BT’s television customers will soon be able to watch recent box office hits such as Django Unchained and Argo after the telecoms giant struck a deal to show Sky Movies.
BT, which is increasingly moving into home entertainment, said the agreement will mean customers can watch more than 700 films from major Hollywood studios by paying a monthly subscription.
The agreement is also seen as an easing in tensions between the firm and British Sky Broadcasting (BSkyB) which have been battling to attract football viewers since the summer.
It is the latest sign of BT’s intent in the “quad-play” market, where telecoms firms span TV and mobile as well as internet and home phone lines.
BT had complained to regulator Ofcom about Sky’s dominance in the pay-TV movie market and its tight grip on the exclusive first-run rights to major blockbusters.
However, the Competition Commission ruled last year that Sky’s dominance in the pay-TV market does not stifle competition.
BT said the deal – which was sealed after three years of commercial wrangling – will be a “tremendous boost” to its film offering. It launches on 26 October but BT has yet to reveal how much customers will pay to watch Sky Movies over its YouView and BT Vision+ boxes.
Eleven Sky Movies channels will be available to BT customers on a one-month contract, streamed live and also on-demand over the internet.
BT already has the rights to show new movies on a pay-per-view basis, and customers can also subscribe to a library of about 200 films, although these tend to be older family favourites.
However, the Sky tie-up means customers will be able to watch latest hits through a subscription service.
Unlike Sky customers, BT viewers will not be able to watch Sky Movies through mobile devices such as smartphones and tablets when on the move. BT did not reveal the value of the deal.
Rob Webster, director of Sky’s commercial group, said: “We are pleased to extend the distribution of Sky Movies to BT TV customers.
“Following the conclusion of commercial negotiations, BT’s customers can now enjoy access to the UK’s most popular subscription movies service. This agreement also supports our wholesale content business.”
BT recently threw down the gauntlet to Sky when it launched free live Premier League action for football fans – if they buy its broadband starting at £10 a month.
Ofcom is still deliberating on a complaint by BT about Sky’s alleged refusal to share its Sky Sports channels with it on “fair terms”.
BT wants to offer Sky Sports via YouView set-top boxes to complement its sport offer. But BT has said Sky will not allow the channels to be broadcast over BT boxes unless it offers its rival wholesale access to its BT Sport channels.
The regulator will update on its investigation by the end of the year. Shares in BT closed up 5.4p at 353.7p.