Kate Bulkley, Media Analyst.

YouView has it all to play for

By Kate Bulkley

Broadcast News

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For Broadcast July 12, 2012

Critical issue now is how to make it stand out, says Kate Bulkley

I arrived a bit late and very damp (this is a very British summer) to the recent YouView launch. Well it wasn’t so much a launch as a belated product unveiling, with YouView chairman Lord Sugar in top spot in the darkened GLC council chamber on the South Bank.

His YouView acolytes were lined up silently on both sides, and I have never been to an event where such a panoply of power players – including Adam Crozier, David Abraham, Mark Thompson, TalkTalk’s Dido Harding and Gavin Patterson of BT Retail – were not given a chance to speak. This was the Sugar show, no doubt about it.

He kept talking about the ‘carcass’ of YouView – ie, there’ll be more talk of meat later, but here are the bones of what the platform is meant to be. But the problems that face YouView are the problems that face all consortium projects. Lord Sugar was candid that agreeing a marketing and promotion budget was going to be “an interesting discussion”. Rather than giving us a figure, he admitted: “There is a limit to how much we can expect from retail [box] sales.” No wonder, at an eye-watering £299 a pop.

The marketing budget for this £70m project will depend on how much partners BT, TalkTalk and Arqiva want to subsidise the airtime sales businesses of ITV, Channel 4 and Channel 5. Lord Sugar said marketing wouldn’t kick off before BT and TalkTalk price their YouView packages with, one would imagine, heavy box subsidies.

He also told us that the target market is the 12 million Freeview viewers who do not want to pay a monthly TV subscription. But isn’t that missing the point? Freeview users have already drawn a line in the sand about paying for TV – they don’t want to do it. But YouView requires a broadband subscription to work properly. Enders Analysis thinks a far more reasonable target market is the 8 million homes that already pay for broadband. Another problem is that many new TVs, DVD players and games consoles can already connect to the internet.

There are other technical issues, but at least YouView’s backwards EPG and global search functions are much easier than that of my supposedly smart LG TV. Still in the YouView lab are social TV functions (think Zeebox), predictive recommendations (think Virgin Media’s Tivo and Amazon’s LoveFilm) and targeted advertising and mobile companion apps (think Google, among others).

So how will YouView fare? Clearly BT has skin in the game after writing a fat cheque to the Premier League. BT and TalkTalk understand that the ISP business is their future, and to win they need to be the ISP of choice and sell lots of bundled products. For the broadcasters, YouView is a way to extend the reach of their on-demand services, but lots of other devices can do that as well.

The critical issue for Lord Sugar is how to make YouView stand out to consumers and keep this diverse set of shareholders on the same track. On 26 July, the Olympics will be just a day away, and ITV will put out its results. But it’s also the day TalkTalk will announce its YouView rollout schedule, and it’s Team YouView that I’ll be watching. The platform may have missed the Games, but there is still much to play for.

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