BSkyB will use its new Internet TV service to target a wider audience for its content, with the aim of attracting traditionally non-Sky homes to start watching at least some Pay TV programming and movies. The new service, scheduled to launch in the first half of 2012, will have its own subscription or pay per view options and will be independent of having a Sky satellite subscription. It will be available over any broadband connection.
BSkyB already provides the option to subscribe to its services online only, through its multi-screen Sky Go offer, but has never seriously marketed the fact because the positioning for Sky Go is really about adding value for existing customers. In contrast, the whole point of the new service is that you can start watching Pay TV content without the traditional package, removing the requirement for a satellite dish or set-top box.
Sky is the UK’s largest Pay TV operator with over 10 million satellite subscribers and a rapidly growing base of broadband and voice customers. The company also has rights to some of the most popular pay content and has been building the profile of its own channels like Sky 1, Sky Arts, Sky Living and Sky Atlantic (offering exclusive HBO content). It is also investing heavily in original production. It has negotiated multi-screen rights for much of what it shows, including movies and sports, and now it wants to make the best possible use of these rights by making the content available as widely as possible. Sky Movies will be available from launch and the new service will expand to offer sport and entertainment soon afterwards.
With broadband speeds increasing and the rapid penetration of connected devices, the company thinks this is a good time to target a wider audience using OTT (over-the-top) delivery. The Sky brand is strong in the UK and the company is confident that in many non-Sky homes consumers are aware of what it offers, like the look of Sky products but are just not ready for the commitment required for a full satellite package. So a key part of the strategy is that the new service will have a more flexible bundling and pricing structure. Though there are few details yet, Sky has announced that there will be no minimum contract and there will be a variety of pricing options. For example, people will be able to pay monthly for unlimited access to Sky Movies or rent a single movie on a pay-as-you-go basis.
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