BT inks Netflix access deal as TV bolsters bottom line
| 30 October 2014
BT's commitment to television is now reaping rewards for the corporation as whole according to its to its latest set of financial results.
4116Indeed for the quarter ended 30 September 2014 a 7% revenue increase in BT Consumer, primarily driven by growth in broadband and TV revenue, was offset by reductions elsewhere, mainly in BT Wholesale and Openreach. BT's key measure of the group's revenue trend, underlying revenue excluding transit, increased 0.2% in the second quarter.
Overall during the quarter BT added 38,000 TV customers and the corporation singled out BT Sport for its individual contribution to both top and bottom-line growth in the BT Consumer division. In Q2 2014, the sports channel delivered 45% increase in Premier League audiences on average. However this growth came with a commensurate rise in BT Sport programme rights charges which for Q2 were £83 million, compared with £50 million for the quarter a year earlier. For the half year, programme rights charges increased to £161 million, more than treble that for the previous year reflecting the launch of BT Sport in August last year.
As it aims to accelerate this proposition BT revealed that it has struck a deal with Netflix that will allow its customers to sign up for the leading SVOD service directly through BT. This will put the company on a par with UK cable provider Virgin Media which has been offering EPG-based access to Netflix for some time.
Commenting on the results BT chief executive Gavin Patterson said: "This was a solid quarter, with results slightly ahead of market expectations as we reduced costs and grew EBITDA. Our Consumer business continues to perform well thanks to the impact of BT Sport... Fibre is also driving growth with one in three of our retail broadband customers enjoying super-fast speeds. Our fibre footprint has increased to more than 21 million premises and will continue to grow. We continue to see strong demand across the market for the faster speeds that fibre offers."