BET Networks Tunes Into E-Commerce, Convergence Style

Written by Evan Schuman
May 17th, 2006

The historic problem with network television advertising has been an inability to prove any return-on-investment and the problem with E-Commerce has been …. well …. that you can.
BET Networks, which claims to reach more than 81 million households in the U.S., Canada and the Caribbean, thinks it has found a way to address both concerns and to make more profitable three of its primary distribution channels: Broadcast, Web and Mobile.

Black Entertainment Television (BET) in December 2005 launched BET Mobile and made a television first by embedding merchandise opportunities within a live show’s programming. As a video or song is being performed, copies can be purchased immediately. Viewers can text-message a code on the screen and instantly download ringtones that relate to what is being performed, for example, said Scott Mills, BET’s Executive Vice President and Chief Financial Officer.

Like retailers and manufacturers looking at demographic niche-specific stores, BET found the mobile commerce opportunity intriguing because of the specific characteristics of its core audience, which it identifies as 18- to 34-year-old African Americans.

His typical audience member is twice as comfortable with mobile content purchases than the typical American, Mills said, adding that the mobile trends are quite different than Web trends. When BET started focusing on Web offerings in late 1999, “African Americans were sharply underindexing Internet usage. Mobile is now the inverse. They’re significantly overindexing with both voice and data,” Mills said.

The mobile content Mills sees is heavy in text-messaging, but is also strong with ringtones, graphics and game downloads. The music being purchased “are disproportionately urban music ringtones” that are at the core of BET’s content offerings, he said. “I have this perfect alignment.”

To make the financial picture even more intriguing, ringtones are not about telling the consumer that he/she has an incoming call. They are about customization and that means a lot of repeat sales as trends quickly change. Given that BET is in a strong position to influence those cultural changes and preferences, it has a circular profitability potential.

“Ringtones are all about personalization, with people picking songs with which they identify,” Mills said. “The beauty is that urban music changes so rapidly. What is hot and popular changes so consistently. For younger folks, they want to be associated with whatever is cool and of the moment.” That means repeatedly changing ringtones as new songs become popular. “They want to get the tune first.”

BET is now working with Cingular/AT&T Wireless, Sprint and T-Mobile wireless services, with plans to add Verizon and Alltel soon. Mills wouldn’t reveal the kind of sales or profits coming from the mobile campaign, but he added, “We are very happy at the level with which it’s performing.”

The world of mobile E-Commerce is very different than other media and it requires a different approach. Like the Web, mobile interfaces can be unforgiving in terms of spelling and typing in the exact sequence expected. But today’s Web tools will often offer suggestions (“Did you mean Disk Array?”), a capability that has yet to hit cellphones and PDAs.

“If you get it a little bit wrong, you may not be able to consummate the transaction,” Mills said. The screen and keyboard size also discourage typing in longer strings of characters.

To address that, BET used the phone capabilities of the devices and?on Cingular only, initially–allowed viewers to hit # and then type BET and send and then be presented with a series of number menus (“Press 1 for ringtones….”). Almost immediately, BET saw a doubling of online sales, Mills said.

“I think this is absolutely a part of convergence. Media companies have to figure out how to serve these audieces. We created a bit of interactive TV.”

This melding of platforms strategy goes beyond entertainment content. “If I have a piece of breaking news, we’ll run a video crawl across the cable network, send a text message to phones and say ‘For more detailed information, go to our Web site for video footage'” and other information,” Mills said.

BET has been working with Motricity to manage the mobile service offerings. Motricity handles not only the hosting and encoding issues but also the mobile delivery, delivery “and how the mobile code executives live on our cable network.

Mills said Motricity also handles some of the business issues, including negotiating with various carriers, providers and aggregators. “They negotiate the rights and makes sure it works across many devices,” Mills said. ”When the consumer text tones and says ‘I want XYZ song,’ the song is sent from the Motricity platform through an aggregator across the carrier’s network.”


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