BTs blurred vision

BT has long faced criticisms of its marketing talents. Here is a technology provider gifted a quasi-monopoly of the nation’s telecommunications. Why, argue the critics, should it bother giving customers good service or build brand trust when it complacently controls the lion’s share of the fixed-line market?

Its ads through AMV.BBDO may be among the UK’s most celebrated campaigns, but isn’t BT just bludgeoning the populace through sheer volume of media spend in the absence of any fundamental customer proposition?

Now the telecoms giant has the chance to prove its critics wrong with BT Vision, its television service delivered through a broadband connection. Get this right and BT can demonstrate that it is more than a dreary utility provider, an anorak-wielding technology company that struggles to provide any added-value sparkle to its services.

So far, however, its vision still seems somewhat blurred.
BT Vision celebrates its second birthday next month. But it has few reason to rejoice, having woefully undershot its performance targets. It has attracted 340,000 users, way below the numbers it needs to meet its goal of 2 – 3 million customers by 2010. Its announcement this week that it will be the first internet television provider to offer a catch-up service for ITV programmes is a step in the right direction, though is hardly the breakthrough BT Vision needs to boost its fortunes.

The service was created to defend BT’s consumer offering from the encroachments of rivals such as BSkyB, which is moving on to BT’s home turf by offering a bundled package of broadband, television and telephone services. But potent marketing is rarely born out of defensive strategies. It is easy to be cynical of BT’s commitment to television. While rival Sky has relentlessly promoted its TV, telephone and broadband bundle, BT has done just two significant campaigns, launch ads in May 2007 and a recent execution of its Kris Marshall soap opera ads.

Then again, BT argues that its foray into TV is a long-term project. It claims Sky took two years to sign up 300,000 customers to its Sky service.

BT Vision is available to the company’s rapidly growing numbers of broadband customers, who can take up the offer of a free personal video recorder for the Freeview channels. They can then can add extra paid-for content, such as kids programmes, a few films and Setanta Sports.

The good news for BT is that 80% of customers are taking the paid-for services, rather than just signing up for free access to Freeview and a PVR at BT’s expense. But it really needs to boost the content it offers. And that means getting Sky’s football and films. Even Gavin Patterson, chief executive of Vision’s parent company BT Retail, admits he subscribes to Sky so he can watch all matches played by his beloved Liverpool.

BT is pinning its hopes on regulator Ofcom and its review of the pay TV market. The regulator has recommended forcing Sky to make its premium content available at wholesale prices to BT. Again, some may view BT as seeking a legalistic solution to a marketing problem. BT argues that it is forced to allow Sky to use its telecoms infrastructure, but this is not reciprocated by requiring Sky to make its content available.

Some have cruelly suggested that BT should leave marketing to the professionals. Chief executive Ian Livingston, who took up the top role this summer, is likely to come under pressure to consider a break-up of the group. BT Retail – the residential and small business division accounting for about 40% of BT’s revenues – could be spun off, leaving a core of technology, infrastructure and corporate business services. Just as it spun off its mobile division Cellnet to create O2 – now the UK’s number one mobile operator – BT Retail might perform better if it were freed from the utilitarian chains of technology that bind it into the larger group.

Much will hinge on the performance of BT Vision. Get this right and the company will prove that being part of a giant technology corporation is no barrier to marketing success.

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