In less than three weeks BT has doubled the number of households registered for its new sport channels, announcing today that it’s passed the one million mark.
Anyone who has tried to call BT in the last week or so won’t be too surprised by the announcement – the firm’s call centres have been so busy that waiting times have been horrendous.
Even on Twitter, the BT Sport and Care teams have been apologising for delays in answering due to being “extremely busy”.
The chances must be good that the one million plus homes who’ve already signed up will be joined by another 250,000 or so by this weekend when the Premier League kicks off.
As some point out, BT aren’t saying how many of the sign-ups are getting the channels for free and how many are paying, but it’s wrong to be fixated on this because BT has always said its forray into sport is about retaining and growing its broadband business.
Let’s quickly remind ourselves of the offer:
All BT broadband customers with 12 months or more left on their contract get the channels free on their smartphone, tablet.
Plus, if they’re on one of the firm’s BT Vision Packages or have a Sky+ box, they can watch on their TV. Those who choose not to get BT broadband but have a Sky+ box can pay £12 (SD) or £15 (HD) for the channels.
What does this mean for customers and BT?
Existing customers who have more than 12 months on their contract are getting access to genuinely premium content for no extra cash – that’s the sort of deal customers love because it offers real, tangible value for money.
And customers who are happy with a supplier are less likely to think about moving which is good for BT.
Those with less than 12 months who want to take advantage of the free channels must extend their contracts, guaranteeing their money for another year without BT having to negotiate lots of individual retention deals.
That’s also good for BT because it’ll be able to wean customers off of costly discounts by increasing the perceived value of its packages.
Then there are new broadband customers who join BT for the free sport, each paying a minimum of £25.45 per month (all of which is new money for BT) and all of whom can be targeted for upselling to a higher cost package or bundle.
With both these groups, anyone who later considers moving but wants to keep the sport will have to factor in an additional £12 per month for a standalone BT Sport subscription.
Put it another way, BT just made their competitors £12pm more expensive for switchers. That’s a pretty clever thing to do.
The third group of customers signing up for BT Sport are those with Sky TV and non-BT broadband who are paying for the channels. Their money will be welcome but BT will be looking to exploit their direct relationship with the customer to sign as many of them up to its own broadband product as possible.
Customers will be told how they’ll save £12pm just by moving broadband providers and maybe even offered new ‘free HD’ deals as an additional sweetener.
When you see platform fans and snarky headlines poking BT about sign-up rates for paying customers and viewing figures, remember that BT Sport has never been about selling high numbers of TV subscriptions, it’s a defensive move to shore up and expand BT’s core broadband business.
The company could have tried to do the same by giving everyone who renewed a free iPad but while that may have worked out cheaper than sports rights, it’s a one-off giveaway easily matched by a well financed competitor.
Sports rights on the other hand are a lot harder to come by than a bulk deal on some tablets and a lot of customers will simply not consider moving if it means converting free top tier football and rugby into an additional £12 per month outgoing.
Whether that number is high enough to justify the investment we’ll probably only know when BT bids (or not) on the next wave of major rights. But if the gamble pays off, it’s hard to see how competitors other than Sky will be able to retaliate.