CEO at Econsultancy
26 November 2000 19:00pm
You’d be hard pushed to miss Homechoice’s “TV Revolution” advertising at the moment. I heard that they were spending £15m in total?
It is increasingly crunch time for Homechoice with broadband internet, PS2, TiVo and Replay TV arriving on the scene in the UK the competition for subscribers after on demand through-the-TV entertainment (in its various guises) is fast hotting up. The winter evenings and the approach of Christmas also mean TV entertainment is increasingly uppermost in consumers’ minds.
I haven’t read of any subscriber uptake figures for Homechoice or what their targets are, but as one the very first Homechoice customers I thought it might be interesting to review how successful their proposition is from a customer’s perspective.
As with many of its ‘early adopters’ I actually bought into Homechoice for its high speed internet component. The TV Video on Demand (VOD) proposition is their core offering and where they hope to make their money. There is no mention of the internet in their current advertising – probably a good thing as it would risk confusing the message to the mass market.
Back in February (2000) I had finally had enough of the slow and unreliable internet connection I was getting from home through my 56k modem. I knew ADSL and cable modems were coming but I didn’t want to wait for them and so resigned myself to getting ISDN put in at home. I ordered BT’s Home Highway service despite feeling that is was way overpriced.
The next day I received a Homechoice leaflet through the post. As I live in North West London I was amongst the very first people to be offered the service. Here was VOD and ADSL based high speed internet for just £19.99 flat fee per month. Compared to the costs of ISDN or BT’s ADSL offering (£39.99 a month) this looked too good to be true. I immediately order the service. So sometimes direct mail does work….
The installation (about 3 weeks later) involved a visit from a BT engineer followed by a Homechoice engineer who also tested and introduced me to the service. The whole thing took about 2 hours and I was left with the choice of a free first time film to watch. Beware if you don’t like cables and boxes – Homechoice needs 3 black boxes to work: the set top box, BT’s ADSL modem and a Homechoice router / splitter.
So what’s the low down on speed and quality of service? Homechoice, along with all other ADSL service providers, uses BT’s infrastructure which only delivers 512kbps downstream and 256kbps upstream as standard. To get higher speeds the service provider has to upgrade the servers at the local BT exchanges at their own cost. Homechoice has had to do this to provide the VOD service to the TV. They have a total bandwidth of around 1.4mbps to play with. Broadcast purists would say that 1.4mbps is not enough to deliver ‘broadcast quality’ TV and it is true that the quality of the VOD you get through Homechoice is not brilliant. However, I think it is easily ‘good enough’ and certainly at least as good as the VHS quality you typically get from a rented video.
What is not entirely clear is that although the internet connectivity is indeed ADSL based it is limited to 115kbps. Why? Because the service is delivered into your PC through a COM port meaning there is a hardware limitation on data throughput. Homechoice are effectively ensuring that their core VOD service can deliver by capping the bandwidth that the internet service uses. That said, I get a reliable 12-14 kilobytes per second download speed which is a good 3 times faster than my modem (and much more reliable), faster than a single ISDN line and not far off dual ISDN (128 kbps). I haven’t yet experienced slow connection speeds due to high contention ratios with other local service users though I am wary that I have this to look forward to. All in all I can’t complain for £19.99 a month for unlimited use.
The service hasn’t always been available, which is always frustrating, and the process you need to go through to ‘reboot’ the various boxes when the system crashes is complicated. However, their customer service has always been very friendly and efficient. We’ll see if this goes to pot following the huge influx of customers they must be expecting following their recent advertising.
I haven’t used the full range of their VOD services yet (e.g. music videos, sports events) but I will say that we haven’t been back to the video shop since Homechoice arrived into our home. Blockbusters beware.
Longer term Homechoice’s survival will depend on the quality of the content that they can afford to buy the rights to. Presently they have a library of around 700 films that you can call up on demand, paying between £1.50 and £3.95 for 24hr access to the film. There is a danger that you fast run out of films that you actually want to watch, so just like a TV channel, Homechoice will have to make sure they continue to attract new subscribers and pull the crowds with big hitting content.
Overall, Homechoice has a good proposition with acceptable levels of quality, at a good price. The question is, with competition increasing, can they afford to keep advertising and buying in the content they’ll need? At the moment every customer that Homechoice takes on is adding to their losses, but they’re clearly banking on large future PPV revenue from their VOD services. Good luck to them.
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