Bottom Line: Nice move needs an end result
BACK of the net! Just a fortnight after the launch of BT’s new sports channels and it’s already scored millions more potential viewers.
But hang on. BT may have clinched a three-year deal to share content with one of its main pay-TV rivals, but exactly what is the telecoms group getting out of it?
No financial details of the Virgin Media deal were released yesterday, so although we can assume that BT has made up some of the £738m it shelled out for Premiership rights – just in time for the start of the season tomorrow – it’s hard to know how much. And although the deal offers the opportunity for BT to up its advertising prices on the new channels – more subscribers means higher rates – it’s hard to judge how many of them will really be watching.
While BT may be totting up numbers at one end of the field, it’s giving sports fans fewer and fewer incentives to sign up to its own broadband packages, defeating one of the main objects of the venture before it’s had a chance to get off the ground.
The company proudly said last week that in the three months since it announced the new channels, 1m of its customers had signed up. But this is a free service – you’d expect slightly more of its 6.4m customer base to show an interest, and analysts want to see at least half on board before they’re impressed.
Until we know the money that changed hands it’s hard to judge the merits of this tie-up. But though the start of the football season might distract them for a while, it can’t be long until investors start getting frustrated at the lack of tangible benefits.