Friday, May 26, 2006

Creating an Advantage

There's a programme on TV in the UK called 'The Worst Jobs in History'. Looking back some time from now, the task of launching and rolling out a new content service in 2006 may well qualify for a future edition of this show.

It is an unenviable task to try to take on strong, dominant incumbents in a market where the only advantage is the ability to spend a fortune of sports rights (or buy in US programming or - rarity of rarities - develop a hit series).

Yesterday saw the announcement that BT Vision has teamed up with Sky to share the timeshifted rights to UK soccer. I find this a strange move on behalf of Sky - they have shown a chink of light to a head on competitor, but with recent EU rulings it was always going to be difficult for them to retain their total dominance on all football rights. For all their recent problems, the English FA should be commended for running a very clever rights auction.

But let's stick with BT Vision. Their role is to launch a new internet based service to rival offerings from digital terrestrial operators Freeview (BT Vision will be carrying all Freeview channels), Sky's satellite service and the combined businesses of Virgin Mobile, NTL and Telewest with their cable monopoly.

So, BT need to offer a service that is:

a) delivering more than existing services
b) reaching new audiences
c) cheaper than their rivals
d) offers better content
e) leverages their huge installed base

In my home in the hills in Wales, the only option for digital TV is satellite - there is no cable and no digital terrestrial reception (why do I pay my TV licence ?). However, I do have excellent broadband/ So, I thought that by signing up for BT Vision I would have access to the thirty or so Freeview channels over my internet connection. But, no, you still receive these pictures to a traditional arial connected to your BT box.

So, the footprint just replicates that already available for traditional terrestrial transmission. That you can receive on your TV using a £30 box, or even on your PC using a £30 dongle.

Demos of the set top box have received good reviews - with the ability to 'network' and communicate with other viewers being seen as a key new feature, but all my experience indicates that people want to watch TV on their TVs and are not particularly interested in interacting. And acts such as thSkyKy + box are a tough act to follow.

The pioneers at Video Networks have been there already and have spent tens of millions gathering just a handful of customers, but BT do have an existing presence in most British homes, deep marketing pockets and a practical monopoly even twenty years after de-nationalisation.

So, that leaves football - the answer to every channel manager's problems. Will the time shifted rights be enough?

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