News October 27, 2015

Hot Seat: Nick Adams – Telstra

Telstra — the music and entertainment powerhouse. Don’t laugh. Though it hasn’t yet come to pass, it’s a strapline which is no joke. The Australian telco has serious ambitions to become a player in the music industry. Its recent entry into the live music space through a ticketing venture is another cog to a larger, branded wheel which includes the MOG streaming service and the BigPond digital download store. Sure, neither of these existing enterprises are leaving their competition in the dust. But it’s clear that Telstra has an ambition to build a vertically-integrated media empire. Telstra has some big factors weighing-in on its side – money (total revenue of $25.4 billion in 2011-12), tech and an enormous consumer base (14 million mobile subscribers and 8 million fixed-line subscribers).

On April 9, Telstra announced its premium, pre-sale ticketing “Thanks” initiative through an arrangement with Bang Tango, a ticketing company launched by former Ticketek exec Daniel Popic. Telstra’s customers will have a pre-sale window for concert tickets and access to so-called “money-can’t-buy experiences” such as meeting big name artists, backstage access, signed merchandise and music memorabilia. The mainstream British pop artist Olly Murs is the first artist announced through the campaign. Telstra will hope that, by rewarding its customers, it’ll leave its “much-maligned” reputation well behind. TMN caught up with Telstra’s Nick Adams to talk about “Thanks Music” program, and the telecom’s giant’s grand media plans.

What are the ambitions for this ticketing service?
It’s to connect the customers to the things they love. We want to reward them. The biggest problem we’ve had as an organization is we’ve never sat down and said, “Thanks for sticking with us.” We think this is a really simple and powerful way of saying thank-you and giving something to our customers that they’ll really enjoy. We’ve recently launched the $10 movie tickets and we’re about to announce sporting stuff soon. We think we’ll become a major ticketing and entertainment destination for our customers.

Who are you identifying as your competitors in ticketing?
We run our own race. We don’t pay attention to what our competitors do. Where this comes from is we do a lot of research into what our customers want. They want access to music and movies and sport and things they like. That’s why we got into this. Because our research showed us there was a gap to close in this space.

There are already many ticketing services in Australia. What makes yours better than the hundred or so out there?
The access we can provide is second-to-none. We’re giving our customers genuine, pre-sale access. And we’re talking about A-class international acts and local acts.

You’ve only announced Olly Murs. Who else is on your list?
We have seven or more international artists on our radar in the next few months. We can’t announce them yet. The pipeline is incredible in terms of the calibre of artists we’re bringing through.

And what about Australian artists?
Absolutely. And we’ll also be supporting outdoor events.

How will you select the acts?
We obviously look at who’s coming to the market. And we work with Bang Tango and the promoters appointed, then pick those artists we think are compatible with our customer base. We choose artists that we think will suit kids through to some of our older customers. We’ll make sure we have a good spread and that we can do money-can’t-buy experiences and have good engagement with the brand. We have a pipeline of about 20 shows. We’re going to get very, very deep with some of these acts. And you’ll see very tight integration on a major scale for some of these artists.

How will you market this?
With the movie-tickets (campaign), we’ve been activity promoting that through millions of text messages, electronic messages. We’ll also do the same for this. You’ll see a fully integrated campaign breaking in May, through all channels – TV, press, outdoor and social activation. We’re investing quite heavily. The union of those is going to be very powerful. And probably unmatched in the Australian marketplace.

Will you open this up to non-Telstra users?
This is exclusive to Telstra customers only. We’ve very much taken our lead from O2 in the U.K. where they’ve been fantastic at rewarding their customers. We’ve seen the results they’ve got and we’re very keen to build a comparable experience for our customers, which is rewarding loyalty.

The O2 of course has a headline sponsorship deal for a 20,000 seat arena in London, and a similar-sized venue in Berlin. Is that something you’re looking at doing, headline sponsorship or venue ownership?
The key difference between here and the U.K. is the geographic distances. Owning a stadium in Sydney or Melbourne isn’t particularly pragmatic if you’re in Brisbane or Perth. So the deal we’ve got with Bang Tango gives us good access to the venues and good pre-sale access in that space.

It’s obvious you’re building a vertically-integrated entertainment company. What’s the goal here?
It’s fair to say…the vision is that we’re going to become a bigger entertainment company with all the assets we have. And we’ll bring those together for our customers, to give them the experience they want with the devices they want. We’re one of the few companies who can bring all that together nicely for our customer base.

There’s been a lot of ill-will against Telstra in the past.
You’ll find the tide has changed as a brand. When we look at our customer satisfaction scores, when we look at our brand consideration scores, at our shareprice, no matter what metric we look at for this organization, it’s improving. Complaints are down. This (ticketing service) is only going to enhance goodwill towards Telstra, given the good momentum we’ve had in the in the past 12-18 months.

Does Telstra make a cut from ticket sales?
We make no money from this at all. This is purely to drive customer advocacy and engagement and to say thanks to our customers by rewarding them. We have a commercial arrangement with Bang Tango to supply services and that’s the only exchange that happens. We negotiated this just before Christmas. And we’ve been working on deployment since just before New Year.

This will lead to banter that Telstra is getting ready to move into promoting. Is that going to happen?
No. We have no aspirations in that space. We’ll stick to our knitting.