TalkTalk – the forgotten man of the UK TV industry– has woken up. Even though it has operated a TV platform since its acquisition of Tiscali in 2007, it has been so quiet on the matter that some have questioned whether it has actually forgotten the service exists.

Of course, TalkTalk’s issue is not one of amnesia, but one of timing. It has now broken radio (or should that be TV?) silence and it appears to be in a generous mood. This morning it announced that it will offer YouView boxes for free to all Plus broadband customers that sign new contracts. It will also offer LoveFilm for 12 months, again, free of charge to Plus customers, and it has struck a wholesale deal with Sky for its branded channels.

By far the biggest deal is the free YouView box. For all the criticism the device has had, customers will take notice of a free £300 (US$467) device, no matter how inflated that price may be. The difference between the retail pricing – far higher than many expected – and the subsidized pricing – far cheaper than many expected – is significant. TalkTalk’s offer extinguishes any lingering doubts as to why the device has been priced so high at retail initially.

All of this puts TalkTalk back into the UK Pay-TV league, but, to borrow more football parlance, it is still nowhere near challenging for the Champions League. BT and Virgin also have Sky wholesale deals, and no third party, including TalkTalk, has access to the much coveted Sky Atlantic, fast becoming the jewel in Sky’s Pay-TV crown. LoveFilm is a nice addition, but the company’s streaming content is notoriously sketchy, and LoveFilm itself has done numerous cut-price affiliate deals and introduction offers with other parties.

Does TalkTalk care about any of this? Not at all. It knows that it faces an unwinnable battle in offering content on its own, so it is working with other providers to do so. It is a classic “telco TV lite” strategy, designed to protect its broadband customer base rather than grow a TV business in its own right, and TalkTalk has executed it very well. Many of its telco peers will be green with envy today. While they sunk millions of euros into IPTV rollouts from which they will never turn a profit, TalkTalk has a next-generation TV platform and offering that would be cheap at twice the price – especially as, lest we forget, it had to foot only a fraction of the bill for YouView.

There is one final irony amongst all of this. While today’s moves are inevitably being billed as “Sky vs. TalkTalk”, Sky is actually a huge beneficiary of TalkTalk’s strategy. More YouView boxes in the market can only be good for Sky. There will be nothing stopping TalkTalk customers from subscribing to or paying for Sky content via their shiny new subsidized-by-TalkTalk YouView boxes. And the kind of budget-conscious consumers that TalkTalk’s offers are typically aimed at are the exact kind of customer that Sky is targeting with Now.

TalkTalk has made out like bandits from YouView. But once again, we are brought back to the undeniable conclusion that Sky, despite all its posturing and spoiling tactics about YouView, stands to be one of the biggest beneficiaries of it.

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