By Published on .

Philips Media is overhauling its marketing strategy for the struggling Compact Disc-Interactive format for the second time in seven months.

Philips has parted with agency Rubin Postaer & Associates, Santa Monica, Calif., creator of last fall's $15 million ad campaign starring Phil Hartman. The company said it will return to using infomercials, a strategy abandoned when the Hartman spots started airing.

And, in an attempt to hedge its bets on the TV-based CD-I format, Philips said it would start to make some of its games available in the more popular computer-based CD-ROM format.

Philips also has a new name; the company said it decided to forgo the Philips Interactive Media moniker because it too closely resembled Compact Disc-Interactive.

Philips now considers itself a software company, said Steve Sandborg, VP-marketing.

"We have gone from being hardware driven to being software driven," he said.

The moves come at a time when CD-I player sales are rising, but still have failed to meet company expectations.

"We doubled sales last year, and at this point we hope to double sales again in 1995," Mr. Sandborg said.

Still, Philips failed to meet last year's goal of having an installed base of 1 million CD-I players worldwide by yearend, even though it cut the price of the players by $100 to $299.

Philips declined to provide sales statistics.

Analysts say the company's relatively small user base, compared with that of its rivals, remains a problem.

"It is a separate standard, and they have not been able to sell enough hardware or software to make it a significant standard," said Jim Penhume, market analyst for BIS Strategic Decisions, Norwell, Mass. "It's great that you double your sales, but if the volume is so low and you have to compete with Sega and Nintendo .*.*."

Mr. Penhume said CD-I's problems are exaggerated by the fact that the standards for TV-based games like Sega and Nintendo are changing.

In a sign that Philips is recognizing the power of the PC CD-ROM format, the company will offer some of its more popular games for that medium starting this year. One of those, "Burn: Cycle," will get some ad support, though neither details nor agency project assignments have been decided.

Several other games could also get advertising, Mr. Sandborg said, including a new one called "Chaos Control."

Most Popular
In this article: