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published:
07-Jan-08
territories:
UK
categories:
Marketing deal
Xbox set-top launch on BT Vision
UK IPTV service BT Vision is to become the first operator to offer the Xbox 360 as an alternative to a set-top box for its TV service. From mid-2008, BT will begin marketing Microsoft's game console as an option for new and existing BT Vision customers, allowing users to view BT Vision applications and services via the gaming platform.
At the beginning of 2007, Microsoft stated that its Xbox would be made available as a choice for services running on its Mediaroom IPTV solution, although no dates or partners were confirmed at that time. In November of the same year, Sony's PS3 began its life as a set-top box on South Korean telco KT's service MegaTV, beating Microsoft in the race to deploy a console in the TV space. However, as Screen Digest noted at the time, the dynamics of gaming in Korea do not represent a hugely attractive market for the PS3, the PC being the games platform of choice. The UK presents a different face though - 2m UK consumers have already taken Xbox 360s, and Microsoft, well aware of the console's current success in the country, will be looking to boost penetration further through this deal. Bundling options have yet to be announced, though it is unlikely that BT would forgo the opportunity to increase its currently modest rate of additions by failing to capitalise on a number of potential marketing partnerships with Microsoft.
Our take...
While this is certainly not a bad sales move from both Microsoft and BT Vision, there are a number of issues presented by BT's service that will certainly hinder the usefulness of the marriage.
•The first problem is that of content: BT Vision relies on over-the-air digital terrestrial transmissions for its linear TV component - this includes both Freeview channels and Setanta Sports. Xbox 360 consoles do not come equipped with a DTT tuner, so cannot receive linear channels when used as part of BT's TV service. Furthermore, this also means that the Xbox's potential functionality as a PVR lies wasted.
•Secondly, BT relies on its on-demand content for making any money directly from the TV service - films, sports, TV series and events are all available through BT Vision on-demand. The Xbox however, gives owners access to the Xbox Live marketplace, allowing users to download films and TV series. As prices are typically lower on the Xbox (the largest difference is between blockbusters at £2 on Xbox Live compared to £2.99 on BT Vision), a consequence of programs being downloaded rather than instantly streamed, the potential exists for Microsoft to undercut BT's own service. Considering that films make up as much as 40 per cent of BT's on-demand revenues, this is a serious consideration.
• While not applicable in the UK market, PVR functionality is sub-par compared to specialised devices - the hard disk is relatively small (120GB for the Elite version). While additional disk space can be bought (with a normal PVR, a whole new device would have to be bought), this would be at considerable extra cost for the consumer and is certainly not a selling point.
This said, there are a number of advantages to the agreement. Subscribers to BT Vision will have the option of taking BT's V-box as well as an Xbox, allowing them some multiroom capacity, whereby linear programs can be recorded and watched on the V-box, and on-demand programs viewed on more than one television, through the V-box in one room and the Xbox in another. The only pitfall with this option is that there may be insufficient bandwidth at the consumer end for multiple streams of content, preventing two on-demand videos from being watched simultaneously.
Another plus is that the Xbox brings with it HD content. While BT Vision is not currently capable of delivering streamed high-definition (HD) content to the home, Xbox Live makes available a number of downloadable HD films. While BT will not make any money through these films, the advertising opportunities they present could prove to be invaluable in light of BT's current deficiencies.
Lastly, there is likely to be substantial overlap between BT's 4m broadband customers and Microsoft's 2m Xbox users. The addition of even a fraction of this number to BT Vision's tally will buoy numbers considerably and, as a consequence, on-demand buys (undercutting accounted for) at potentially minimal costs for BT, especially if the users do not opt for the V-Box and the associated installation fee.
Advantages considered though, in the UK at least, the Xbox will still only prove to be useful as a complementary item to BT's V-box, not as a substitute. Neither BT nor Microsoft is able to take advantage of the full capabilities of the Xbox in its capacity as a set-top box, and are unlikely to be able to do so in the foreseeable future. Microsoft is likely to find more success when it launches with other partners in other markets; for instance with Deutsche Telekom in Germany or AT&T in the US, where streaming live content into the Xbox will not present a problem. In these markets, the Xbox can realistically be marketed as a media centre - playing DVDs, live TV, games, music etc all through one device. Until it does launch elsewhere though, the Xbox can only really be seen as a marketing tool and not a serious stand-alone proposition in the pay-TV market.
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01-Jul-08
territories:
Albania, Austria, Belgium, Canada, China, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Italy, Japan, Korea. Rep [S], Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Russian Federation, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Thailand, Turkey, UK, USA - Asia-Pacific, Benelux, Central and Eastern Europe, Europe, Africa and Middle East, Nordic Region, North America, Regional Totals
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published:
20-Jun-07
territories:
Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Ireland, Israel, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovenia, Spain, Sweden, Switzerland, UK
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pay and top-up DTT as well as penetration numbers for cable, DTH and IPTV.
published:
21-Jan-06
territories:
Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Serbia & Montenegro, Slovakia, Slovenia, Spain, Sweden, Switzerland, UK, Ukraine - Central and Eastern Europe
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European IPTV: Market assessment and forecasts to 2009
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published:
16-Nov-05
territories:
Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland, UK, Slovenia
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published:
26-Mar-08
territories:
France, Italy, Spain, UK, Germany - Western Europe
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published:
26-Mar-08
territories:
Belgium, France, Germany, Italy, Netherlands, Norway, Poland, Spain, Sweden, UK - Europe
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published:
22-Feb-08
territories:
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published:
23-Jan-08
territories:
Austria, Belgium, Czech Republic, Estonia, Finland, France, Germany, Greece, Hungary, Italy, Latvia, Lithuania, Netherlands, Norway, Poland, Romania, Russian Federation, Slovakia, Slovenia, Spain, Sweden, UK, Switzerland, Portugal, Ireland, Denmark - Central and Eastern Europe, Europe
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published:
23-Jan-08
territories:
France, Germany, Italy, Spain, UK, USA - North America, Western Europe
categories:
Market data/forecast revision, General market development
Vincent Létang
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Western Europe
ARPU
Broadcasters discuss online TV consolidation