Now that BT has won a big slice of the rights to broadcast live English premiership football for the next two seasons, it will be able to differentiate the next version of its IPTV service ‘BT Vision’ from the YouView-based offerings of rival TalkTalk, as well as increase ARPU and offer a compelling reason for people to switch to its fibre-based super fast broadband services by bundling them together at a discount, according to London-based analysts Informa Telecoms & Media (publisher of IP&TV News).
Rob Gallagher, head of Broadband & TV Research at Informa, comments: “While we expect BT’s move will be unlikely to cause few subscribers to leave the dominant pay-TV operator Sky, exclusive football rights will make BT Vision significantly different from whatever Talk Talk launches. And it is Talk Talk that BT will compete most fiercely and directly in the years to come.
“Talk Talk is already BT’s biggest rival in the major market for “dual-plays” of fixed-broadband and telephony. Both companies hope that these customers, who largely aren’t subscribed to Sky or cable operator Virgin, will be attracted to their own TV-based triple-plays. Some 11 million UK homes don’t subscribe to pay-TV.
“But Talk Talk’s bundles could be remarkably similar to BT’s: its TV offer will also be based on YouView and regulation means that its superfast broadband offer is based on the same underlying fibre infrastructure that BT Group is investing £2.5billion in.”
Informa believes that by adding exclusive sports content, BT stands a better chance of enticing subscribers to its bundles, which in turn will help prevent subscribers from churning to other providers.
The operator also stands a better chance of increasing average revenue per user (ARPU), particularly since few consumers will be willing to pay a premium for superfast broadband. Informa research has shown time and time again that TV is the only element of bundles that where quality trumps price when most consumers come to buy.
BT Retail could also bundle exclusive content to speed up the migration of subscribers to its superfast broadband services, which will be crucial to the group making a return on its multi-billion pound investments in fibre.
“Many consumers are finding it hard to justify the need for superfast broadband while online services that truly require such speeds have yet to emerge in any meaningful way,” concludes Mr. Gallagher. “Any service based on the football content is unlikely to require such speeds either, but bundling it at discount with superfast broadband is at least going to give consumers a reason they can grasp.”
YouView recently opened trial registrations for its yet-to-launch service to the public – more details here.