Media: All about ... The launch of BT Vision

Can the telecoms giant's new service crack the TV market, Ian Darby asks.

In the old days, when the utilities had monopolies, you knew where you were with BT. Salt-of-the-earth characters such as Bob Hoskins coaxed us into spending more time on the dog and bone with dear old mum and that was about it.

Things are obviously more complex these days as BT diversifies in the face of increased competition in its core telephony area. Its latest move is into the television market with the launch of BT Vision. It is expected to be unleashed in September although an exact date has not yet been confirmed.

The service will offer subscribers a set-top box that will combine a basic Freeview package with a more advanced internet protocol TV service that BT argues offers more advanced interactivity than rival offerings. BT has been talking up the interactive nature of the service. Ben Verwaayen, its chief executive, has claimed the service is not a direct rival to Sky because it offers a more personal experience.

BT Vision's content will combine digital TV with on-demand films via a broadband connection as well as music and radio. BT's set-top box will also provide a personal video recorder service.

It is set to get out into the market and talk to advertisers about BT Vision and its big sell will be interactivity around content. Paul Longhurst, the media consultant who has worked with BT on projects, says: "It will be a specific sell about involving advertisers more closely with content."

Critics argue BT will struggle to turn a profit with the service, with some analysts estimating that it will have just 800,000 subscribers by 2010. Compare this with Sky's target of ten million.

BT is serious though and has invested millions in management with broadcast experience and content deals with Hollywood studios and production companies.

1Dan Marks, the chief executive of BT Vision, joined BT from Universal Studio Networks. He appointed Antony Carbonari, a senior Disney executive, as the director of interactive and commercial media in February. At the time, Marks said that the appointment "underlines BT's commitment to building a world-class television service staffed by the most talented team of entertainment professionals". Part of Carbonari's task is to build a commercial operation to sell BT Vision to advertisers.

2BT Vision has struck a series of content deals with the likes of Paramount, Warner Music, the UK film distributor Momentum, the BBC and Endemol to provide programming for its on-demand service. The most recent deal was struck last week with Universal Pictures. Films will be available to BT Vision subscribers on the same date as the UK DVD release.

3Carbonari is busily building a commercial team. Last week, he hired Jeremy Rosenberg, the online manager at ITV Sales, as its advertising and sponsorship manager. Rosenberg's task will be to sell IPTV advertising for BT Vision, which could include interactive "red button" advertising and, eventually, dedicated advertiser channels. Carbonari says BT Vision will have an in-house team and also that some commercial deals will have been struck by content providers with advertisers. "We have no intention of building a massive sales force, but who knows in the future," he says.

4As well as boosting Freeview viewing, BT Vision's main offer for advertisers is likely to focus on two main models: selling dedicated advertiser locations and attempting to build dedicated advertiser channels. Carbonari argues that BT Vision's IPTV system will make accessing DALs more of a satisfying experience than is currently available. "We're looking at DAL providers and will offer a template to make it easy for an advertiser to buy a DAL. The beauty is that the user experience will be fast - a lot of DALs are clunky but we hope our interaction and response rates will be higher."

BT Vision is also keen to push the DAC model further than it has been taken by the likes of the Audi Channel on Sky Digital. Carbonari comments: "The beauty is we can have content with full navigation and on demand, viewers won't have to wait for a time slot to come around. We'll eventually have a significant number of DACs - for cars, you'll be able to search by model, and for a financial company, by specific products. The opportunities are endless and this is the beauty of this platform."

However, critics argue that it offers little beyond what is already available on advertisers' websites. WHAT IT MEANS FOR ...

ADVERTISERS

- BT Vision will offer a range of activity from sponsorship of on-demand programming, interactive ads around programming and advertiser channels.

- BT imagines that the service will be most useful to advertisers who can enhance the viewer's entertainment experience - such as fast-food companies who can offer a tailored direct ordering service or audiovisual companies who can show off the capabilities of their latest products.

- Carbonari says: "We can combine the powers and branding attributes of the 30-second spot with the targeting and response rates of the web."

- Because BT is a new entrant to the broadcasting market and because Sky and Freeview are so well established, critics suggest that BT Vision will struggle to build a mass audience for its platform. However, this won't worry advertisers wanting to target a niche demographic or viewers in particular homes or regions.

- BT is yet to market the service heavily to the industry. Toby Hack, the head of OMDtvi, says: "I'm not aware that they've taken it around the market. However, I suspect a brand the size of BT will do everything possible to get the offering right."

BROADCASTERS

- BT argues that BT Vision will not be positioned as a direct rival to Sky. However, its claims for greater interactivity will have other broadcasters watching with interest.

- The launch could be a catalyst for faster development of interactive advertising generally with other broadcasters launching more sophisticated packages to compete with BT.