The battles between BBC, ITV, Channel 4 and satellite TV are always reported; those between cable and dish less frequently. But, with BSkyB and the cable companies valued at billions of pounds, there’s a lot at stake. And the mighty BT is involved as well.
BT is involved because three out of four cable franchises sell telephone services alongside television – and at a discount. This has enabled cable telephony – in cable areas – to make inroads into the BT monopoly. Close to one in five homes in such areas now has a cable telephone service. The number of cable homes grew by nearly 50 per cent last year; the number of cable telephones lines by 130 per cent.
A big advantage broad-band cable had over BSkyB was the joint offer of TV and telephone services. Then, last November, an eight-page supplement from BT in the Sky TV Guide (more than 3 million are distributed free every month to Sky satellite subscribers) screamed out “Save 20 per cent off your BT calls”: BT and Sky had got together.
BT had a special offer for Sky subscribers: a few pounds off its existing PremierLine and Option 15 discounts for heavy users. This was intensely promoted as a special deal for Sky customers.
Continental Research monitored the response: by the end of November 35 per cent of Sky subscribers knew of the BT offer. This had risen to 40 per cent by December and 65 per cent by March this year. Continental estimates that up to 100,000 had taken up the offer by March this year.
In the four quarters of 1994 cable added 62,000, 85,000, 109,000 and 148,000 lines, respectively. If this growth rate persists through 1995, 1 million cable lines will soon be in place – 1.5 million not long after.
A lot depends on how well the Sky/BT link works, and whether new discounts from BT – directed at both cable and dish homes – erode cable’s telecom price advantage. Then it will be customer service that matters – not just price.
However, in the fight for telephone lines, cable must not forget its duty to provide customers with an excellent television service.
If cable wants to seize the television initiative then it needs to provide first-rate, unique cable TV programming.
With better programmes, cheaper telephones and a locally-based personal service, Zenith’s prediction of more cable homes than dish by 2003 could become a reality.