BT Video Revenue “Wildly Optimistic”

According to research carried out by analysts CIT Research, British Telecommunications could be hugely over-estimating the potential for video-on-demand services offered across its telephone network.

By the year 2000 BT expected to have a base of 8 million subscribers, each paying annual fees of about £250 at today’s prices. This represents a penetration of about 33% of all UK TV households. However, CIT argues it is likely that the service would only be available to about three quarters of UK households, indicating a penetration of about 44% of the available universe.

According to CIT’s project director, Liz Baker, “Even assuming BT launched the service on 1 January 1996, which is highly optimistic, they would have to achieve a growth rate of two million sales per year. That would be four times faster than the take-up of the satellite TV dish, which is the fastest selling consumer electronics item ever launched in the UK. And 44% is a higher penetration than any pay-TV service in the world. The only fully commercial service with anything like the penetration levels BT is hoping for is cable TV in the US, but that has taken over 20 years to develop.”

Findings from Cable TV Communications in Europe 1994; available from CIT Research, £5,985.

Marie Thirlwall 071 493 9247.