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GameStop Finds Success In-Store

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GameStop, the world's largest gaming retailer, has more than 4,000 stores in the U.S. Inside the vast majority of those stores sits a large-screen television that only plays GameStop TV, an amalgam of video-game previews, interviews with game developers, TV spots and integrated advertising that is difficult to distinguish from the actual programming.

This is on purpose, says Eric Hebel, chief operating officer at Channel M, an independent production company based in Los Angeles.

"It's better if [consumers] are watching something and don't know it's paid for," he says. "We can have the hosts of the program talking about a game so that it doesn't look like an ad, but it could be part of the deal."

Channel M, along with CRM Studios in Forth Worth, Texas, is responsible for producing the content seen on GameStop TV, a two-hour loop that is changed monthly. As fodder for new segments, cameramen recently shot interviews with developers at the Game Developers Conference in San Francisco. "The footage we shot at GDC will be used throughout the year," says Hebel.

The strategy appears to be working. Last week Nielsen Media Research released a study showing that the titles advertised on GameStop TV showed an increase in sales of between 19 and 36 percent. Products mentioned during the broadcast, but not in specific ads, also got a boost, although it was not as significant. On average, the unadvertised products saw a sales spike of 20 percent.

Several different game genres, including sports, action and first-person shooters, were studied. Each showed similar increases in sales. In addition, the amount of time people spent in the store grew by about 50 percent. (Nielsen Media Research, like Adweek, is part of the Nielsen Co.)

Channel M, which has 55 employees and offices in New York, Seattle and Detroit, had previously produced the EB TV network, a similar in-house channel for Electronic Boutique Games, which was acquired by GameStop in 2005. At the time of the deal, GameStop also had its own self-produced in-house network called Video Showcase.

"When I came in and headed up marketing about [two years] ago, we had two programs: EB TV and Video Showcase. The formats were different, the production qualities were different, and it wasn't very integrated," says Tom DiNapoli, vp, marketing, GameStop, based in Grapevine, Texas. "It was time to take these two productions that were somewhat disparate in nature, and bring them in under one roof and under our brand strategy."

Channel M began working with EB Games in 2002 after Hebel cold-called then COO John Panichello and offered his company's services. At the time, EB Games' in-store network showed game trailers back to back, similar to what GameStop ran on its in-store network.

GameStop TV launched at the end of September, around the same time that GameStop began an advertising campaign, "Power to the players," from Dallas-based independent shop The Richards Group. One of the spots from that campaign featured soldiers from the game Enemy Territory: Quake Wars outwitting a space alien bent on attacking because he received a game-play tip from a GameStop employee.

DiNapoli believes GameStop TV is more than just a way to showcase games to gamers. He sees the 18-34 male demographic who the channel is aimed at as a receptive audience for non-video game advertising. "We want [video game-related] endemic advertisers and non-endemic advertisers, for example Frito-Lay," he says.

Current non-gaming advertisers include the U.S. Navy and the White House Office of National Drug Control Policy. Channel M works primarily with media agencies to place brands on its programs.

Spending on out-of-home video advertising like that of Channel M is expected to hit $2.25 billion in 2011, per eMarketer, up from $1.26 billion in 2007.

Channel M also produces in-store television for retailers such as Marc Ecko with ecko TV, Blockbuster with the Blockbuster Entertainment Network and Steve & Barry's, which does not have a name. The company was also hired in January to launch the forthcoming in-store programming at BC Sports, the nationwide sports collectible and apparel company where Panichello is now chairman.

Watching GameStop TV is similar to talking about video games with a knowledgeable, if overly enthusiastic, acquaintance. All the news is positive, and each game is treated as though it could be the best title of the year. There is no pretense of objectivity, there is only the next game to look forward to.

"What it comes down to is who is hanging out at a GameStop? Gamers," says Hebel. "This is a great conversational tool for store associates and customers. For example, maybe they're watching an exclusive interview with a game developer and that leads to a conversation which leads to a sale."

Another example of the is-it-or-isn't-it content is a segment made for the Championship Gaming Series, a video game tournament sponsored by companies including DirectTV and Mountain Dew. The segment, which looks like the beginning of a show about the tournament, is in fact paid for by DirectTV. In it, quick cuts of gamers preening for the camera are interlaced with a mix of the games that they will compete in.

"Our audience has a built-in bullshit meter," DiNapoli says. "When they're being advertised to, they know it. Advertising has to feel natural."