The UK’s latest IPTV service launched on Wednesday, two years after it was originally scheduled to do so and possibly too late to make a significant impact.
YouView, which is backed by operators BT and TalkTalk, telco vendor Arqiva and broadcasters the BBC, ITV, Channel 4 and Channel 5, consists of a set top box that features 100 digital TV and radio channels, a seven day catch-up service and on demand programmes.
Consumers will be able purchase the box for £299 (€375) from retailers later this month.
Alternatively, BT and TalkTalk will be offering it as part of a phone and broadband package but have yet to announce pricing details.
Ovum’s Jonathan Doran told European Communications that he expected retail sales to struggle.
“They are aiming for the segment of the market that doesn’t want to commit to Pay-TV. These people are very cost conscious so it is difficult to see how many will be incentivised to upgrade,” he said.
Analysys Mason’s Cesar Bachelet was equally sceptical.
“It is unlikely to have much of an impact on traditional primary pay-TV subscriptions,” he said.
“The delay to launch means that YouView is no longer is the revolutionary service it was meant to be.
“Connected TVs and peripheral devices, such as Blu-ray players and games consoles, have now gained a solid foothold among consumers, and offer similar services.”
Consequently, Bachelet expects take-up to be driven by the two operators thanks to their subsidised device model.
While this could be good news for the operators – much will depend on the offers they settle on – they face challenges too.
BT in particular already has its own BT Vision IPTV service – a subscription service with over 700,000 customers – and will be worried about cannibalizing revenue.
TalkTalk has been phasing out its TV service in advance of the YouView launch.
Doran sees other drawbacks, such as no integrated Wi-Fi and a lack of exclusive content.
To be fair to YouView on this last point, it did announce a formal enrolment process for content partners and claimed it had received “expressions of interest” from over 300 such parties.
For their part, BT and TalkTalk have promised additional content and services to customers accessing YouView via their broadband networks.
YouView CEO Richard Halton added: “In many ways we’ve only just begun, YouView is set to evolve quickly and we look forward to working with new content partners and developing more functionality as boxes roll out into UK homes.”
Doran added the OTT providers were facing a similar dilemma.
“The drawback of OTT players’ offering is that is also an incomplete from a content perspective – they lack the baseline TV offering that YouView provides,” he said.
As we reported last week, Google announced it is launching its own TV service later this year.
Ultimately, though, Doran was not overwhelmed: “There is nothing revolutionary or unique about YouView.”
So have the operators backed a loser?
European Communications understands that the seven parties involved have spent around €90 million on getting YouView up and running.
Even if we assume that costs were evenly split between the seven – and there is no guarantee of this – it seems a small punt on behalf of the operators that is not going to cause any serious financial issues should it fail.
Indeed, when it comes to innovation – a topic we have covered in some depth this week – the criticism that operators are doing nothing is not true.
As TeliaSonera’s Kennet Rådne said: “You have to be prepared to fail”.
The criticism that does hold water, however, is that this has been too slow to arrive and it appears they have come to market with a product that is at best expensive but at worst a poor imitation of what is already available.