There is a new wholesale service in development that will allow a suite of live TV channels in SD and HD quality to be carried over the BT Wholesale network and multicast to a retail providers customers with the appropriate router and TV set top box in their home. The BT Wholesale TV Connect product may be the game changer that means that BT Retail which spent hundreds of millions on sports rights will see a return on the spend.
The key to the service is that the channels would be multicast across the WBC IP based network reducing the amount of IP traffic used, and with multicast available across the GEA FTTC and FTTP products even the local loop should have no problems.
The TV Connect product is available on a wholesale basis to all WBC based providers, but with BT Retail being the only provider of significant size we presume it will be utilised by them. TV Connect takes in the appropriate SMPTE TV standard and outputs SD at around 3 Mbps and HD at 10 Mbps, which matches the quality of Freeview and satellite TV and also includes support for encrypted channels, meaning pay per view events are feasible.
Later in 2013 the TV Connect service will expand to support lines that are still using WBC ADSL2+ services, but with a more limited channel selection and the increased possibility that a line may not be fast enough to reliably stream a channel.
The battle to remain the UK's largest retail broadband provider is clearly underway, but a recent Guardian blog has suggested that with some 2.5 million BT customers also subscribing to Sky TV, Sky might be able to encourage them away to their LLU network and the magic number needed to push Sky into the number one position is another 2 million broadband subscribers (Market share of the largest broadband providers).
While in the past broadband competition has seen prices pushed into the basement sale area, if the battleground becomes content that is only reliably available over a super fast broadband connection we might actually see a rise in demand for super fast services.
Update 12:15: The pricing of the TV Connect service takes effect from 1st May 2013, and each channel carries a one-off £80,000 activation fee, and the cost per Mbps (Megabit per second) every month is £6,667. This means a 3 Mbps SD channel would cost £20,000 a month to broadcast over the network, rising to £67,000 for a HD channel. How this translates into a cost per subscriber really depends on how many subscribers a channel attracts.