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BT must avoid clouding its Vision through careful marketing

The telco is likely to give the competition a run for its money with its recently launched on-demand video broadband service, but it mustn't overlook key marketing issues says Ovum

By Maggie Holland, 5 Dec 2006 at 16:03

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BT's on-demand video broadband brainchild, BT Vision, is likely to prove a real contender to existing pay-TV supremos NTL and Sky, but its success rests on how cleverly it markets the new service, according to analyst Ovum.

The telco launched the new offering yesterday, with plans to provide 40 Freeview channels and 1,000 hours of on-demand content to an initial user base of up to three million people.

"New interactive services, including video telephony, rich gaming and gambling, are on the horizon for next year," said Annelise Berendt, the senior analyst leading Ovum's broadband content research.

"If the consumer appetite for such services is strong, BT will certainly give the competition a run for its money."

Despite BT's obvious success in other areas, and the fact that it has gone some way to future-proof its technology by ensuring HDTV readiness, market leadership in this area is not a done deal, according to Berendt.

She added: "BT's ability to continuously innovate will also be key. The competition is not standing still and there is a danger that BT will find the goal posts moving faster than expected."

The real differentiator and competitive advantage lies in how BT Vision is sold to the masses, according to Mike Cansfield, principal analyst and head of Ovum's Strategy practice.

"BT itself experimented with video on-demand (VoD) services in the 1990s," he said.

"So, on the one hand BT is playing catch-up. But to say that this is a 'me-too' service is to miss the point. This is strategically important for BT, for the TV market, and customers too....The key to how successful BT will be with this move is how well it executes its marketing strategy," he said.

Cansfield added: "This is much more than acquiring customers (it is talking of two to three million in the years ahead, approximately five per cent of UK households), but how well it competes with NTL and BSkyB, and whether it can explain to customers the power they now have to take control of what they view and when they see it. This is why the launch is the start of a new era in the in-home entertainment market."