BT is to scrap its traditional pay-TV packages and allow customers to pay for prime content such as Premier League football on a monthly basis, as it aims to keep pace with the flexibility offered by streaming services such as Netflix and Disney+.
BT has traditionally used its multibillion pound portfolio of rights, from Champions League to Premiership Rugby and boxing, to lock consumers into long-term contracts bundling TV packages with broadband and phone services.
However, the rise of streaming is dramatically reshaping viewer habits away from costly TV packages to more flexible options pioneered by players such as Netflix.
BT is to start offering a range of new flexible TV packages, such as for sport or entertainment, that customers can add, or drop, on a monthly basis.
“Being flexible is more in tune with how customers want to consume content in a streaming world,” said Marc Allera, chief executive of BT’s consumer division. “For example, the race for the Premier League title may be over in a few weeks and once that is done some viewers may prefer to spend their money on movie, or entertainment, packages. Or if families are going abroad on holiday in the summer they may want to switch off a sports subscription.”
BT’s bolt-on monthly packages run from £10 for entertainment to £40 for “Big Sport”, which includes the “best of BT and Sky Sports”. To build or change a TV package, which can be done online without the need to ring a customer service line, consumers will need to sign up for a BT broadband package for up to 24 months. Rivals usually require customers to sign up to a broadband package and a minimum basic TV package.
Allera said he hoped that the ability to so easily opt out of TV packages would not hurt the company’s profits.
“You could also see people spin-up [get more packages] given they can upgrade at will,” he said. “We have to respond to how customers want to consume TV – it is what we have to do to remain relevant.”
In December, BT launched a monthly pass to allow sports fans to watch its content without a contract for the first time. However, the new £25-a-month pass is primarily designed to attract the occasional non-BT customer. Under BT’s new strategy, broadband customers will be able to access all of its sport content for £15 a month.
Sky was first to respond to the Netflix threat by launching streaming service Now TV in 2012, offering a range of daily, weekly and monthly passes without the need for a TV subscription. The service, such as the monthly sports pass at £33.99, is primarily aimed at “pay-lite” viewers unlikely to ever become full subscribers, with pricing designed to ensure it does not damage its eight million core pay-TV base.