Marketing will be key to BT Vision success says Ovum

Stuart Corner
Tuesday, 05 December 2006 01:10

Your IT - Home IT

The launch of BT Vision  is the start of a new era in the in-home entertainment market, according to Ovum, but, it says, BT is up against major established players NTL and BSkyB in the Pay TV game so how well it can market its new IPTV VoD service will be the key to its success.

According to Ovum the control that BT Vision gives customers will be a particularly important factor in the services' success.

"This is much more than acquiring customers , but how well it competes with NTL and BSkyB, and whether it can explain to customers the power they now have to take control of what they view and when they see it. This is why the launch today is the start of a new era in the in-home entertainment market," according to Ovum senior analyst, Annelise Berendt, who leads Ovum's broadband content research .

"BT is using a very different approach by leveraging the existing digital terrestrial television base which in many ways provides it with a head-start in building a new line of business," Berendt said. "BT's ability to continuously innovate will also be key. The competition is not standing still and there is a danger that BT will find the goal posts moving faster than expected," she added.

"BT is certainly future-proofing its offer - the V-box is HDTV-ready and the operator is planning interactive feature upgrades next year. New interactive services, including video telephony, rich gaming and gambling, are on the horizon for next year. If the consumer appetite for such services is strong, BT will certainly give the competition a run for its money."
 
According to Ovum, TV is the best bet for BT to reverse the long-term decline in consumer revenues. "Moving into the provision of entertainment is a logical extension of its network (into the home), technically possible (due to the penetration of high-speed broadband lines) and commercially practical (because of the fragmentation of the media and advertising industries). The opportunities for BT are compelling, notwithstanding the challenge that it has no track record in the entertainment space."

With an investment of £100 million planned for 2007, BT says the service will be profitable in its own right in three to four years time. It is aiming for 200,000 subscribers by the end of next year, and two to three million subscribers in the medium term. "Hitting these figures may be something of a tall order given that other IPTV operators around the world are still only have subscribers in the 100,000s range," Ovum notes.