BT Group is entering exclusive negotiations with Discovery to merge BT Sport with Eurosport UK in a 50:50 joint venture. In Discovery, the company has finally selected its favoured, surprise suitor after a lengthy period of uncertainty over the future status of BT Sport.
BT driving growth and consumer upsell
Content, including the headline BT Sport portfolio, has been a pillar of the company’s consumer multi-brand, multiplay strategy for some time. It remains key to helping to drive demand for higher-speed broadband access, tiered multiservice packages, and associated value-added services propelled by a premium TV and content platform and user experience incentive.
Consolidating for competitive advantage
The joint venture will bring together BT Sport and Eurosport UK assets. BT is snagging a heavyweight content power player in Discovery, one with extensive experience and expertise, and a well-established operational ecosystem. This consolidation promises positive ramifications for the development of BT Sport, whether for long-term growth or in a pre-divestment, value accretion scenario.
More broadly, the union could be leveraged for trickle-down benefits across BT Group digital content, and the operator’s content product-related customer experience management capability, as well as multiservice propositioning. If the joint venture gets the regulatory seal of approval, it will be a win for the company and, if not a UK market gamechanger, certainly a disruptive player substitution in terms of gameplay in the content segment.
Executing on the cost/benefit equation
Over the years, BT has had to invest heavily to nurture and mature its BT Sport venture, especially as it went head-to-head with UK content powerhouse Sky. Rights aren’t cheap or easy, and sports is a case in point. Like many other telcos, BT has had to balance the spiralling costs of content acquisition and distribution agreements against concrete ROI leverage, and the need for ongoing investment in other core areas like network buildouts and infrastructure enhancement.
Having a hold of premium and destination content is not enough to enable distinct differentiation or inducement for consumer churn from existing providers, whether other fixed, mobile and multiplay operators, or pureplay content owners, broadcasters and aggregators. This is true in most markets, but particularly so in one like the UK where co-opetition and the ongoing need for players to squeeze the most out of their content assets have resulted in extensive cross-platform germination between major contestants.
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