BT's Television Venture 'A Flop', Opines Morgan Stanley

02 April 2007

LONDON: Although the phrase actually used by investment bank Morgan Stanley of the telco's venture into broadband television, BT Vision, was "low take up", adherents to plain English might opt for the term "flop".

BT Vision, launched on 4 December, has won just 5,000 subscribers in the first four months of its existence - 40% of whom are BT employees.

The service is available only to BT's broadband customers and has received muted marketing support to date. The telco oligarch insists it had never planned mainstream marketing activity until "the Spring" - a usefully vague timescale.

According to a BT spokesman, customer take-up is "entirely in line with our expectations". Continued the spin-doctor: "The marketing campaign begins in the spring, and we look to the market to then properly assess how we are doing at that point."

Other unattributed voices within BT deny the launch was low-key because of concerns about the reliability of the fixed-line broadband technology, which requires a special PVR with a built-in Freeview tuner. This offers 43 free TV channels plus 'on-demand' content at varying prices.

BT claims it deliberately soft-pedalled the launch, citing fears that the service could be overwhelmed by consumer demand - a fate similar to the customer service debacle that swamped the "free broadband" launch last year by cellphone retail chain Carphone Warehouse in its rush to market.

Instead, BT avers it has concentrated since launch on ensuring customer support for BT Vision is up to the mark, such as call centre staff and engineers.

As WARC News reported last year [06-Dec-06], an earlier investment note from Morgan Stanley was bullish as to BTV's prospects: "With a free set-top box, £2-£3 per movie download, and some live football, the offering looks compelling versus current offers from NTL and Sky."

However, as BT itself concedes, BT Vision is as much a tourniquet to stem broadband customer churn as it is a device to generate new revenue streams.

Data sourced from Financial Times; additional content by WARC staff