Sky Moves to All-Streaming Era

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Sky is further expanding its array of streaming options to better compete with Netflix and Amazon, the heart of which are plans to offer the full Sky service to consumers over IP direct to Sky Q boxes.

The pan-European pay TV giant first announced a plan to ditch the dish in 2016 with intention to launch last year. Instead, the service will launch in Italy later this year before being introduced to Austria, and finally the UK, the operator’s largest market, perhaps as late as 2019.

In a statement, Sky group chief executive Jeremy Darroch, said: “We recently launched Sky Q in Italy and will roll out the service to Germany and Austria in the next six months. We will also introduce Sky over fibre in Italy and our first all IP service in Austria, both without the need for a satellite dish.”

Sky called the move a “major development” that would reduce costs. In the long term this means saving billions of dollars on leasing bandwidth from satellite companies Eutelsat and SES.

The move is also targeting new markets including the reach of a further six million customers across Europe. Two million of those have been identified as living in dense urban areas where people can't put up dishes.

Sky principal streaming architect Jeff Webb will keynote next month's Streaming Forum in London, giving a behind-the-scenes look at the technology behind the operator's OTT efforts.

All of this is dependent on fast broadband, and to that end Sky’s latest figures for its broadband service in the UK and Ireland, to the end of December 2017 shows that fibre rollout has increased to 33% (up from 21% last year). It is estimated that it has connected just under half of its 12.9 million total retail customers.

Customers can currently use the Sky Go mobile and Now TV broadband service to watch a limited range of Sky channels without a dish, but the new offering will allow access to potentially all of its 270 channels, presumably including those in 4K, depending on broadband speeds.

Now Sky is to launch a low-cost (£14.99/ US $21) USB device that will provide access to its content including movies and live sport such as Premier League soccer plugged-in to a smart TV.

Additionally, through the device, it is catering for customers unable to access Now TV content via Wi-Fi when they are away from home with a new download service. A similar feature has proved popular with Amazon and Netflix customers.

This is timed to coincide with the European Union’s relaxing of geoblocking this summer to allow EU residents to access their paid subscriptions for online media while visiting other EU countries.

“If you are away at a conference or work you can plug and play TV from a hotel room,” said Gidon Katz, managing director, Now TV. “And by the summer holidays people will be able to take Now TV away with them and not worry about data charges for films.”

Customers can choose to buy day- or week-passes to watch Sky content without being locked in a monthly contract.

Sky’s ARPU in the UK and Ireland for the six months to end of December fell £1 to £46 a month, although it had stabilised the churn rate which decreased from 11.6% at the end of 2016 to 11.2%. Sky attributed this to more customers taking its premium Sky Q box.

All of this could be of more interest to US media watchers if the takeover of Fox by Disney proceeds. Rupert Murdoch controls 21st Century Fox which owns 39% of Sky.

With subscription-based streaming services become increasingly popular alternatives to traditional TV services, it is worth noting Sky rival Virgin Media’s announcement this week to upgrade all its TV and broadband customers to its next-gen set-top box V6.

The V6 offers 4K playback and comes with a 1TB hard disk. Virgin said its existing V6 customers are three times as likely to use Netflix and twice as likely to use BBC iPlayer as other Virgin box users.

In a statement, the company said it saw on-demand TV services as “partners not predators,” and that the increased power of the V6 compared to previous Virgin boxes was designed to better support such services.

Virgin Media parent Liberty Global has been amassing a series of content deals including global rights to motorsport Formula 1 and stakes in the studio Lionsgate and UK commercial broadcaster ITV, and has a long-term pact with Discovery to carry Eurosport. This week it also said it would invest more in original content, including episodic drama, for carriage on operators including Virgin Media.

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