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September 27, 2016updated 03 Oct 2016 3:54pm

BT seeks YouView acquisition as it battles Sky in pay-TV market

YouView is a joint venture involving the BBC and TalkTalk.

By Alexander Sword

BT could acquire the rest of Freeview technology platform YouView in a deal worth tens of millions.

Original discussions of a bid hovered around the £20 million mark but bidding has now apparently reached around £60 million.

According to the report in the Daily Telegraph, BT is keen to gain full control in order to push ahead with its Pay-TV strategy.

13640490826000The stakeholders want different things out of a possible deal: the BBC is keen to protect public service features built into YouView, while TalkTalk wants a deal through which it can still provide YouView.

The BBC also wants to achieve a good price in the deal to avoid accusations of having subsidised BT.

YouView is a joint venture between BT and TalkTalk, the BBC, ITV, Channel 4, Channel 5 and Arqiva.

BT has made no secret of its ambitions in the Pay-TV market. It has criticised Sky’s dominance in the market and demanded a “level playing-field”, saying that the lines between pay-TV and broadband-led packages have blurred and that BT now has to deal with regulation that companies such as Sky do not.

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BT Sport Champions League

BT has won the rights to the Champions League for its sport offering.

 

The Ofcom Digital Communications Review, completed in February 2016, focused mainly on BT’s ownership of Openreach rather than examining the pay-TV market as BT had requested.

High-value content wins such as the rights to the Champions League have boosted BT Sport, the company’s rival to Sky Sports.

BT

BT is expanding into Pay-TV as its leadership in broadband is eroded.

BT will be seeking to blunt Sky’s edge in this market further as Sky and other communications companies encroach upon its traditional dominance in broadband and regulatory interventions take hold.

Sky is expected to launch its own mobile offering this year, meaning that Sky will be able to offer potentially lucrative ‘quad-play’ packages of broadband, fixed line, TV and mobile.

Through its acquisition of EE, completed this year, BT currently has the advantage here.

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