Just before the start of the football season BT has reached a deal to make its new sports offering available to customers of Virgin Media. This will enable to recoup part of its estimated £1bn investment in the channels.
The three year deal brings BT Sport to about two million households who have Virgin’s XL package, tripling its reach to three million. BSkyB does not disclose how many of its 10.4 million customers take its sports channels. BT could receive £75m a year under the deal.
Just before the start of the football season BT has reached a deal to make its new sports offering available to customers of Virgin Media. This will enable to recoup part of its estimated £1bn investment in the channels.
The three year deal brings BT Sport to about two million households who have Virgin’s XL package, tripling its reach to three million. BSkyB does not disclose how many of its 10.4 million customers take its sports channels. BT could receive £75m a year under the deal.
The downside of the deal for BT is that it will substantially reduce its ability to attract Virgin customers to BT broadband, but the prospect of getting much churn looked pretty distant anyway. It is essentially a defensive move that shores up BT’s existing broadband subscriber base. For its part Virgin gets some serious sports content to put in front of subscribers upset by the loss of ESPN.
BSkyB and TalkTalk are yet to reach wholesale agreements to carry BT Sport. BSkyB customers can already access BT Sport via Sky’s platform by paying an additional subscription to BT.
TalkTalk has shown little interest in a deal for BT Sport, suggesting its customers are more interested in Peppa Pig than Premiership football. It is also disputing BT’s pricing of wholesale access to its fibre network.
BSkyB is confident that it can deal with the competitive challenge from BT, having already seen off the likes of Setanta and ESPN. But BT represents a different challenge. It is a high profile brand with considerable financial resources and is making a major investment in its offer.