Cup Series team.
Below, IEG SR highlights seven sponsorship hot buttons in the cable category.
Promote new products. While nearly every company uses sponsorship to promote their cable, Internet and telephone offerings, some are using the medium to promote new products and services.
Case in point: Comcast aligned with the Indiana State Fair to promote and demonstrate its new Xfinity Home security product.
Comcast will title the fair's main street stage, around which it will set up interactive exhibits for Xfinity Home and other products. The company will set up cameras on the stage to demonstrate how the security product works.
"People think of Comcast as a cable company, but their product mix is expanding," said Debbie Dreiband, director of sponsorship sales with Live Nation, the fair's sponsorship sales agency.
Access content. Cable companies are increasingly using sponsorship to access content for video-on-demand channels. The goal: acquire unique, one-of-a-kind content that provides a point of differentiation.
For example, Comcast leverages the Comcast Bite of Seattle by videotaping singles for its Dating on Demand service, while the company activates the MLB Chicago White Sox by offering game reruns during a specified period.
In addition, Charter has used its tie to the NFL St. Louis Rams to develop a show based on the making of the team's cheerleader calendar.
Reward customers. Some cable operators use sponsorship to access perks that can be used to incent new sign-ups or reward current customers.
In one of the more unique activations in the category, Comcast over the last two years has leveraged the Chicago White Sox with a promotion that dangles a team-branded remote to current customers.
Offer media support. Like other types of media, cable companies frequently pay for sponsorship with a mix of cash and in-kind inventory.
That in-kind inventory can be beneficial to properties. For example, the Aquaphor New York City Triathlon secured a cash and in-kind fee from RCN Corp., the event's presenting sponsor. The triathlon used the media inventory for two purposes: drive registrations and add value to sponsorship packages.
"Sponsors can use the advertising inventory at their sole discretion," said Armand Milanesi, president of Precision Sports Entertainment, a sponsorship sales agency that reps the triathlon.
Provide pass-through rights to TV networks. Cable companies also look for one-on-one marketing inventory that can be bundled into advertising packages.
For example, Comcast next month will activate the Chicago White Sox by sponsoring an overnight campout at U.S. Cellular Field. The event will be co-sponsored by the Outdoor Channel and Bass Pro Shops, said George McDoniel, the White Sox's director of corporate partnerships development.
Gain broad exclusivity. Cable companies typically look for exclusivity across their three primary offerings: cable, Internet and telephone.
Some properties try to carve out discrete salable segments. For example, Comcast's partnership with the White Sox includes exclusivity in the hardwire phone category but not wireless phones.
Help support strategic partners. The growing number of strategic partnerships between cable companies, telephone providers and other types of companies can make it difficult to navigate exclusivity.
But those partnerships also can help open the door to new sponsors. Case in point: The Comcast Bite of Seattle this year inked a new partnership with Verizon following a new marketing partnership between the cable company and wireless provider. Consumers in Seattle, Atlanta, Chicago and a handful of other markets can now purchase Verizon products through Comcast, and vice versa.
"It opened up the opportunity to go with Verizon," said Brett Gorrell, vice president of sponsorship with Festivals, Inc., which produces the food festival. The festival was prohibited from selling the wireless category prior to the Comcast/Verizon partnership, he added.
Charter Communications, Inc.
12405 Powerscourt Dr., Suite 100
St. Louis, MO 63131
Jim Obermeyer, vice president, brand marketing
Sponsorship/Activation Strategy: The country's fourth-largest cable company provides video, broadband Internet and telephone service to roughly 4.3 million consumers in 25 states. Charter has sponsored motorsports teams for a number of years, culminating in a new partnership this year with a JTG Daugherty Racing NASCAR Sprint Cup Series team. Charter in 2011 re-upped a partnership with the NFL St. Louis Rams in a multiyear, seven-figure tie; the company uses the sponsorship to support its hometown positioning and gain content for its video-on-demand service. Charter in 2011 also inked an endorsement deal with Rams quarterback Sam Bradford. The company uses the athlete in "Hometown Superstar" TV ads.
Current deals: Alliant Energy Center, Madison, Wis.; Bud Light presents Country Jam USA, Eau Claire, Wis.; Central Washington State Fair; DCU Center, Worcester, Mass.; Dreyer & Reinbold Racing IZOD IndyCar Series team; Greater Hickory Classic at Rock Barn PGA Champions Tour stop; JTG Daugherty Racing NASCAR Sprint Cup Series team; Nebraska State Fair; NFL St. Louis Rams; Taste of St. Louis.
Additional comments: Charter completed Chapter 11 protection in 2009. Sponsors Greater Hickory Classic on behalf of Charter Business product.
1 Comcast Center
Philadelphia, PA 19103
Eileen Diskin, vice president, marketing communications & brand experience
Sponsorship/Activation Strategy: Country's largest cable provider has 22.3 million subscribers in 40 states and the District of Columbia. The company uses sponsorship to support its local positioning, promote Xfinity bundled packages and gain content for Comcast video-on-demand. The cable giant also sponsors to promote new products and services. For example, Comcast this year aligned with the Indiana State Fair to promote its new Xfinity Home security service. Comcast in January 2011 acquired a majority interest in NBCUniversal.
