BT Vision added 41,000 homes to its television and video on demand service in the last quarter, its highest gain for more than two years and more than Sky and Virgin Media combined. The total installed base in the United Kingdom is still only 639,000, up from 505,000 a year previously. Projecting out from recent growth, informitv estimates that BT Vision could reach a million homes in the next 18 months, still far short of the original aspirations for the service. However, that does not take into account the expansion of high-speed broadband and the planned launch of YouView, a competing platform in which BT is a shareholder.
For the first time since it launched in 2007, BT Vision has overtaken both Sky and Virgin Media in the number of net quarterly additions.
“It is very encouraging but we are not getting carried away,” said Marc Watson, the chief executive of BT Vision. “We are a young business with a lot to do.”
In comparison, Sky added 26,000 pay-television customers in its last quarter, down on the 100,000 it reported for the same period the previous year. Despite signing up 42,000 subscribers to its new TiVo service, Virgin Media reported a net decline of 5,700 television customers in its last quarter, although its cable broadband customer base increased by 24,300 to reach over 4 million homes.
With only 0.6 million television homes, compared to 3.7 million for Virgin Media and 10.2 million with Sky, BT Vision still remains a long way from the original ambitions to reach two to three million households. The million mark is seen by many, not least advertisers, as the point at which a platform becomes commercially significant.
BT has still only managed to reach a tenth of its broadband customers with BT Vision, although it has made significant gains in its broadband business, with 166,000 new customers in the last quarter and over 6 million in total.
A significant indicator of the prospects for BT to deliver television and video services is the adoption of its Infinity high-speed broadband service based on fibre to the cabinet. BT Infinity added 88,000 customers in the last quarter, with over 300,000 customers in total.
With YouView planning to launch in 2012, BT will be a partner in another hybrid broadband and broadcast platform, leaving it with a legacy of hundreds of thousands of BT Vision boxes to maintain and at least three different user interfaces to support.
The relatively slow growth of BT Vision to date demonstrates the challenge that YouView will face. It took four years for BT Vision to reach half a million homes, even when it is virtually given away at an additional £4 a month for subscribers to BT broadband and telephone services.
By informitv calculations, BT Vision is currently adding over 600 homes every working day, which shows how long it takes to build momentum with such services, compared to retail products sold off the shelf.
For example, around 9.5 million television sets are now sold in the United Kingdom every year, that is over 26,000 every day, almost all of which will have an integrated Freeview tuner, with a significant proportion being internet enabled.
The launch of YouView is likely to be backed by BT and TalkTalk with highly subsidised digital video recorders. It will not initially be integrated in televisions.
The YouView consortium, which has been rather quiet in recent months, recently made its marketing and communications team redundant. In a statement the YouView consortium said it was “moving, as planned, towards its field trial stage and further end-to-end testing”.