Bad news for Sky - BT's free football gamble is working and its doubling down
Reuters / Andrew YatesFootball fans, you're in luck - BT broadband customers will keep getting free Premier League coverage.
On a full-year earnings call with reporters this morning BT boss Gavin Paterson hinted that the telecoms giant plans to keep giving its BT Sport TV channels away to broadband subscribers - at least for now.
Paterson said: "BT Sport standard definition is free. We haven't announced any plans going forward but we know how important it is to our customers."
BT first ventured into televised sports in 2013 as a way to win over more broadband customers by giving the channels away as a free add-on.
The move proved to be wildly successful, with BT revealing this morning that its TV channels are in 5.2 million homes. Around 1.14 million of these aren't broadband customers but just want access to the sport.
Sport has helped the bottom line too. Full-year profits announced today beat forecasts, rising 14% to £2.64 billion ($4.02 billion). BT made big gains in broadband business, where BT Sport is a sweetener. Fibre broadband had its best ever quarter in the final three months of the year, with 455,000 new customers signing up.
But BT's free sport gamble is hurting Sky, which built its TV business on exclusive Premier League coverage. Sky was forced to massively hike the price it paid for Premier League games and is investing more in content to keep customers.
Sky doesn't disclose the total number of TV subscribers it has, only a quarterly figure of new customers gained. This has held up fairly well in the face of competition from BT and Liberum's media analyst Ian Whittaker estimates Sky has around 13 million TV subscribers in the UK.
But many analysts fear that an already announced subscription rise starting in June could dent numbers. The price rise is a direct response to the £4.2 billion it shelled out on Premier League games at the start of the year.
BT will start showing Champions League games later this year and customers will have to pay for these. Paterson also said he couldn't rule out making BT Sport a paid for service in the long run, even if more now it remains free.
Sky will be hoping BT starts charging sooner rather than later.