Current deals: Title: Comcast Arena at Everett, Wash.; Comcast Bite of Seattle; Comcast Center, Mansfield, Mass.; Comcast Theatre, Hartford, Conn. Cosponsor: Atlanta Dogwood Festival; Brigham Young University Athletics; Cobb Energy Performing Arts Centre, Atlanta; Fillmore Jazz Festival, San Francisco; Indiana State Fair; MLB Atlanta Braves, Boston Red Sox, Chicago White Sox, Detroit Tigers, Florida Marlins; Oakland Athletics, Philadelphia Phillies, Pittsburg Pirates and Seattle Mariners; MLS Real Salt Lake and San Jose Earthquakes; National Black Arts Festival, Atlanta; NBA Atlanta Hawks; NFL Indianapolis Colts, Pittsburgh Steelers and San Francisco 49ers; NHL Boston Bruins, Florida Panthers and Philadelphia Flyers; San Jose Jazz Summer Fest; Seattle International Film Festival; Wells Fargo Center for the Arts, Santa Rosa, Calif.; WHL Portland Winter Hawks; World Wrestling Entertainment.
Additional comments: White Sox tie includes title of Comcast Fundamentals Deck in U.S. Cellular Field; Comcast this year renewed the tie with a new five-year contract. Leverages Red Sox by offering Business Class Metro Ethernet service at Fenway Park and JetBlue Park at Fenway South, the team's training center in Fort Myers, Fla. Uses partnership with Tribeca Film to distribute content from the Tribeca Film Festival through its video-on-demand service and XfintiyTV.com; the company is not an official Tribeca Film Festival sponsor. GMR marketing helps execute ties.
Cox Communications, Inc.
1400 Lake Hearn Dr.
Atlanta, GA 30319
Joe Rooney, senior vice president, brand marketing, social media & activation
Sponsorship/Activation Strategy: The third-largest U.S. cable company markets cable and other services to 4.7 million customers in 15 states. The company uses sponsorship to maintain top-of-mind awareness, host clients and support its charitable arm. For example, Cox has leveraged the Barrett-Jackson auto auction by auctioning off a designated vehicle, with the proceeds going to Cox Charities. Cox Communications is a subsidiary of media conglomerate Cox Enterprises.
Current deals: Title: Cox Classic presented by Lexus of Omaha Nationwide Tour event; Cox Pavilion, University of Las Vegas. Cosponsor: Arizona Science Center; Barrett-Jackson auto auction, Scottsdale, Ariz.; Bridgeport Education Holiday Bowl; Cajundome, Lafayette, La.; MLB Arizona Diamondbacks; NBA New Orleans Hornets; NFL Arizona Cardinals and New Orleans Saints; NHL Phoenix Coyotes; Louisiana State University Athletics; Oklahoma Aquarium; Scottsdale Arabian Horse Show; Wolf Trap Foundation for the Performing Arts, Vienna, Va.
Additional comments: Cox in December 2011 announced a cross-sales deal with Verizon Wireless.
Time Warner Cable Inc.
60 Columbus Circle
New York, NY 10023
Marissa Freeman, senior vice president, brand strategy & marketing communications
Sponsorship/Activation Strategy: The country's second-largest cable company operates in 28 states with roughly 12 million subscribers. TWC largely uses sponsorship to demonstrate its local positioning and promote its bundled offerings. The company has increased sponsorship activity over the past few years with a handful of new deals ranging from venue naming rights to community festivals. Those include the Time Warner Cable Arena -- home to the NBA Charlotte Bobcats -- and the AHL Lake Erie Monsters. Spearheads ties out of regional and local offices.
Current deals. Title: Time Warner Cable Arena, Charlotte, N.C.; Time Warner Cable BBQ & Blues, Charlotte, N.C.; Time Warner Cable Field at Fox Cities Stadium, Grand Chute, Wis.; Time Warner Cable Music Pavilion at Walnut Creek, Raleigh, N.C. Presenting: Akron Marathon; Columbus Arts Festival. Cosponsor: Aquarium of Niagara; Brooklyn Museum of Art; Buc Days, Corpus Christi, Texas; Buffalo Zoo; Charlotte Motor Speedway; Colgate University Athletics; Dallas International Film Festival; Duke University Athletics; Eastern Kentucky University Athletics; Hendrick Motorsports NASCAR team; Home Depot Center, Carson, Calif.; ING New York City Marathon; Long Center for the Performing Arts, Austin, Texas; MLB Cleveland Indians and Los Angeles Dodgers; MLS Columbus Crew and Chivas USA; New York City Wine & Food Festival presented by Food & Wine; NFL Buffalo Bills; Carolina Panthers, Cincinnati Bengals, Green Bay Packers and Kansas City Chiefs; NHL Anaheim Ducks and Columbus Blue Jackets; University of Albany Athletics; University of Buffalo Athletics; University of South Carolina Athletics; University of Texas Athletics; Yuma Air Show, Arizona; Zach Theatre, Austin, Texas.
Additional comments: Sponsors Lake Erie Monsters and other properties on behalf of Road Runner high-speed Internet service.
Editor's note: Subscription numbers are for basic video services in the year-ended December 2011, per the National Cable & Telecommunications Assn.
(Source: IEG Sponsorship Report, 05/29/12)