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Setanta Stepping Up Sports-Rights Rivalry With BSkyB

By | July 23, 2007

      BT is rolling out a sports-content package which promises customers a low-cost option for watching Premiership soccer. BT hopes its offering will tap into a market unwilling to pay more expensive subscription charges to watch soccer on BSkyB’s direct-to-home (DTH) platform.
      BT’s sports package includes Setanta Sports, which shares Premiership rights with BSkyB, as well as BT’s own package, BT Vision Sport. Setanta has scheduled 46 live Premiership games this season, holds the rights to broadcast PGA golf from the United States and also features nine sports channels. BT Vision Sport offers a “near-live” service that includes 242 Premier League matches as well as games from other leagues and cup competitions.
      BT Vision Sport is available at 4 British pounds ($8) a month, and Setanta’s sports package costs 9.99 pounds ($20) a month. The two packages will cost BT Vision subscribers 12 pounds ($25) per month. BSkyB’s package will cost subscribers 34 pounds ($70) per month.”
      “Since its launch last autumn, BT has signed up 20,000 customers to Vision,” Mike Cansfield, telecoms practice leader at Ovum, said in a research note. “Currently it is adding-up 2,500 per week — mostly existing customers but some new. On this run rate, it would top out at 85,000 at the year end — short of its 100,000 target. Clearly BT hopes sport will give the boost required to kick-on past this target.”
      Richard Brooke, executive director of Setanta Sports and former CFO for BSkyB, told Satellite News this is not just about competition with BSkyB. “We see ourselves as cohabiting with Sky,” he said. “Our job is not to take on Sky. We don’t do that. We partner with them in terms of their platform. We compete in the sense we are both looking at sports subscribers, but most subscribers will take both packages. We are very happy to sit alongside Sky in a marketplace which has the ability to house more than one player. The acquisition of rights is not the start of a war. It is more a case of us establishing our position, adding to the market and giving an element of choice to consumers. That is very healthy for the market generally.”
      The majority of pay-TV subscribers in the United Kingdom receive their service via DTH platform, with BSkyB serving 8 million subscribers. Setanta, a relative newcomer to the U.K. market, wants to establish itself as a cross-platform offering — available on DTH, cable, Freeview and broadband, Brooke said. “The U.K. is a DTH-dominated market,” he said. “We will pay due attention to that factor, but we aim to give the same viewing experience across different platforms.”
      Setanta’s strategy is not without risk. Acquiring sports rights is an expensive proposition, and with the new soccer season around the corner, Setanta will need to attract subscribers at a strong rate to get a return on its investment. “Setanta’s costs will increase significantly from August when we have the new rights payments flowing to the Premier League,” Brooke said. “Clearly, we will have to build up our subscriber base over a period of time to cover that additional cost. We have strong support from our investors and shareholders who have given us the resources to enable us to do that. We have a set financial structure which is designed to get us through that growth period.”
      One area where BSkyB would appear to have the advantage is in high-definition (HD) content, where BSkyB has a subscriber base of nearly 300,000 and Setanta has “not decided” on its strategy. “It is not a short-term priority for us, but it is under review,” Brooke said.
      While Setanta is making its biggest push in the United Kingdom, the channel provider also wants to increase its presence in the United States, Brooke said. “We currently operate a Setanta Sports service on DirecTV and on broadband featuring European sports for the North American market,” he said. “We are looking to expand the distribution of Setanta Sports beyond DirecTV onto other satellite and cable platforms and also extend into Canada as well. There is growth there.”

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