Britain’s BT has pacted with Liberty Global-owned Virgin Media to offer its nascent BT Sport package on Virgin’s UK pay-TV service. The move comes just in time for the British Premier League soccer season which kicks off this weekend. The wholesale deal more than triples the number of BT Sport viewers, bringing the total to about 3M for the three channels (Virgin’s XL subscribers will get the channels for free and lower tier subscribers will be able to purchase them for £15.) Both BT and Virgin compete with Sky, the UK’s dominant pay player. However, Virgin also offers Sky’s channels meaning that following today’s BT pact, it becomes “the only place sports fans can enjoy every goal, try, penalty and heart-stopping sporting moment,” Virgin said in a statement. Sky, meanwhile, is giving Britain a “free day of football” on Saturday when it makes Sky Sports available to every UK household. As a rule, BT offers BT Sport 1, 2 and ESPN HD for free to its broadband customers.
BT has steadily increased its position in the sports rights arena, outbidding ESPN for 38 live Premier League matches for each of the next three seasons in a £738M deal in 2012. (It has since acquired ESPN’s UK & Ireland TV businesses.) At the same time, Sky is paying £2.3B over three years for 116 live matches. Other players have tried and failed to take on Sky in the sports game, but some media watchers say BT isn’t necessarily eyeing a challenge to its supremacy in that domain. Rather, BT’s advances are seen as a means to maintain and attract more broadband customers in a market whose growth is expected to slow in the coming years. In a June research note, Exane BNP Paribas analysts wrote, “BT Sport is all about customer retention and market share gains, as opposed to building a standalone TV business.” Managing director of the consumer business, John Petter, recently told The Guardian, “Everything is serving that strategy of broadband and fiber optic. We want to win new customers, up-sell to existing customers, and keep customers longer – and then there is wholesale.” Of today’s deal, BT CEO Marc Watson said that the company is “rewarding its loyal customers with free sport… BT has made a large investment in BT Sport and this is an important commercial agreement for us that recognizes the excellence of the channels. We are keen to make our services as widely available as possible and to do so via wholesale arrangements.”
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