ReplayTV Rewinds the Clock for O'Leary

Leading digital television recording services TiVo and ReplayTV both have turned to companies founded by veteran direct response television entrepreneur Tim O'Leary to reach consumers directly with their high-end electronics.

The two services also are seeking to sell their technologies to larger companies for bundling with interactive television services.

TiVo, Sunnyvale, CA, partnered last October with O'Leary's former company, Tyee — now known as Tyee Euro RSCG — while ReplayTV, Mountain View, CA, recently released an infomercial produced by O'Leary's current DRTV incarnation, Respond2. The infomercial started testing last week on cable and local affiliates near retail stores Circuit City and Best Buy, which sell the product. The infomercial offers the set-top box for $499.

Like TiVo, which is sold as a stand-alone or bundled with Sony, Phillips, DirecTV and, come next year, AOLTV, ReplayTV is manufactured by one company, Flextronics, and distributed as a stand-alone or bundled with the Panasonic ShowStopper set-top. Thus, the infomercial has to serve three purposes: push retail, aggressively target direct sales and brand.

“Why the ReplayTV brand? Two reasons: The initial reason is that we believe in order to be successful in the long-term basis, we need to have a one-to-one relationship with our customers,” said Jim Hollingsworth, senior vice president of sales and marketing at ReplayTV. “The second reason is that the direct and online distribution arena is a very fast-growing area — and that's an area where Panasonic is not currently involved in. This infomercial and our other branding and direct marketing campaigns on television, in print and online fulfill these areas of distribution.”

Early indications from other 800-number-based marketing have resulted in eight out of 10 people asking where they could see a demonstration of the product, Hollingsworth said. Thus, because of ReplayTV's hi-tech nature, O'Leary said some explanation is necessary for the long-form to work.

“It's true that the ReplayTV infomercial is like a hybrid,” said O'Leary, CEO of Respond2, Portland, OR. “It's a lot different than in the early days [with Tyee] when I started selling on the Phillips campaign. The first few years we didn't sell anything because they were concerned that their retailers would be mad, so they were always lead-generation; then we got into a softer sell the last few years. This is a lot more aggressive than Phillips has ever been. But I think this approach is fine now because the retailers understand infomercials enough to know now that they don't care if they have to give up the sales in order for the company to run a bigger marketing campaign.”

At Tyee, Portland, OR, O'Leary developed a partnership with Phillips Electronics that counted heavily on the “storymercial” concept, which Tyee used for its TiVo long-form but discarded for ReplayTV.

“Storymercials tend to be higher-budget,” O'Leary said. “They take a lot longer to produce, and they are by their nature a softer sell. I guess philosophically I always disagreed with my partners at Tyee in that I believe the objective of an infomercial is to hit the client's financial objectives — and with a client like ReplayTV, we had to have a show on the air fairly quickly and we would be solely judged on how many people bought units. That's usually not the appropriate place for a storymercial.”

O'Leary was brought into the ReplayTV picture by Transactional Marketing Partners, Santa Monica, CA, a longtime DRTV consulting firm and ReplayTV's consultant.

“Both ReplayTV and TiVo are making a concerted effort to build a market space for the technology, and after that, they are competing for brand preference,” said Joel Margulies, partner at TMP. “The idea was: Why would Replay duplicate what TiVo has already done? TiVo having been in the marketplace and already run their infomercial, they already established the essence of what the device did. So instead, the suggestion was made that we would aggressively go for transactions rather than image building — although the Respond2 infomercial did have a little bit of both, with more emphasis on the selling.”

Margulies and O'Leary acknowledge that the show was tweaked in the early stages to play down the informational slant and push the sell. This could be credited to TMP's help in getting ReplayTV a full lineup of marketing partners to help sell the stand-alone box.

“We got Tim to do the show; fulfillment is being handled by National Direct; inbound calls, customer service and help desk services from West Teleservices; and Mercury Media placed media and took care of reporting and integration with the other services,” Margulies said.

Once all these back-end partners were in place, ReplayTV wanted to use them to their benefit to make transactions, rather than simply brand or explain the product. O'Leary said the feel and concept of the infomercial came from a recent Respond2 computer campaign for Value America. Two hosts — one doing testimonials, one speaking directly to the viewer — along with a “limited time” countdown chyron and a free magazine subscription up-sell added to the “buy now” fever the long-form tries to induce.

“When we changed the show midstream, we said, 'OK, how can we take that Value America in-your-face kind of format and make it a little cleaner and smoother?'” O'Leary said.

TMP's marketing acumen assisted ReplayTV in other aspects, such as using a Web address that goes directly to a pre-existing order page for easy measurement; another Web-only up-sell of $50 off a Showtime Cable Network subscription; and some appearances on the Home Shopping Network, where ReplayTV has sold out the two times it has been featured.

But it was O'Leary's experience in DRTV production that saved the day last week, when Sony unexpectedly dropped the price of its TiVo bundled set-top to $399.

“Tim did a great job of recording additional price points, so the show doesn't have to reshoot,” Margulies said.

Margulies and Hollingsworth also hinted that a short-form cut from the infomercial might soon appear as well.

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