BT Vision added 38,000 customers in the last quarter for its hybrid broadcast and broadband video service in the United Kingdom. However, after an adjustment for inactive customers, the customer base stood at just 433,000 at the end of June, only 10,000 more than at the end of the previous quarter, when it added 25,000.
The latest figures for BT Vision are mediocre. In the first three months of the year, the service was adding an average of around 5,000 customers a week. Even at that rate informitv estimated it would take five years for BT Vision to reach a million customers, not taking into account any churn.
Now it seems that BT is indeed taking churn into account. While it gained 38,000 new customers in the last quarter, it appears to have lost 28,000 at some point, which is more than it gained in the previous quarter. That is for a service with no ongoing subscription, when the company is literally giving away its Vision+ twin-tuner digital video recorder to broadband customers for a modest installation charge.
In comparison, Sky added 200,000 paying subscribers in the first half of the year, nearly 125,000 of them in the last quarter.
As another point of comparison, in just the first three months of 2009, an estimated 3.3 million digital terrestrial television receivers were sold. Some 2.4 million of them were integrated digital televisions, while the rest were set-top boxes. In addition, some 290,000 digital terrestrial television video recorders were sold in the same period according to GfK market research.
BT managed to add 78,000 broadband customers in the last quarter and now has 4.8 million broadband subscribers. Fewer than one in ten have been persuaded to become BT Vision customers.
BT, a public company, does not break out financial figures for BT Vision. Overall it reported lower pre-tax profits of £272 million on revenues of £5.2 billion in the last quarter. BT Vision is unlikely to have made a positive contribution to that figure.
BT recently announced a deal with Sony Pictures Television to carry their latest and classic movie titles on the BT Vision service. “It means we now have long-term deals with all the major studios,” said the new chief executive of television and online services, Marc Watson. He was promoted from director of content and business development following the departure of the previous chief executive, Dan Marks.
BT is apparently frustrated by the dominance of Sky in sports and movies and is looking for some form of regulatory relief. It seems to be missing the point that BT Vision was originally positioned as an non-subscription alternative to existing pay-television platforms.
The real problem for BT Vision appears to be that it is failing to convert existing BT broadband and Freeview users in significant numbers.
BT may now be pinning its hopes on the proposed Canvas consortium with the BBC and ITV, recently joined by Five, but so far not Channel Four. The question is what can this proposed broadcast and broadband hybrid offer that BT Vision does not, and how much more successful will it be?