Friday, 16 August 2013

BT Sport : the new BSB?

You've seen the hoardings and the tv commercials. Not forgetting the newspaper ads. I think I even saw a spot for BT Sport in the cinema ads.

But the chances are, you haven't watched the programmes.

BT Sport has been with us for a couple of weeks, after a multi-million pound launch. More importantly, their first audience figures have emerged - and they must be very worried at BT HQ.

The Clare Balding Show - much-publicised and with a good line-up of contemporary sports stars - got just 1200 viewers. 1200.

The opening night of the Scottish Premier League was seen by 24,000. Which is just half the amount of people who actually attended the match.

BT Sport's loud trumpet will tell you that they've got 500,000 subscribers. But the truth is that only 23,000 of those are actual new subscribers. The other 477,000 are pre-existing BT Broadband customers who get a free "subscription".

This all reminds me of a time back in 1990 when British Satellite Broadcasting launched itself into Sky's face with a whole new service. Back then Sky was analogue and only had 1 channel. BSB came along with 5 channels and a unique digital transmission system. Its marketing coup was the "squarial" - a small, square satellite dish which made the enormous Sky dishes look antiquated straight away.


It was technically better. Each receiver could be uniquely addressed by the transmission system - which meant that they could send targeted ads in the breaks, not just generic. The system would know which of its customers liked golf - and would send them golf commercials. Anglers would get fishing - and so on.

All good theory. Never got a chance to work in practice. I know. I was there.

Just as BT Sport has taken-on an expensive cast of presenters, so BSB signed a known line-up of talent. Selina Scott, Jools Holland, me. A gang of others. And we all had handsome contracts negotiated by our astute agents. At BSB, money flowed better than mercury. On their press launch day, I was already committed to a motor race in Leicestershire. They thought nothing of hiring a helicopter and paying for Battersea Heliport to open on a Sunday, just to get me back for a 1 hour appearance. For which they also paid a fee in addition to my contract fee.

Selina and I used to giggle in the corner, having come through the austerity of the BBC.

Launch night was a disaster, unmatched even by BT Sport. I had been contracted to present a number of shows within the NOW Channel. There were 4 other channels: Movie, Sports, Galaxy the family channel, and the Power Station music channel*. On launch night I started a series of weekly review shows, transmitted live from BSB's swish HQ studios in London.

The only way you could receive BSB was with a dedicated BSB receiver and a squarial. Just before transmission of the first show, I learned how many receivers they'd managed to install after their expensive marketing campaign.

2.

In the whole of the UK, we had 2 viewers. And - wait for it - one of those was a technical bod at home checking the signal.

It didn't get much better. The squarial was proving difficult to manufacture. Retailers demanded priority units for their shop displays - and the public just weren't that interested. After all, satellite tv was in its infancy in the UK. And those that had an analogue dish couldn't receive BSB.

A classic case of the tv industry ignoring the consumer and powering ahead with differing technologies. We've seen that all before.

After a few months, the vultures were circling over BSB. There was a dire need for more funding, because revenues were not coming in. I was asked to present a promo that was only going to be seen by 16 city bankers as part of the plea for pounds. It was like a Comic Relief appeal. Except, I got paid a fat fee without asking.

On the day of the shoot I turned up at Marco Polo House, BSB's HQ, to discover a full movie tech crew. Lights, cranes, 40 people. All to shoot the links for one 15 minute promo. They must have spent £50,000 on those 16 bankers.

All to no avail. Funding was not forthcoming.

Rumours abounded. Budgets slashed. Programmes suspended or cheapened. Then, I was asked one day to visit my immediate boss. I went into his office just after he had been fired.

By Rupert Murdoch.

Murdoch was King Vulture. He pounced on the floundering corpse of BSB, "merging" it with Sky and renaming both operations as British Sky Broadcasting.

The BSB dream was over. We all got paid-off in full. My contract was for 12 months - and it was over in 3.

I visited BSB once more, just days after the curiously trenchcoat-wearing Murdoch hatchet men had entered the building. The car park was full of shining BMW 3 & 5 series - probably over 100.

I was told that these were the company cars reclaimed from fired executives of BSB.

A financial disaster of enormous size. At that stage, one of the biggest in UK company history and certainly the biggest in broadcasting.

What was learnt?

Plainly, not a lot. Someone appears to have sold the "bible" to BT. Although I'm glad they left the plans for the squarial in the bin.

In closing, the technical side of the BSB offering was brilliant. And it's a great shame it didn't make it to the Sky platform. Smaller dishes eventually came to the UK and people felt more comfortable having those on their property, rather than the old giant Sky dish. But something the size of the squarial would have made that transition to satellite tv happen earlier.

* On the Power Station there was a new presenter. A gangly, ginger-haired, slightly spotty boy. Called Chris Evans.

4 comments:

  1. But there's a big implicit open question: if BSB had limited their spending and had enough capital to last, could they have become wildly profitable like Sky? It seems probable.

    Personally, I think BT's broader bet is a sound one, even if their strategy of over-spending on sport might not be the best way to go about it.

    It's 2013. Pay TV is big business and the market is dominated by Sky's monopoly. Sky's service is incredibly expensive, has huge margins and is based on increasingly dated satellite technology.

    It seems inevitable that someone will profit from Internet-based television. IPTV opens up the market by reducing the barriers to entry by vastly reducing infrastructure costs and, in theory, providing better technology than satellite allowing fair competition with Sky for the first time in recent memory.

    BT are investing a lot of money to try and ensure it's them.

    BT are hoping BT Sport will drive FTTC (BT Infinity) subscriptions and that will drive pay TV subscriptions, and it will give them the edge over any other potential FTTC/IPTV competitors. BT are offering subscriptions with less content (largely because Sky control a lot of channels to prevent competition) but at a fraction of the cost of Sky.

    Given that BT's FTTC IPTV service began literally two weeks ago, I think it's too early to call it a failure. It certainly doesn't help that FTTC penetration isn't great; currently less than a third of the country can get Infinity.

    I think it makes sense for BT to invest aggressively in customer acquistion early on, given that they're never going to leave the market. It makes it hard for others to enter the market and they can amortise the investment over the lifetime of the contract. I'm just not sure spending a billion pounds on sport is the best way of doing that.

    There is certainly one big difference between BT and BSB: even if their billion-pound bet doesn't pay off, BT won't go bust.

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  2. There's already quite a lot of IPTV content from Sky that you get when you connect the STB up to your network. Most of it is films on demand, tv on demand etc... I'm sure they'll make the transition to providing broadcast channels over IP in time.

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  3. I was offered BT sport Apart from having no licence, no interest in sport or tV in general, I assumed that the sports that would be uppermost would be men's football, cricket, rugby and motor racing, . A bit of racing and athletics but no women's sport, no cycling, or swimming or snow sports, no hang gliding, croquet, Asian games, polo, sailing, freediving or anything of any interest whatsoever.

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  4. and BT quietly offshores jobs to pay for this (despite the fact that BT's official line that they are to be bringing jobs back to the UK).

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