The curious incident of the dog in the night-time
Raymond Snoddy comments on the latest financial results from BSkyB but asks us to listen out for what is not said – a lack of comment on the future potential of 3D TV. Additionally, the lack of communication from YouView on a confirmed launch date has given rivals (especially Sky) a long time to plan rival complimentary products…
Ever since the days of Sherlock Holmes it has been a duty to listen out very carefully for the dogs that didn’t bark – or for the important things that were not said. Listen carefully and you can detect a little mongrel at BSkyB that has been awful quiet in recent months.
This week’s results for the satellite broadcaster for the six months to the end of December were perfectly respectable for a recession, in fact more than respectable. Virtually everything the company does seems to be moving in the right direction.
Around 100,000 new households were added taking the total to a creditable 10.471 million even though you have to go to the third decimal point to register the rise. Revenue was up 6% to £3.4 billion with underlying profits up 24% to £772 million. Annual revenue per subscriber – the all-important number – rose to a new high of £544. TV growth was lower year-on-year by 40,000 but this was compensated for by more than 60,000 standalone home communication customers.
According to chief executive Jeremy Darroch BSkyB had a strong first half “with progress on all fronts.” As usual with Sky there were announcements about new services such as agreements to add the BBC iPlayer and ITV Player to Anytime+ and a new internet pay TV service aimed at the 13 million UK homes who do not subscribe to pay services. For some reason there didn’t seem to be any space to give any guidance on how many Sky subscribers are taking 3D TV services.
If there is any such guidance lurking somewhere in the small print the point is still the same. Sky is never shy about trumpeting its many success stories and at the very least 3D is not one of those for now. In fact, the silence is very telling. It is particularly so because the set manufacturers are falling over themselves to promote yet another reason for buying a new television.
The fatal thing for any new consumer electronic device is lack of word of mouth – positive or otherwise. People used to say HD television is really good. You wouldn’t want to go back to the old fuzzy pictures, particularly for sport. Positive word of mouth is roaring away for the iPad and the take up of Kindle and other electronic reading devices seemed to take off all by itself because it was seen as a usual and practical gadget. Have any neighbours or friends told you recently 3D TV is a must buy? I thought not.
The professional boosters of the electronics industry point out that 3D TV sales have been as good as those of HD TV in the 18 months since launch. You can even see headlines that say: “3D TV Sales Skyrocket in the UK” and Dixons have reported that 3D TV accounts for one in five new TV sales. A more realistic glimpse came last year when a senior Panasonic executive blamed Hollywood for poor 3DTV sales because most 3D films were simply not good enough – Avatar excepted.
Consumer research suggests the barriers to faster growth are the obvious ones – the glasses, the higher price point for 3D TVs and worries over a lack of standardisation. How to explain the contradictions and counter claims? Futuresource Consulting may have put their finger on it. They believe that within three years close to half of all UK television sets will be 3D enabled. But the problem is that most of those consumers will end up owning a 3D TV by default when replacing old sets and that sometimes consumers are even unaware of what they have bought.
It is entirely possible that 3D TV will follow the adoption curve of HD but at the moment that looks unlikely. It is even possible that we will all have the 3D chips in our future television sets without hardly ever donning the glasses to watch anything other than the occasional 3D movie. It certainly no longer looks the driver of new pay TV subscriptions, which is what Sky must have hoped when it played its usual pioneering role in the television business.
Until very recently YouView has been another dog that only barked on occasions. There was a noticeable woof when the chairman of the YouView consortium, Lord Sugar who had strayed off the set of The Apprentice, decided to fire the entire YouView marketing, communications and research team. This seems harsh given that there was nothing much to market or communicate and amid rumours of technical difficulties it is to be hoped that the new research team are better than the old. The silence on an official launch date has been deafening.
YouView was very firm that the launch would not come in 2011 and they were absolutely true to their word. Then it was “early” this year and now the talk is May. Of course the device that links the television set to the internet has to work and there is no point in going off at half-cock and there is probably little business advantage in linking a launch to the London Olympics.
However, the long period when the dog did not bark has given rivals a long time to plan rival or complementary products. It would be embarrassing if Sky, which says it is launching its new internet pay service in the first half of this year, managed to launch before YouView. Given Sky’s record in meeting launch deadlines you wouldn’t bet against it.