BT: the game changer?

In the run-up to the sporting season, the battle between BT and BSkyB continues – and with BSkyB refusing to air its rival’s multi-million pound ads, it’s clear that they’re taking the threat seriously, says Aegis’ Jim Marshall. But what exactly is it that BT is threatening? It certainly isn’t BSkyB’s football coverage…

I sat on the platform at Warren Street recently, staring at a large image of Daniel Sturridge under the headline ‘Game Changer’. I don’t remember him changing many games when he was at Chelsea. Wouldn’t this have been better placed at Liverpool Lime Street station?

Of course, I’m partly being an embittered (Chelsea) football fan and partly disingenuous because the ‘Game Changer’ is BT; the 48 sheet cross tracks ad is part of BT’s ubiquitous campaign to promote its new sports channels.

And what the hell, if José Mourinho can describe himself as ‘the Special One’, why can’t BT call itself the ‘Game Changer’? But will it be?

BSkyB are clearly taking the threat seriously because it is refusing to take BT’s ads on its sports channels – something it didn’t feel necessary with ESPN. But if BSkyB see it as a threat, what is BT actually threatening?

It certainly isn’t BSkyB’s football coverage because it will still have the majority of the live Premiership games and its football coverage has established a hugely powerful relationship with ‘hardcore’ football fans and viewers in general. BT couldn’t possibly hope to undermine this, even in the longer term, particularly with just 38 live games.

The threat is potentially to BSkyB’s business model. BSkyB is an ARPU (Average Revenue per User) business which relies on customers paying for its various services and content, and football is one of its main revenue generators.

The problem for BSkyB is that BT is a ‘3 Play’ business offering Telephony, Broadband and TV. Does this make it fundamentally different to BSkyB?

In theory no, but in practice yes – and this is brought into sharp focus because BT is giving its sports channels away for free to its broadband subscribers. So BT is using its Premier League Football and other sports rights (Rugby, motorcycling, etc) as a ‘loss leader’ to boost its broadband penetration.

This in turn could threaten BSkyB’s pricing model for its football coverage, because BT is going to be cheap in comparison. So BSkyB is unsurprisingly somewhat concerned.

What is also interesting, in this new multi-channel and multi-platform world of TV, is just how resilient the free to air channels have proved themselves to be – ITV, Channel 4, even little 5 and of course, the Beeb. There are a number of reasons for this, including the successful development of their own digital channels.

Though, arguably, the main reason for their resilience has been the maintenance of high quality content across the board and, for all of BSkyB’s superior financial leverage, it has yet to threaten the free to air channels’ dominance in drama, and general entertainment – the new satellite and digital channels have only made truly significant (and consistent) inroads into the free to air channels’ audiences in sport.

But with BT now seriously entering the fray (BT Vision was never previously a seriously competitor) it might just be that the overall Game is about to change. Or that’s what the advertising is telling us. Personally, I don’t think it will be, and certainly not on the basis of its current proposition.

First, although arguably BSkyB built its business and – undoubtedly – its pay per view business on the back of live football, the world has long since moved on.

As both ESPN and, more disastrously, Sentana Sports will tell you, football will not guarantee either a significant increase in subscribers or audiences in the current TV environment.

Second, the ‘free’ live football will be streamed on broadband and not shown free on the BT Vision channels on the main TV screen. While modern TV audiences are more than capable of shifting their viewing away from the traditional TV to new devices, the preference still remains the main TV set, particularly for major sporting events.

Third, I’m not sure what game BT is trying to change. From all the hype and PR, one would assume the TV game – or at least TV’s coverage of the football game.

In reality, the game it is most concerned about is the broadband game because, since 2006, BT has haemorrhaged broadband customers, suffering most losses to BSkyB.

So, rather ironically, while BT Vision was positioned as a standalone TV service – which was never credible based on the content available on the channel – now that it has a ‘foot in the door’ with some genuinely high profile and exclusive sports programming, it has shifted the emphasis away from a TV service and back to its broadband business.

I find this all a bit disappointing because BT has the resources and technology to make a genuine move into the TV sector, but it will need more commitment and imagination than just another football and general sports proposition. And most of all it will need real ambition – the sort of ambition displayed by BSkyB when it first launched.

In the meantime, the Premiership will have to rely on the ‘Special One’ to bring an edge to the new season – which reminds me of a recent ‘trueish’ story involving Mourinho and his now retired friend Sir Alex Ferguson.

José was explaining that continental players tend to be more intelligent than British footballers. To demonstrate this theory, he asked John Terry and Petr Cech the same question: “You are your father’s son but you are not your brother. Who are you?”

John Terry was flummoxed but Cech immediately responded: “It must be me. I’m my father’s son and not my brother.”

“You see, Sir Alex.” Mourinho explained.

Sir Alex wasn’t convinced, so he called Wayne Rooney into his office and asked him the same question. Rooney didn’t know and was sent away to think about it and told to “come back with the right answer.”

Rooney, being far from stupid, immediately sought the help of Van Persie, who was able to give him the correct answer. Rooney returned to Sir Alex’s office and the following conversation ensued:

Rooney (confident): “I know the answer boss, it’s Robin Van Persie.”

Sir Alex (fuming): “You’re totally wrong, get out you idiot!”

Rooney (confused): “I’m sorry boss, but what is the answer.”

Sir Alex (still furious): “It’s obvious; it’s Petr Cech.”