SBD Global/April 16, 2013/Media

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  • BT, BSkyB Ready To Engage In Price War To Win Over Pub Subscribers

    BT "will significantly undercut the pricing of Sky subscriptions for pubs" as the telecoms group attempts to snatch some of the £300M ($459M) market for its new sports channel launching this summer, according to Thomas, Robinson & Budden of the FINANCIAL TIMES. BT will use Sky's own platform to show its content, "which includes Premier League football and rugby, in pubs where annual subscriptions for the much fuller Sky sports package can easily run into five-figure sums." People with knowledge of recent negotiations said that "Sky has already offered some large pub groups heavy discounts" of up to 30%. The offers "mark the first time in two decades that the powerful sports rights holder has been willing to give substantial discounts." Analysts said that "pub and club subscriptions" account for between £200M ($306M) and £300M of BSkyB's annual revenues. The head of one pub chain said of Sky, "They have been fiercely arrogant up until now" (FT, 4/14). INSIDE WORLD FOOTBALL's Mark Baber wrote BT was only successful in winning the bidding for one EPL package, "so will be offering a significant discount on Sky pricing for their new sports channel, but bundling in rugby and other sports rights and even subsidising the cost of Sky boxes and satellites." Berenberg Media Analyst Sarah Simon said, "This is a very vulnerable profit stream because the revenues are so high-margin. Pubs will leap at some competition from BT because Sky increases the price so aggressively every year" (INSIDE WORLD FOOTBALL, 4/15).

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