UK IPTV operator BT added 74,000 television customers across the BT TV and EE TV brands in Q2 2016, bringing its total subscriber base to 1.6 million. As BT part of its EE integration strategy BT has extended access to the BT Sport service to EE post-pay subscribers. As a result, customers with an EE TV set-top box now have access to live sports via the BT Sports application, accessible via the set-top box and mobile devices.
Fellow UK IPTV operator TalkTalk saw its television subscriber base shrink by 23,000 in Q2 2016, while its broadband base decreased by 9,000. However, the company’s overall RGU performance was bolstered by a reduction in mobile and fibre churn leading to an RGU increase of 6.8% year on year. TalkTalk continued its integration of the Blinkbox brand during last quarter, relaunching the service in April as the TalkTalk store on both the company’s Youview set-top box and in third-party app stores such as iTunes and Google Play.
Meanwhile, satellite operator Sky sustained its customer growth in the UK and Ireland, increasing its total customer base by 93,000 in the last quarter, which included 31,000 new TV additions.
IHS Markit estimates that of the 74,000 quarterly net additions to BT and EE’s combined television base, 60,000 are attributable to BT’s core television proposition. Year-on-year, this translates to a 26.7% increase in BT’s core IPTV subscriber base, which is based on the YouView platform. During this time the operator has launched a UHD sports service aimed at its premium fibre customers, and expanded the reach of its sports channels by offering them to customers of its EE and Plusnet subsidiaries. In its latest set of results, BT reported that audiences for its sport channels were up 58% this quarter, with over six million people tuning in to watch the UEFA Champions league final.
In October 2015 TalkTalk suffered a high profile security breach resulting in 157,000 customer records being accessed. The breach generated a great deal of negative attention for the operator, however intense competition from BT and Sky suggests that the hack is not solely responsible for the company’s declining customer base. Over the past 6 months Sky has promoted a low priced triple play package, a move which appears to have prompted a response from BT. This has resulted in increased competition for TalkTalk in the budget triple play space.
With both Sky and BT also promoting unique content offerings in addition to aggressively priced triple-play packages, TalkTalk has aimed to leverage its acquisition of Blinkbox and a low cost quad-play solution to level the competitive playing field. The rebrand of Blinkbox to the TalkTalk store and integration of the store into the TalkTalk set-top box gives customers new content mobility options, allowing access to their purchases on mobile and tablet devices, while the TalkTalk TV app provides access to live streams of select channels. However, with both BT and Sky offering similar services to their customers, TalkTalk will face strong competition in this space also.