If  BT is serious about becoming a major challenger in the
brave new world of free broadband, but premium content, some say it will have to do
better than this. Starting the season after next, BT has agreed a deal to broadcast nearly
live football over its BT Vision service for three years. But with the service only being
applied to games not shown live- ie the ones people are less interested in, is it a case of
too little, and, considering the games aren’t shown until after 10pm, a lot too
late?

Alternatively, maybe BT is being clever, the Internet is, after all, about choice and
catering for niche interests, and perhaps the fans of middle of the table premiership clubs
are alienated by the level of focus on the big games. BT has enabled itself to tap into this
market, and on the cheap.

The deal for nearly live football broadcasting was actually awarded to both BT and
BSkyB, who, between them, forked out £84.3 million. The deal kicks off at the start of
the 2007/08 season. Games will be shown on BSkyB and over the BT Vision service,
which is due to be launched later this year.

But BT is facing ever stiffer competition. Sure, it recently announced a good set of
results, but now Wanadoo has joined Carphone Warehouse in offering free broadband in
combination with cheap fixed line calls, and with VoIP representing an ever-growing
threat to the company’s traditional business model, BT has to be bold, or failing that, very
clever.

BSkyB and Setanta paid £1.7 billion to broadcast live games. For the TV broadcaster,
premiership football coverage has been a Trojan horse, no doubt pulling customers in by
the millions.

But by not showing live games, has BT settled for second best? Is it a half-hearted
gesture? TV broadcasting is for big boys, serious about their intent. BT Vision is a brave
move, but is the fact that BT has been left with the leftovers in football coverage a sign of
a company that’s been brave, but not nearly brave enough?

The company made a profit of £629 million in the last quarter, and when your long-
term business model is under threat, does it not make sense to re-invest most of this
money into protecting the future?

On the other hand, Internet broadcasting is likely to bring in more transient benefits
for the big players. When customers sign up to BSkyB, they often stay there for good.
The churn rate is not too bad. But the psychology is different for the ‘net’. Forking out
hundreds of millions of pounds on offering services as a way to lock in customers for the
future might have worked for BSkyB, but for the Internet, which is the fastest changing
business the world has ever seen, this is a far more risky strategy.

The nearly live broadcasting deal applies to 242 games. The deal might not apply to
the big games, but there are plenty of fans out there who want to watch their team. And
the Internet is perhaps less about live coverage anyway it’s about the user choosing the
time they view. So broadcasting after 10pm might not be such a bad thing.

© Investment & Business News 2013