The seven shareholders in YouView have agreed at the last moment to back the platform for a further five years. They will remain equal partners in the joint venture but the broadcasters are cutting their financial contributions, leaving broadband service providers BT and TalkTalk to carry the remaining costs. YouView, which is in just over a million homes in the United Kingdom, is estimated to have cost over £100 million to develop and launch.
A report in The Guardian, quoting a source who asked not to be named, says the broadcast partners, the BBC, ITV, Channel 4, Channel 5 and transmission company Arqiva are each cutting their contributions by 85% from an average of £5 million a year to just £750,000. If correct, it means the remaining partners, BT and TalkTalk, will have to pick up the majority of the costs of further platform development and marketing, given that they have been the main beneficiaries of the joint venture.
The seven partners are understood to have spent £45 million on YouView in the last year alone. The contribution from broadcasters includes the cost of airtime to advertise the platform. The figures do not include the cost of around a million YouView boxes, subsidised by BT and TalkTalk. The report says only an estimated 30,000 boxes have been sold retail, at prices ranging from £129 to £299 each.
The new deal was finalised just days before the expiry of the existing shareholder agreement.
“We are delighted that all seven shareholders have committed to the future of YouView with a five-year term,” said Richard Halton, the chief executive of joint venture company. “The next phase for YouView involves ambitious developments across a range of devices and we’re looking forward to achieving our long term target of 10 million connected UK homes.”
That target of 10 million homes, which is as many as Sky, is indeed ambitious and characteristically optimistic. When it was first proposed as Project Canvas, the service was expected to launch in 2010 and have between 4.5 and 6.3 million homes by 2013, reaching between 7.2 and 10.7 million in 2017. Having just passed the million mark, there is still some way to go.
BT has 7 million broadband retail customers while TalkTalk has 4 million. TalkTalk has benefited most from being able to offer customers YouView boxes, delivering 650,000 in the last year, although it only added 165,000 broadband subscribers. BT added 186,00 television customers and over half a million broadband subscribers over the same period.
Meanwhile, the broadcasters involved in YouView appear to be renewing their faith in Freeview. They are expected to back a new brand, Freeview Connect, through Digital UK, an industry body funded by the BBC, ITV, Channel 4 and Arqiva, originally established to promote digital switchover.