Retail Giant Tesco Ramps Up Digital Offering With Free Online U.K. TV Service That Shows Ads Based On What Loyalty Card Users Buy

In a world of big and small data it’s easy to forget bricks and mortar supermarkets have been gathering intell on their customers for years, thanks to loyalty card schemes that give them access to their customers’ shopping list in exchange for a few discount coupons and/or reward points. U.K. supermarket Tesco, which launched its Clubcard loyalty scheme way back in 1995, is now putting that data to work to power a new free online TV service, which comes out of closed beta to launch today — available to Tesco’s 16 million Clubcard users.

The service, called Clubcard TV, will offer “hundreds” of free movies and TV shows to U.K. Clubcard customers to watch online via an on-demand media player service powered by blinkbox — a company Tesco acquired a majority stake in back in April 2011. The TV service will include “targeted advertising”  tailored to the viewer based on what they buy in Tesco. Advertisers signed up for the launch include Kellogg’s, J&J, Colgate and Danone.

Commenting on the launch in a statement, Michael Comish, CEO of Tesco Digital Entertainment, said: “The reason we can offer great programming for free is because customers will see relevant advertising before and during the movie or TV show they are watching. We’ll use Clubcard data to tell us what might be relevant for our customers and therefore help us deliver a more personalised service.”

In terms of content, Clubcard TV launch movie titles include The Assassination of Jesse James by the Coward Robert Ford (Warner Bros.), The Shawshank Redemption (Daro Media) and TV shows The Only Way is Essex (All3media), Doc Martin and The Real Hustle (DRG). Children’s content available from launch includes The Wind in the Willows movie (DCD Rights), The Care Bears and Strawberry Shortcake TV series.

Clubcard TV can currently be viewed in a desktop or laptop computer but Tesco said it plans to extend the support to games consoles, tablets, smart TVs, Blu-tay players and set top boxes.

Earlier this week Tesco announced the launch of a full suite of digital entertainment services, including Clubcard TV but also blinkboxbooks and blinkboxmusic, as it seeks to counterbalance the push Amazon has made with its digital media services plus tablet and e-reader strategy. Amazon has also been treading directly on supermarket toes by dabbling with grocery retail.

Tesco said the blinkbox team developed its Clubcard TV service. Hiring in digital expertise is clearly a key plank of its online strategy as it seeks to compete with digital natives like Amazon. Tesco also poached Gavin Sathianathan from Facebook, where he had been the company’s retail lead in EMEA, to be MD for its new blinkboxbooks service.