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BT Vision is go

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BT said it expects to sign up hundreds of thousands of subscribers for its Vision TV over broadband service within the year, with two to three million subscribing in the medium term.

At today's launch in London, BT consumer MD Gavin Paterson finally unveiled pricing for the service and promised 5,000 hours of instant on-demand programming by the end of next year.

BT isn't looking to make a big splash with Vision until well into the New Year. The firm will be concentrating on solid technical performance and honouring pre-orders, which it says run into thousands.

Tellingly, 2007 is when BT's deals with the FA Premiership and the Setanta Sports channel come into force and BT Vision will go live with its own sports service. Vision will have rights to show 75 per cent of Premiership matches either live or "near-live".

The value of sports content was amply proven by BSkyB of course. There's no word yet on how much BT will be charging for its version of pay TV's killer app.

BT claims to be among the first in the world to build a viable IPTV content platform.

"We think most people are well behind us," said BT retail CEO Ian Livingstone. It was even able to wheel out ever erudite Microsoft CEO Steve Ballmer to eulogise the importance of an event "that fundamentally changes how consumers are entertained". BT chose Microsoft to provide the software powering Vision.

An all-in monthly package of on-demand TV, music, kids shows and TV replay (the last week's worth of programming, currently only available for Channel 4) costs £14.

Installation for early adopters will clock in at £90, including a £60 engineer call-out. A self-install option will be launched next year. The set-top box, capable of pausing, rewinding and recording up to 80 hours of TV will be provided gratis and connects over wi-fi to the Total Broadband Home Hub. The Philips-built kit provides access to over-air freeview channels as well as the IPTV streams.

Content is also available on a pay-per-view basis, with the movies at £2.99 for 24 hours rental. TV shows will play for £0.99. BT is hoping it will attract pay TV commitment phobes by "passing you the control".

With an installed broadband user base of around 3 million, BT is presumably betting on the majority of them taking up Vision given its penetration targets. The minimum requirement for Vision now is a 2 Meg line, available to 90 per cent of the population according to BT. The Vision play is more complex than a simple attack on Sky and NTL's pay TV stranglehold; it's about winning and retaining broadband punters too.

BT is being cautious therefore about who it lets piggyback on its technology and content deals. It announced a partnership with Vodafone which will see the mobile operator provide BT-branded Vision services to its own customers. The two firms have a well established relationship, with Vodafone letting BT act as an MVNO on its network, and BT set to provide the wholesale broadband when Vodafone rolls out its converged packages next year.

Looking ahead, BT reckons its set-top box is future-proof with its HDMI port, but is banking on improvements in compression to bring on HDTV over broadband in shorter order than possible through massive network improvements.

Being first with a technology is always risky of course and Vision is a big product for BT. The former national telecoms monopoly said it is backing Vision with £100m over the next year. It is worth remembering however that BT's last annual results cleared £2bn in profit on revenues of more than £19bn. ®

Bootnote

The obvious turkey of the content deals is the one BT signed with Universal Music. Vision customers will be able to watch Universal Music videos for £0.29 a pop, or £6 per month for unlimited access. Unfortunately, by definition Vision customers have broadband, and access to YouTube. The sort of web-savvy yoof who might be interested in viewing such promotional material on-demand is unlikely to be interested in paying for the privilege.

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