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Launch: New broadband television service BT Vision

4 out of 5

For many people, the Freeview revolution has been a great success for UK television. However, for anyone looking to the future of TV, the current Freeview roll-out has been a dead end street due to the boxes' lack of return path and processing power.

BT Vision should change this. By offering a Freeview personal video recorder with broadband connected to the back of the box, it allows newly emerging TV services, like catch-up and video-on-demand, to be offered on a pay basis alongside free channels.

There are strong content partners for these on-demand services, including Universal, Premier League football, Disney and MTV.

The big question is whether this extra content and functionality is sufficiently compelling to win customers. They either have to attract people who do not currently pay for TV, or steal customers from the other digital platforms. Given the complexity of the service, BT appears to have a hard communication challenge ahead.

People without a digital box will be hardest to convert, as they are either the least sophisticated parts of the market, or those for whom pay TV holds little interest. Existing Freeview consumers need to be convinced the extra content, functionality and services are worth paying for.

Football and movie fans probably already have a subscription to another service and will need to be enticed to switch. However, they may turn out to be the easiest to recruit, as they have seen the benefits of future TV and are able to compare features and funct-ionality with the eye of an informed consumer. Our research shows that there is dissatisfaction among these groups about the amount they pay for TV. The existing platforms will need to lock these customers in with unique content or services.

BT Vision's proposition is highly competitive in every area except live sport. For those who need to see the live games not shown on a terrestrial channel, BT Vision may not be attract-ive. For everyone else, Vision is a highly compelling new service - the biggest challenge will be explaining why.