TalkTalk signed up 150,000 new subscribers in the United Kingdom to its YouView offer in the first three months of 2013, at an average acquisition cost of £ 165 per connection, taking its total to 230,000 since launch at the end of September 2012. With more than 12,000 customers taking the service every week, TalkTalk says it is the fastest growing television service in the country. So where does this leave Freeview, on which over 11 million homes across the country still rely for free television?
TalkTalk is giving away YouView boxes to existing customers taking out a new 24 month contract, or 18 months for new customers. It is being promoted at £10 a month for the first six months and £15.50 a month after that, with a further £9.50 a month “line rental” which includes unlimited broadband and landline telephone calls. It works out at around £300 a year, compared to £500 for something equivalent from BT.
TalkTalk will launch a value-for-money Essentials TV product in the autumn, with a smaller, lower-cost YouView set-top box with a single tuner and no recording facility, which will be available to all four million TalkTalk customers.
“We believe, over time, that three-quarters of our customer base will take our TV offer,” Dido Harding, the chief executive of TalkTalk said in a statement.
Sir Charles Dunstone, the chairman of TalkTalk Group, became interim chairman of YouView after the sudden departure of Lord Sugar from the boardroom.
So far, TalkTalk seems to have been doing better with YouView than BT, with which it competes, without spending millions on exclusive sports rights. It is simply offering Sky sports and movie channels to customers on a monthly basis. Early indications are that almost three quarters of their YouView customers previously had free television.
In the same three months BT added 40,000 television customers, taking its installed base to 810,000 after six years. BT does not report how many of these have YouView boxes, although at the end of 2012 they numbered around 60,000. Assuming all its recent additions were to YouView, there might be around 100,000 YouView boxes on BT Broadband.
So between them BT and TalkTalk may now have an installed base of around a third of a million YouView homes. YouView has not provided any figures for the number of boxes sold retail as opposed to bundled for free with a broadband package.
The key question is whether BT and TalkTalk will continue to convert their broadband customers to their respective low budget versions of pay television at the same rate. That would give YouView around a million homes by the end of 2013. That figure could rise if BT is able to market its exclusive sports successfully.
Freesat meanwhile added 29,000 new homes in the first quarter of 2013, taking the total to an estimated 1.6-1.7 million homes in the United Kingdom, although 3.2 million receivers have been sold to date.
Over half the homes joining Freesat were previously with pay-television rivals, the majority of them from Sky, according to research conducted for the company.
Freeview remains the primary television service for the majority of people in the United Kingdom, with over 11 million households relying in it for their main television and almost 20 million on their second television. Over 3.5 million homes now receive Freeview HD on their main television.
Around 10 million televisions are sold in the United Kingdom each year and the vast majority have Freeview built in. An increasing number of them are smart screens with access to online services.
Broadcasters that backed YouView have generously supported the television ambitions of their broadband partners, but may be left wondering how best to sustain the continued success of Freeview.
www.talktalkgroup.com
www.youview.com
www.bt.com
www.freesat.co.uk
www.freeview.co.uk