BT made a “big mistake” with YouView, experts warn

BT has made a “big mistake” in outsourcing technological innovation to YouView, industry has heard.

YouView, the internet TV service launched in 2012 under the chairmanship of Sir Alan Sugar, currently has a core team that controls the evolution of the software inside the set-top box, meaning BT and TalkTalk, who both share the platform, are left powerless to innovate for themselves.

Nigel Walley, managing director of media consultancy Decipher, said: “I think subcontracting innovation to a third party – particularly a third party with its own retail aspirations – is very challenging.

“The pace of change [in the pay TV market] is dramatically speeding up, which means you have to be in control of your total proposition,” he said during a session at Wednesday’s Media Playground.

YouView, which is a partnership between the BBC, ITV, Channel 4, Channel 5, BT, TalkTalk and Arqiva, is estimated to have cost over £100 million to develop and launch and was originally expected to be used as the future for public service broadcasting.

However, the BBC, Channel 4 and ITV announced earlier this year that they would be teaming together to establish a new service after an apparent “hijacking” of YouView by pay TV partners BT and TalkTalk – indicating a recommittal to Freeview.

Currently, BT TV and TalkTalk Plus TV customers have access to the YouView service, along with BT and TalkTalk’s own offerings. Both BT and TalkTalk each have a special YouView-branded set-top box but have no direct way to innovate the software inside for their own gain.

“I think it’s a big mistake,” said Paul Scanlan, co-founder and president of MobiTV. “Maybe not so much for TalkTalk, but certainly for BT who has the technological capability to do this themselves. YouView ends up almost a liability.”

One of the central problems, Scanlan said, is that BT is unable to fully compete with TalkTalk because if it wanted to innovate and push the boundaries of the platform’s software, TalkTalk has to have the same innovation.

If BT had chosen to run its own platform instead, it could protect its innovation and act much more aggressively, Scanlan added.

However, Jon Block, ITV’s controller of digital products, said BT has a much longer-term strategy in play as it looks to kick start a move into the triple-play – broadband, TV and telephone – market.

“BT needs to use YouView now as a leg-up into the market and become a viable competitor in triple-play in the mainstream,” he said.

“Then, when the next [TV market] hardware cycle comes around, they can control their innovation.”

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