BT Vision has increased its installed base to just under 400,000 homes at the end of 2008. The British telecommunications company says that “an increasing number” of new BT Vision customers are subscribing to one or more of the on-demand programming packages that are available, but declined to give any further figures.

The number of British homes with the BT Vision broadband video service is now reported to be 398,000, up from 150,000 a year ago. That is an additional quarter of a million homes in a year, or around 5,000 a week.

The tipping point will not come until the platform has at least a million homes, when it becomes more significant for advertisers and distributors, although this really depends on the level of usage of the interactive services.

The stated ambition is to reach at least 2 million homes by the end of 2011, which would require the current rate of additions to continue to double every year, not taking into account any churn.

In comparison, Sky added just over 400,000 net new satellite subscribers in 2008 to reach 9.23 million homes and is on track to meet its target of 10 million.

A significant difference is that BT Vision does not require a subscription. It currently provides a twin tuner Freeview receiver with an additional video-on-demand service over broadband.

The addressable market is essentially any Freeview home with BT Broadband. With 4.7 million broadband customers, BT is the leading provider, with just over a third of the market.

The total number of British homes that rely on entirely free Freeview digital terrestrial television is around the same number as the total number of Sky homes. There were 9.3 million Freeview homes in the third quarter of 2008, the most recent for which Ofcom has published figures. Interestingly, that is around the same number as a year previously.

There are still 2-3 million homes in the United Kingdom that have yet to convert their main display to digital reception, and many more millions of secondary sets that still need to be converted.

That still provides plenty of opportunity for both free and pay television services, but BT Vision will be doing well to gain a significant share.